CORPORATIONS REGULATIONS 2001 - REG 7.1.40 Conduct that does not constitute the provision of a custodial or depository service

CORPORATIONS REGULATIONS 2001 - REG 7.1.40

  (1)   For paragraph   766E(3)(e) of the Act, conduct that is mentioned in subsection   766E(1) of the Act does not constitute providing a custodial or depository service if:

  (a)   the financial product held by the provider is a basic deposit product or is an account mentioned in subsection   981B(1) of the Act; or

  (b)   the client is an associate of the provider (within the meaning of Division   2 of Part   1.2 of the Act); or

  (c)   the provider and its associates have no more than 20 clients in aggregate for all custodial or depository services that they provide; or

  (d)   the financial product is held as part of the arrangements for securing obligations under:

  (i)   a credit facility; or

  (ii)   a debenture that is held as trustee under a trust deed:

  (A)   entered into under section   283AA of the Act or former section   260FA of the Corporations Law of a State or Territory; or

  (B)   mentioned in former section   1052 of the Corporations Law of a State or Territory; or

  (e)   the provider is a participant in a licensed market and the financial product held is a derivative acquired on the licensed market by the provider on behalf of a client; or

  (f)   the provider is a participant in a licensed clearing and settlement facility and the financial product held is a derivative registered on the licensed clearing and settlement facility by the provider on behalf of the client; or

  (g)   the financial product is held under:

  (i)   an order of a court; or

  (ii)   an order of a board or tribunal established under a law of a State or Territory; or

  (iii)   a direction by the holder of a statutory office established under a law of a State or Territory; or

  (h)   the service is provided by a lawyer in the following circumstances:

  (i)   the financial service consists of acquiring, holding or disposing of a cash management trust interest, being an interest to which a law of a State or Territory relating to the audit of trust or controlled monies applies;

  (ii)   the lawyer is acting:

  (A)   on instructions from the client, an associate of the client or a relative of the client; and

  (B)   in his or her professional capacity; and

  (C)   in the ordinary course of his or her activities as a lawyer;

  (iii)   the financial service can reasonably be regarded as a necessary part of those activities;

  (iv)   the lawyer has not received, and will not receive, a benefit in connection with the activities other than:

  (A)   the payment of professional charges related to those activities; and

  (B)   reimbursement for expenses incurred or payment on account of expenses to be incurred on behalf of the client, an associate of the client or a relative of the client;

    from the client or from another person on behalf of the client; or

  (i)   the financial product is held by a trustee appointed under:

  (i)   a law of a State or Territory to administer monies awarded to a person as compensation; or

  (ii)   a trust formed for a charitable purpose.

  (2)   For paragraph   766E(3)(e) of the Act, conduct that is mentioned in subsection   766E(1) of the Act does not constitute providing a custodial or depository service if the financial product is an Australian carbon credit unit that has been issued to:

  (a)   a special native title account in accordance with section   49 of the Carbon Credits (Carbon Farming Initiative) Act 2011 ; or

  (b)   a nominee account in accordance with section   141 of that Act.