Financial Services Legislation Amendment (Wholesale Margining) Regulation 2016 (F2016L01657)

Schedule 1   Corporations Regulations 2001

Corporations Regulations 2001

1   Before regulation 7.8.01

Insert:

7.8.01A Wholesale client money

For the purposes of paragraph 981A(4)(a) of the Act, money paid as mentioned in subsection 981A(1) of the Act is exempt from Subdivision A of Division 2 of Part 7.8 of the Act at a time if:

(a) at that time the licensee has the client's written agreement to the money being dealt with other than in accordance with that Subdivision; and

Note 1: It is not necessary for the agreement to mention that Subdivision explicitly.

Note 2: If the licensee obtains the agreement after the money is paid, that Subdivision ceases to apply to the money when the licensee obtains the agreement.

(b) either:

(i) the financial service referred to in subparagraph 981A(1)(a)(i) of the Act is or relates to a dealing in a derivative; or

(ii) the financial product referred to in subparagraph 981A(1)(a)(ii) of the Act is a derivative; and

(c) the entry into of the derivative was not or will not be cleared through a clearing and settlement facility; and

(d) the financial service or product would have been provided to the client as a wholesale client if:

(i) the service or product were provided to the client when the money was paid; and

(ii) section 761GA of the Act (about sophisticated investors) did not apply.