12BABMeaning of financial service

12BAB Meaning of financial service

When does a person provide a financial service? (1) For the purposes of this Division, subject to paragraph (2)(b), a person provides a financial service if they: (a) provide financial product advice (see subsection (5)); or (b) deal in a financial product (see subsection (7)); or (c) make a market for a financial product (see subsection (11)); or (d) operate a registered scheme; or (e) provide a custodial or depository service (see subsection (12)); or (ea) provide a superannuation trustee service; or (eb) provide a claims handling and settling service; or (f) operate a financial market (see subsection (15)) or clearing and settlement facility (see subsection (17)); or (g) provide a service (not being the operation of a derivative trade repository) that is otherwise supplied in relation to a financial product (other than an Australian carbon credit unit or an eligible international emissions unit); or (ga) operate the business and conduct the affairs of a CCIV, and the person is the corporate director of the CCIV; or (h) engage in conduct of a kind prescribed in regulations made for the purposes of this paragraph.

Note: Paragraph (ga) means persons other than the corporate director will not be treated as providing that financial service if they operate the business and conduct the affairs of the CCIV while:

(a) acting as an agent of the CCIV, or as an agent or employee of the corporate director; or
(b) taking steps to wind up a sub‑fund of the CCIV.

(1AA) Without limiting subsection (1), for the purposes of this Division, a financial product is a financial service. (1A) Subject to paragraph (2)(b), the provision by a trustee company of a traditional trustee company service constitutes the provision, by the company, of a financial service for the purposes of this Division.

Note: Trustee companies may also provide other kinds of financial service mentioned in subsection (1).

(1B) The regulations may, in relation to a traditional trustee company service of a particular class, prescribe the person or persons to whom a service of that class is taken to be provided or supplied for the purposes of this Division. This subsection does not limit (and is not limited by) subsection (2). Meaning of provides a crowd‑funding service (1C) Subject to paragraph (2)(b), the provision by a person of a crowd‑funding service constitutes the provision, by the person, of a financial service for the purposes of this Division. (1D) For the purposes of this Division, the persons to whom, and time when, a crowd‑funding service is provided are as specified in subsections 766F(3) and (4) of the Corporations Act 2001. (2) The regulations may set out: (a) the circumstances in which persons facilitating the provision of a financial service (for example, by publishing information) are taken also to provide that service; or (b) the circumstances in which persons are taken to provide, or are taken not to provide, a financial service. (4) For the purposes of this section, a person is not operating a registered scheme merely because: (a) they are acting as an agent or employee of another person; or (b) they are taking steps to wind up the scheme. Meaning of financial product advice (5) For the purposes of this section, financial product advice means a recommendation or a statement of opinion, or a report of either of those things, that: (a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or (b) could reasonably be regarded as being intended to have such an influence; but does not include anything in: (c) a document prepared in accordance with requirements of Chapter 7 of the Corporations Act, other than a document of a kind prescribed by regulations made for the purposes of this paragraph; or (d) any other document of a kind prescribed by regulations made for the purposes of this paragraph. (6) Advice given by a lawyer in his or her professional capacity about matters of law, legal interpretation or the application of the law to any facts is not financial product advice. Meaning of dealing (7) For the purposes of this section, the following conduct constitutes dealing in a financial product: (a) applying for or acquiring a financial product; (b) issuing a financial product; (c) in relation to securities or interests in managed investment schemes—underwriting the securities or interests; (d) varying a financial product; (e) disposing of a financial product.