Commonwealth Numbered Regulations

CORPORATIONS AMENDMENT REGULATIONS 2005 (NO. 5) (SLI NO 324 OF 2005) - SCHEDULE 2

(regulation 3)

[1]           Regulation 7.7.05

omit

90 days

insert

7 years

[2]           Regulation 7.7.08

omit

90 days

insert

7 years

[3]            Regulation 7.7.09

substitute

7.7.09      Situations in which statement of advice is not required: further advice

         (1)   For subsection 946B (3A) of the Act, a record of advice must set out:

                (a)    the following:

                          (i)    the advice given to the client by the providing entity;

                         (ii)    if information or a statement required by subsections 947D (2) and (3) is given — the information and statement; or

               (b)    the following:

                          (i)    brief particulars of the recommendations made and the basis on which the recommendations are made;

                         (ii)    if information under subsection 947D (2) is given — brief particulars of the information;

                         (iii)    if a statement under subsection 947D (3) is given — an acknowledgement that the statement has been given.

         (2)   The providing entity may keep the record in any form, for example, a tape recording.

         (3)   The providing entity must keep the record for 7 years after the day on which the further advice is provided.

[4]           After regulation 7.7.10AB

insert

7.7.10AC   Financial services guide

Financial services guide given by financial services licensee  — contents of guide

         (1)   For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if paragraph 942B (2) (g) were omitted and the following paragraph were substituted:

                    “(g)  if the providing entity provides further advice — a statement in relation to which the following requirements are satisfied:

                              (i)  the statement must indicate that the client may request a record of further advice that is provided to them, if they have not already been provided with a record of that advice;

                             (ii)  the statement must set out particulars of how the client may request such a record;

                            (iii)  any limitation in those particulars relating to the time within which the client may request such a record must be consistent with any applicable requirements in regulations made for the purposes of this subparagraph or, if there are no such applicable requirements, must be such as to allow the client a reasonable opportunity to request a record of the advice; and”.

Financial services guide given by financial services licensee — compliance with statement

         (2)   For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if subsection 942B (8) were omitted and the following subsection were substituted:

           “(8)  If:

                     (a)  the Financial Services Guide includes a statement to the effect that a client may request a record of further advice; and

                     (b)  the client is provided with further advice to which that statement applies; and

                     (c)  the client has not already been provided with a record of that advice;

the providing entity must comply with a request made in accordance with that statement for a record of that advice.

Note:          Failure to comply with this subsection is an offence (see subsection 1311(1)).”

7.7.10AD   Financial services guide

Financial services guide given by authorised representative — contents of guide

         (1)   For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if paragraph 942C (2) (h) were omitted and the following paragraph were substituted:

                    “(h)  if the providing entity, when acting as representative of the authorising licensee or any of the authorising licensees, provides further advice — a statement in relation to which the following requirements are satisfied:

                              (i)  the statement must indicate that the client may request a record of further advice that is provided to them, if they have not already been provided with a record of that advice;

                             (ii)  the statement must set out particulars of how the client may request such a record;

                            (iii)  any limitation in those particulars relating to the time within which the client may request such a record must be consistent with any applicable requirements in regulations made for the purposes of this subparagraph or, if there are no such applicable requirements, must be such as to allow the client a reasonable opportunity to request a record of the advice; and”.

Financial services guide given by authorised representative— compliance with statement

         (2)   For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if subsection 942C (8) were omitted and the following subsection were substituted:

           “(8)  If:

                     (a)  the Financial Services Guide includes a statement to the effect that a client may request a record of further advice; and

                     (b)  the client is provided with further advice to which that statement applies; and

                     (c)  the client has not already been provided with a record of that advice;

the providing entity must comply with a request made in accordance with that statement for a record of that advice.

Note:          Failure to comply with this subsection is an offence (see subsection 1311(1)).”

7.7.10AE   Situations in which Statement of Advice not required

                For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if section 946B of the Act were omitted and the following section were substituted:

“946B Situations in which a Statement of Advice is not required

First situation: further advice

             (1)  The providing entity does not have to give the client a Statement of Advice for particular advice (the further advice ) if subsection (2) or (2A) applies.

             (2)  This subsection applies if:

                     (a)  the providing entity has previously given the client a Statement of Advice that set out the client’s relevant personal circumstances in relation to the advice (the previous advice ) set out in that Statement; and

                     (b)  the client’s relevant personal circumstances in relation to the further advice (determined having regard to the client’s objectives, financial situation and needs as currently known to the providing entity) are not significantly different from the client’s relevant personal circumstances in relation to the previous advice; and

                     (c)  so far as the basis on which advice is given relates to other matters — the basis on which the further advice is given is not significantly different from the basis on which the previous advice was given.

Note:          Paragraphs 947B (2) (b) and 947C (2) (b) require a Statement of Advice to include information about the basis on which the advice is or was given, which may include the client's relevant personal circumstances, in which case paragraph (a) of this subsection would be satisfied.

          (2A)  This subsection applies if:

                     (a)  the client had a relationship with the providing entity before:

                              (i)  if the providing entity is a licensee — the day on which the providing entity obtained its Australian financial services Licence; or

                             (ii)  if the providing entity is an authorised representative — the day on which the licensee on whose behalf the advice is provided obtained its Australian financial services Licence; and

                     (b)  the providing entity gave the client advice (the earlier advice ) of a kind that if it were given after the day the Australian financial services Licence was obtained would be considered to be personal advice ; and

                     (c)  the client’s relevant personal circumstances in relation to the further advice are not significantly different from the client’s investment objectives, financial situation and particular needs that were determined for the earlier advice; and

                     (d)  so far as the basis on which advice is given relates to other matters — the basis on which the further advice is given is not significantly different from the basis on which the earlier advice was given.

             (3)  At the same time or as soon as practicable after the further advice is given to the client, the client must be given a statement that contains the information that would, if a Statement of Advice were to be given, be required to be in the Statement by paragraphs 947B (2) (d) and (e), or 947C (2) (e) and (f), as the case  requires, and by section 947D, if applicable.

          (3A)  The providing entity must keep a record of the further advice and, in doing so, must comply with any applicable requirements of regulations made for the purposes of this subsection.

Note 1:       Failure to comply with this subsection is an offence (see subsection 1311(1)).

Note 2:       For the client’s right to a record of the advice, see subsections 942B (8) and 942C (8).

Note 3:       Subsections 947D (2) and (3) require additional information to be included in the record in certain circumstances.

Second situation: certain basic deposit and other products

             (5)  The providing entity does not have to give the client a Statement of Advice if the advice relates to any or all of the following:

                     (a)  a basic deposit product;

                     (b)  a facility for making non-cash payments (see section 763D) that is related to a basic deposit product;

                     (c)  a financial product of a kind prescribed by regulations made for the purposes of this paragraph.

             (6)  However, if subsection (4) applies and the client is not given a Statement of Advice, the client must instead, when, or as soon as practicable after, the advice is provided, be given the information that would be required to be in the Statement of Advice by paragraphs 947B (2) (d) and (e), or 947C (2) (e) and (f), as the case requires.”

[5]           Savings

                Despite the modification to Part 7.7 of the Corporations Act 2001 made by regulation 7.7.10AE, on the commencement of this item, regulation 7.7.10 is taken to have been made for paragraph 946B (5) (c) of that Act, as substituted by the regulation.

[6]           After regulation 7.7.10AF

insert

7.7.10AG   Various consequential amendments to Division 7 of Part 7.7

         (1)   For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if the provisions set out in column 2 of the following table were modified as set out in columns 3 and 4:

         (2)   For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if the provisions set out in column 2 of the following table were modified as set out in column 3:

[7]           After regulation 7.7.10A

insert

7.7.10B   Insertion of definition — further advice

                For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if the following definition were inserted in section 761A:

“ further advice means advice to which subsection 946B (2) or (2A) applies.”

7.7.10C   Omission of definition — further market-related advice

                For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if the definition of “further market-related advice” were omitted from section 761A.

7.7.10D   Additional information in Statement of Advice

                For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if subsection 947D (2) of the Act were modified by omitting “Statement of Advice” and substituting “Statement of Advice or the record of advice under subsection 946B (3A), as the case requires,”.

7.7.10E   Additional information in Statement of Advice

                For paragraph 951C (1) (c) of the Act, Part 7.7 of the Act applies as if subsection 947D (3) of the Act were modified by omitting “Statement of Advice” and substituting “Statement of Advice or the record of advice under subsection 946B (3A), as the case requires”.

[8]           Division 51 of Part 10.2

omit