Commonwealth Consolidated Regulations Commonwealth Consolidated Regulations(1) For subsection 1019B(8) of the Act, the amount to be repaid on an exercise of the right to return a financial product is to be varied in accordance with this regulation.
Investment - linked product
(2) If:
(a) the financial product is:
(i) an investment - linked product within the meaning of the Insurance Contracts Act 1984 ; or
(ii) a managed investment product; or
(iia) a foreign passport fund product; or
(iib) a security in a CCIV; or
(iii) a superannuation product (subject to the governing rules of the issuer of the superannuation product relevant to the redemption of superannuation interests); and
(b) on the day on which the responsible person receives notification from the product holder exercising the holder's right to return, the amount that would have been the price at which the product was acquired (the allocation price ) if the product had been acquired on that day is less than the allocation price on the day on which the product was acquired;
the amount that would otherwise be repaid may be reduced by the adjustment amount.
(3) If:
(a) the financial product is:
(i) an investment - linked product within the meaning given by the Insurance Contracts Act 1984 ; or
(ii) a managed investment product; or
(iia) a foreign passport fund product; or
(iib) a security in a CCIV; or
(iii) a superannuation product; and
(b) on the day on which the responsible person receives notification from the product holder exercising the holder's right to return, the amount that would have been the price at which the product was acquired (the allocation price ) if the product had been acquired on that day is greater than the allocation price on the day on which the product was acquired;
the amount that would otherwise be repaid is increased by the adjustment amount.
(4) For subregulations (2) and (3), the adjustment amount is the difference between:
(a) the price at which the product was acquired; and
(b) the price at which the product could be acquired on the day on which the responsible person receives notification from the product holder exercising the holder's right to return.
(5) If the price referred to in paragraph (4)(b) is not determined under the relevant contract or legal relationship on the day on which the responsible person receives notification from the product holder exercising the holder's right to return, the amount to be repaid and the adjustment amount is to be determined:
(a) on the basis of the most recent day on which a price was calculated under the contract or legal relationship; or
(b) if there is no day of that kind, as soon as practicable after the product issuer receives the notification.
Tax
(6) If:
(a) tax or duty of any kind has been paid, or is payable, by the responsible person because of the issue of the financial product; and
(b) either:
(i) if the tax or duty has been paid, the responsible person is unable to obtain a refund of the tax or duty; or
(ii) if the tax or duty has not been paid, the tax or duty does not cease to be payable as a result of the exercise of the right to return the financial product;
the amount that would otherwise be repaid is reduced by the amount of the tax or duty.
Certain financial products
(7) The amount that would otherwise be repaid in relation to the return of a financial product (other than an RSA) may be reduced to account for reasonable administrative and transaction costs (other than the payment of commissions or similar benefits) incurred by the responsible person that:
(a) are reasonably related to the acquisition of the financial product and the subsequent termination of the contract or legal relationship; and
(b) do not exceed the true cost of an arms' length transaction.
Financial product issued for specific period
(8) If:
(a) the financial product is:
(i) a risk insurance product; or
(ii) that part of a financial product that is a risk insurance product; and
(b) either:
(i) the financial product has been issued for a specific period; or
(ii) the premium for the financial product has been paid in relation to cover for a specific period; and
(c) a proportion of that period has already passed when the right to return the risk insurance product is exercised;
the amount that would otherwise be repaid may be reduced by a proportion equal to the proportion of the period that has passed.
General
(9) If the financial product is subject to a distribution to which subregulation 7.9.70(2) applies, the amount that would otherwise be repaid may be reduced by the amount of that distribution.