Corporations Regulations 2001

SCHEDULE 8C - MODIFICATIONS OF PART 7.5 OF THE ACT - COMPENSATION REGIMES

(regulation 7.5.01A)

6 After subsection 885D(2)
Insert:

(2A)
Despite subsection (2), if, in relation to a loss suffered by a person:

(a) the requirements of subsection 885C(1) are satisfied in relation to a participant and a financial market, except that it is not reasonably apparent whether the compensation regime constituted by Division 3 or by Division 4 covered the transaction, or proposed transaction; and

(b) the relevant financial market has both Division 3 and Division 4 arrangements; and

(c) either:

(i) the person did not (expressly or impliedly) instruct the participant to use the money or other property to enter into a transaction that would be covered by the compensation regime constituted by Division 3 or by Division 4; or

(ii) if the participant had authority to enter into transactions on the person ' s behalf without specific authority, there is no evidence that the participant decided to use the money or other property to enter into a transaction that would be covered by the compensation regime constituted by Division 3 or by Division 4; and

(d) the participant was permitted to trade in products that would be covered by the compensation regimes constituted by Division 3 and by Division 4; and

(e) it is not reasonably apparent from the usual business practice of the participant which of those transactions the participant proposed to undertake;
the loss is taken to be a Division 3 loss and not to be a loss that is connected with a financial market to which Division 4 applies.

(2B)
Despite subsection (2), if:

(a) the requirements of subsection 885C(1) are satisfied in relation to a participant and a financial market; and

(b) the loss is also connected (see section 888A) with a financial market to which Division 4 applies; and

(c) the person did not (expressly or impliedly) instruct the participant to use a particular one of those markets; and

(d) it is not reasonably apparent from the usual business practice of the participant which of those markets the participant would use when acting for the person; and

(e) the loss is connected with a transaction effected through a financial market to which Division 3 applies; and

(f) a claim cannot be made, or has been disallowed, under Division 4 (see subsection 888A(1));
the loss is taken to be a Division 3 loss and not to be a loss that is connected with a financial market to which Division 4 applies.

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