Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Regulations 2019 (F2019L0526)

Schedule 1   Amendments

Corporations Regulations 2001

1   After Subdivision 4 of Division 4 of Part 7.7A

Insert:

Subdivision 4A - Ban on conflicted remuneration (rebates)

7.7A.15AJ What Subdivision is about

(1) This Subdivision is made for the purposes of subsection 963N(1) of the Act.

(2) This Subdivision provides for a scheme under which a person (the covered person ) covered by section 963M of the Act in relation to conflicted remuneration must pay amounts, or provide monetary benefits, based on that conflicted remuneration, to product holders mentioned in section 963N of the Act.

7.7A.15AK Obligations of covered person

(1) The covered person must pay amounts, or provide monetary benefits, to the product holders no later than 1 year after the day by which the covered person is legally obliged (disregarding Subdivision C of Division 4 of Part 7.7A of the Act) to give the conflicted remuneration to another person (see paragraph 963M(1)(a) of the Act).

(2) The amounts paid, or the amounts of the monetary benefit provided, to the product holders under subregulation (1) must be amounts that are just and equitable in the circumstances.

(3) For the purposes of subregulation (2), in determining whether an amount is just and equitable in the circumstances, take account of the following matters:

(a) the amount of the conflicted remuneration;

(b) the amount invested by each product holder in the financial products mentioned in subsection 963N(2) of the Act;

(c) the structure of the fees (if any) that the product holders have paid in respect of those financial products;

(d) the extent to which the sum of the amounts to be paid, and the amount of the monetary benefits to be provided, to the product holders under subregulation (2) equals the amount of, or the present value of, the conflicted remuneration;

(e) any other relevant matter.

(4) However, for the purposes of subregulation (2), in determining whether an amount is just and equitable in the circumstances, do not take account of the costs of the covered person in paying the amounts or providing the monetary benefits.