Footnotes

Chapter 2 - Review of regulation 7.1.29

[1]        Regulation 7.1.29 was contained in Corporations Amendment Regulations 2001 (No. 4), Statutory Rules 2001 No. 319. References to ‘qualified accountant’ were replaced by ‘recognised accountant’ in Corporations Amendment Regulations 2002 (No. 3), Statutory Rules 2002 No. 41 to provide ASIC with the flexibility to make determinations regarding a person’s status as a ‘recognised accountant’ for the purposes of the regulation.

[2]        See subsection 766A(1) which sets out when a person provides a financial service. Section 911A says that a person who carries on a financial services business must hold an Australian financial services licence. See also section 911D. These provisions were introduced into the Act by the FSR Act.

[3]        Report on the regulations and ASIC policy statements made under the Financial Services Reform Act 2001, tabled on 23 October 2002. See Chapter 5, pp. 29‑37.

[4]        Report on the regulations and ASIC policy statements made under the Financial Services Reform Act 2001, tabled on 23 October 2002. See Chapter 5, p. 36.

[5]        Report on the regulations and ASIC policy statements made under the Financial Services Reform Act 2001, tabled on 23 October 2002, p. 82.

[6]        Explanatory Statement, Corporations Amendment Regulations 2003 (No. 3), p. 1.

[7]        Explanatory Statement, Corporations Amendment Regulations 2003 (No. 3), p. 1.

[8]        Subregulation 7.1.29(2) defines ‘eligible service’ as conduct mentioned in paragraphs 766A(1)(a) to (f) of the Act.

[9]        Paragraph 7.1.29(3)(a).

[10]      Paragraph 7.1.29(3)(b).

[11]      Paragraph 7.1.29(3)(c). The Explanatory Statement for this provision says: ‘This activity concerns advice to an incorporated entity or unincorporated entity on administrative and operational issues. The most common use of this provision is likely to be a person advising the management of a company. The advice must only be in relation to the actual entity carrying on the business or related entities such as subsidiaries’.

[12]      Paragraph 7.1.29(3)(d)(i)

[13]      Paragraph 7.1.29(3)(d)(ii).

[14]      Paragraph 7.1.29(3)(e). The Explanatory Statement for this provision says that licensing is not needed here ‘because there is largely limited or no change in beneficial ownership of the financial products involved, such as insurance’.

[15]      The Explanatory Statement for this provision says:  ‘This allows a person to undertake tasks such as rolling over funds into a SMSF, such as where the decision to roll over the funds has already been made. However, this arranging exemption will only apply to a SMSF given the need to assist member‑trustees operate their own funds. Arranging can only be provided to persons mentioned in paragraph (5)(b) and must not be inconsistent with the limitation in paragraph (5)(c)’.

[16]      Paragraph 7.1.29(3)(g). The Explanatory Statement says for this provision that:  ‘The provision of ‘arranging’ activities needs to be distinguished from the ‘financial product advice’ that recommends the registration or transfer of a financial product. That advice must fall within an exemption (either under this regulation or elsewhere under the Act) or require licensing’.

[17]      Paragraph 7.1.29(3)(h).

[18]      The term used in the legislation is ‘financial product advice’ which is defined in subsection 766B as being a recommendation or a statement of opinion that is intended to influence or could reasonably regarded as intended to influence a person in making a decision about a financial product.

[19]      Explanatory Statement, Corporations Amendment Regulations 2003 (No. 3), p. 4.

[20]      This is the Superannuation Industry (Supervision) Act 1993 (except for paragraph 52(2)(f)), the Superannuation Industry (Supervision) Regulations 1994 (except for regulation 4.09) or the Superannuation Guarantee (Administration) Act 1992.

[21]      These exceptions relate to the trustee’s covenants to formulate and give effect to a fund’s investment strategy taking into account specified circumstances.

[22]      Explanatory Statement, Corporations Amendment Regulations 2003 (No. 3), p. 5.

Chapter 3 - Review of the evidence and the Committee's conclusions

[1]        See submissions 1, 2, 3, 5, 6, 7, 9 and 11.

[2]        Submission 10.

[3]        Submission 3.

[4]        Committee Hansard, 16 June 2003, p. CFS 11. With the situation outlined by Ms Orchard, the Committee wonders whether an accountant who decides in the client’s best interests to refer that client to a licensee for advice on the merits of setting up such a fund (and presumably having to explain to the client why the referral was thought necessary), might be regarded as exceeding the scope of the exemption.

[5]        Committee Hansard, 16 June 2003, p. CFS 29.

[6]        Committee Hansard, 16 June 2003, p. CFS 26.

[7]        Committee Hansard, 16 June 2003, pp. CFS 15‑16.

[8]        Submission 5, p. 2.

[9]        Committee Hansard, 16 June 2003, p. CFS 16.

[10]      Committee Hansard, 16 June 2003, pp. CFS 23‑4.

[11]      Explanatory Statement, Corporations Amendment Regulations 2003 (No. 3), p. 4.

[12]      Committee Hansard, 16 June 2003, p. CFS 9.

[13]      Submission 6, p. 2.

[14]      Committee Hansard, 16 June 2003, p. CFS 7.

[15]      Committee Hansard, 16 June 2003, p. CFS 24.

[16]      Committee Hansard, 16 June 2003, pp. CFS 24‑5.

[17]      Committee Hansard, 16 June 2003, p. CFS 26.

[18]      Submission 3, p. 1.

[19]      Committee Hansard, 16 June 2003, p. CFS 21.

[20]      Committee Hansard, 16 June 2003, p. CFS 10.

[21]      Committee Hansard, 16 June 2003, p. CFS 5.

[22]      Committee Hansard, 16 June 2003, p. CFS 9.

[23]      Committee Hansard, 16 June 2003, p. CFS 6.

[24]      Ms Bowler and Mr Reilly, Committee Hansard, 16 June 2003, pp. CFS 19‑20.

[25]      Committee Hansard, 16 June 2003, p. CFS 21. Refer also to Ms Bowler’s testimony at the Committee’s inquiry into the regulations and ASIC policy statements made under the FSR Act, Committee Hansard, 11 July 2002, pp. 175‑9.

[26]      Committee Hansard, 16 June 2003, p. CFS 21.

[27]      Committee Hansard, 16 June 2003, p. CFS 5.

[28]      Committee Hansard, 16 June 2003, pp. CFS 21‑2.

[29]      Committee Hansard, 16 June 2003, p. CFS 19.

[30]      Committee Hansard, 16 June 2003, p. CFS 24.

[31]      See the Committee’s Report on the Regulations and ASIC Policy Statements made under the Financial Services Reform Act 2001, tabled on 23 October 2002, pp. 34‑5.

[32]      Committee Hansard, 16 June 2003, pp. CFS 46‑7.

[33]      Committee Hansard, 16 June 2003, p. CFS 47.

[34]      Committee Hansard, 16 June 2003, p. CFS 47.

[35]      Committee Hansard, 16 June 2003, p. CFS 51.

[36]      Committee Hansard, 16 June 2003, p. CFS 51.

[37]      Committee Hansard, 16 June 2003, p. CFS 52.

[38]      The Committee notes in this regard that the original regulation was first gazetted on 15 October 2001.

[39]      Mr Mike Rosser, Committee Hansard, 16 June 2003, p. CFS 45.

[40]      Financial Services Reform Bill 2001, Explanatory Memorandum, Parliament of the Commonwealth of Australia, House of Representatives, p. 12.

[41]      Financial Services Reform Bill 2001, Explanatory Memorandum, Parliament of the Commonwealth of Australia, House of Representatives, p. 12.

[42]      Letter from the Department of the Treasury to the Committee, 19 June 2003, p. 2.

[43]      Committee Hansard, 16 June 2003, p. CFS 19.

[44]      Committee Hansard, 16 June 2003, p. CFS 21.

[45]      Policy Statement 146: Licensing: Training of financial product advisers.

[46]      See the Committee’s Report on the regulations and ASIC policy statements made under the Financial Services Reform Act 2001, tabled on 23 October 2002, pp. 35‑6.

[47]      Letter from the Department of the Treasury to the Committee, 19 June 2003, p. 2.

[48]      Committee Hansard, 16 June 2003, p. CFS 20.

[49]      Committee Hansard, 16 June 2003, p. CFS 46.

[50]      Committee Hansard, 16 June 2003, p. CFS 52.

[51]      Submission 10.

[52]      Financial System Inquiry Final Report, March 1997, pp. 275‑6.

[53]      Submissions 9 and 11.

[54]      Paragraphs 766B(5)(a) and (b).

[55]      Submission 11, p. 4.

[56]      Submission 11, p. 5.

[57]      Committee Hansard, 16 June 2003, p. CFS 33.

[58]      Submission 9, p. 3.

[59]      Committee Hansard, 16 June 2003. These are all referred to on p. CFS 33.

[60]      Submission 11, p. 7.

[61]      Submission 11, pp. 6‑7.

[62]      Committee Hansard, 16 June 2003, p. CFS 37.

Chapter 4 - The Corporations Amendment Regulations 2003 (No. 3), Statutory Rules 2003 No. 85

[1]        Section 761A.

[2]        Committee Hansard, 16 June 2003, p. CFS 39.

[3]        Committee Hansard, 16 June 2003, p. CFS 40.

[4]        Committee Hansard, 16 June 2003, p. CFS 40.

Report by Labor Members

[1]           The type of fund structures which a client may choose from include: retail funds, industry funds, corporate funds, small APRA funds, public sector funds and self-managed superannuation funds (SMSF’s).

[2]           Committee Hansard, 16 June 2003, p. 14.

[3]           Explanatory Statement, Corporations Amendment Regulations 2003 (No. 3) Statutory Rule No. 85, p. 5.

[4]           In paragraphs 3.55 and 3.76 of the Report

[5]           Committee Hansard, 16 June 2003, p. 16

[6]           Committee Hansard, 16 June 2003, p. 20