Corporations Amendment Regulations 2010 (No. 5)

7.9.11F Retention of copies of Product Disclosure Statement for margin loan

(1) The responsible person for a Product Disclosure Statement for a margin loan must retain a copy of each version of the Statement that the responsible person issues for a period of 7 years starting on the day on which the version is prepared.

(2) The responsible person for the Product Disclosure Statement must retain a copy of the document from which a matter is applied, adopted or incorporated by the Statement as mentioned in paragraph 7.9.11E (3) (c) for a period of 7 years commencing on the day on which the Statement is prepared.

(3) If a document from which a matter is adopted, applied or incorporated by the Product Disclosure Statement as mentioned in paragraph 7.9.11E (3) (c) is changed in a way that changes the description of, or reference to, the matter, the responsible person for the Statement must retain a copy of the document for a period of 7 years commencing on the day on which the document is changed.

7.9.11G Requirement to provide copy of Product Disclosure Statement for margin loan free of charge

(1) For paragraph 1015C (5) (a) of the Act, this regulation specifies requirements as to the manner in which a Product Disclosure Statement for a margin loan must be given to a person if the person requests a copy of the Statement.

(2) The responsible person for the Product Disclosure Statement must give the person, free of charge:

(a) a copy of the Statement within 8 business days; and

(b) a copy of a matter in writing that is applied, adopted or incorporated by the Statement within 8 business days.

7.9.11H Notification about change to Approved Securities List or current interest rate for margin loan

(1) For paragraph 1017B (1A) (b) of the Act, a change to the Approved Securities List or current interest rate for a margin loan is specified.

(2) For paragraph 1017B (3) (c) of the Act, the issuer of the margin loan must notify the holder of the change by:

(a) sending notice of the change to the holder:

(i) by pre‑paid post to a postal address nominated by the holder; or

(ii) to an email address nominated by the holder; or

(b) placing a notice on a webpage that is likely to come to the holder’s attention if the holder is monitoring the holder’s margin loan.

Subdivision 4.2B Content of Product Disclosure Statement for superannuation product

7.9.11K Application of Subdivision 4.2B

(1) This Subdivision applies to:

(a) a superannuation trustee that is required to prepare a Product Disclosure Statement for a superannuation product; and

(b) a Product Disclosure Statement for a superannuation product.

(2) However, this Subdivision does not apply to the following financial products:

(a) a superannuation product that is solely an interest in a defined benefits fund;

(b) a superannuation product that is solely a pension product.

7.9.11L Provisions of Part 7.7 of Act that do not apply in relation to superannuation product

For paragraph 951C (1) (b) of the Act, section 942DA of the Act does not apply in relation to a superannuation product.

7.9.11M Provisions of Part 7.9 of Act that do not apply in relation to superannuation product

For paragraph 1020G (1) (b) of the Act, Subdivision D of Division 2 of Part 7.9 of the Act does not apply in relation to a superannuation product.

7.9.11N Modification of Act — superannuation product

For paragraph 1020G (1) (c) of the Act, Part 7.9 of the Act is modified in its application to a superannuation product to which this Subdivision applies as set out in Part 5B of Schedule 10A.

7.9.11O Form and content of Product Disclosure Statement for superannuation product

(1) For modified paragraph 1013C (1) (a) of the Act, a Product Disclosure Statement for a superannuation product to which this Subdivision applies must include the information and statements mentioned in Schedule 10D.

(2) For modified paragraph 1013C (1) (b) of the Act, a Product Disclosure Statement for a superannuation product to which this Subdivision applies must be in the form mentioned in Schedule 10D.

7.9.11P Requirements for references to incorporated information for superannuation product

(1) For subsection 1013C (1B) of the Act, as modified by Part 5B of Schedule 10A, this regulation prescribes requirements for applying, adopting or incorporating, in a Product Disclosure Statement for a superannuation product to which this Subdivision applies, a matter contained in writing.

(2) A Product Disclosure Statement may apply, adopt or incorporate a matter only if a provision of these Regulations requires or permits the matter to be applied, adopted or incorporated by the Statement.

(3) If a Product Disclosure Statement applies, adopts or incorporates a matter:

(a) the matter must be:

(i) in writing; and

(ii) clearly distinguishable from any other matters that are not to be applied, adopted or incorporated; and

(iii) if the superannuation product is not issued to a standard employer‑sponsored member within the meaning of the Superannuation Industry (Supervision) Act 1993 — publicly available in a document other than the Statement; and

(b) the responsible person for the Statement must identify the matter by:

(i) including in the Statement a concise description of the matter; and

(ii) ensuring that the reference to the matter is clearly distinguishable from the other contents of the Statement; and

(c) the responsible person for the Statement must:

(i) identify each version of the matter (by including the date on which the version was prepared) so that a person who, at a particular time, is considering a superannuation product can identify the version that is relevant to the superannuation product at that time; and

(ii) state the date on which a version was prepared in a prominent position at or near the front of the version; and

(d) the responsible person for the Statement must ensure that a person who is relying on the Statement is able to have access to:

(i) the document containing the matter; or

(ii) if there is more than 1 version of the document containing the matter — each version;

reasonably easily and reasonably quickly.

(4) The responsible person for the Product Disclosure Statement must also ensure that the Statement includes the statements in the following table relating to the matter, and sets them out in each place at which the matter has been applied, adopted or incorporated.

(5) The responsible person for the Product Disclosure Statement must also ensure that each document mentioned in subregulation (3) includes the statement in the following table relating to the matter.

(6) For the avoidance of doubt, the giving of a Product Disclosure Statement to which this Subdivision applies is taken to be the giving of every matter that is applied, adopted or incorporated in accordance with subregulations (1) to (5).

(7) If the Product Disclosure Statement applies, adopts or incorporates a matter, the information dealing with the matter is taken to have been given to a person on the day on which the person signs the application form accompanying the Statement.

7.9.11Q Retention of copies of Product Disclosure Statement for superannuation product

(1) This regulation applies if:

(a) section 1015B of the Act does not apply to require a Product Disclosure Statement to be lodged with ASIC; and

(b) the Statement is for a superannuation product to which this Subdivision applies.

(2) The responsible person for the Product Disclosure Statement must retain a copy of each version of the Statement that the responsible person issues for a period of 7 years starting on the day on which the version is prepared.

(3) The responsible person for the Product Disclosure Statement must retain a copy of the document from which a matter is applied, adopted or incorporated by the Statement as mentioned in paragraph 7.9.11P (3) (c) for a period of 7 years commencing on the day on which the Statement is prepared.

(4) If a document from which a matter is adopted, applied or incorporated by the Product Disclosure Statement as mentioned in paragraph 7.9.11P (3) (c) is changed in a way that changes the description of, or reference to, the matter, the responsible person for the Statement must retain a copy of the document for a period of 7 years commencing on the day on which the document is changed.

7.9.11R Requirement to provide copy of Product Disclosure Statement for superannuation product free of charge

(1) For paragraph 1015C (5) (a) of the Act, this regulation specifies requirements as to the manner in which a Product Disclosure Statement for a superannuation product to which this Subdivision applies must be given to a person if the person requests a copy of the Statement.

(2) The responsible person for the Product Disclosure Statement must give the person, free of charge:

(a) a copy of the Statement within 8 business days; and

(b) a copy of a matter in writing that is applied, adopted or incorporated by the Statement within 8 business days.

Subdivision 4.2C Content of Product Disclosure Statement for simple managed investment scheme

7.9.11S Application of Subdivision 4.2C

(1) This Subdivision applies to:

(a) a person that is required to prepare a Product Disclosure Statement for a simple managed investment scheme; and

(b) a Product Disclosure Statement for a simple managed investment scheme.

(2) This Subdivision does not apply to the extent that the simple managed investment scheme relates to a financial product (known as a “quoted product”) which is, or is intended to be, traded on a prescribed financial market.

(3) This Subdivision does not apply to the extent that the simple managed investment scheme relates to a financial product (known as a “stapled security”) to which the following requirements apply:

(a) the product consists of interests in 2 or more financial products;

(b) the interests include at least 1 interest in a registered managed investment scheme;

(c) under the terms on which each of the interests is to be traded, the interests must be transferred together;

(d) there are no financial products in the same class as the interests which may be transferred separately.

(4) This Subdivision does not apply to the extent that the simple managed investment scheme is a managed investment scheme that has a constitution that provides that:

(a) a member may direct that an amount of money corresponding to part or all of the amount invested by the member in the scheme be invested in accessible investments; and

(b) the distributions of capital and income from the scheme to the member in relation to the member’s interests in the scheme will be determined by reference to amounts received by the responsible entity or a custodian in relation to the accessible investments acquired in accordance with the direction.

7.9.11T Provisions of Part 7.7 of Act that do not apply in relation to simple managed investment scheme

For paragraph 951C (1) (b) of the Act, section 942DA of the Act does not apply in relation to a simple managed investment scheme to which this Subdivision applies.

7.9.11U Provisions of Part 7.9 of Act that do not apply in relation to simple managed investment scheme

For paragraph 1020G (1) (b) of the Act, Subdivision D of Division 2 of Part 7.9 of the Act does not apply in relation to a simple managed investment scheme to which this Subdivision applies.

7.9.11V Modification of Act — simple managed investment scheme

For paragraph 1020G (1) (c) of the Act, Part 7.9 of the Act is modified in its application to a simple managed investment scheme to which this Subdivision applies as set out in Part 5C of Schedule 10A.

7.9.11W Form and content of Product Disclosure Statement for simple managed investment scheme

(1) For modified paragraph 1013C (1) (a) of the Act, a Product Disclosure Statement for a simple managed investment scheme to which this Subdivision applies must include the information and statements mentioned in Schedule 10E.

(2) For modified paragraph 1013C (1) (b) of the Act, a Product Disclosure Statement for a simple managed investment scheme to which this Subdivision applies must be in the form mentioned in Schedule 10E.

7.9.11X Requirements for references to incorporated information for simple managed investment scheme

(1) For subsection 1013C (1B) of the Act, as modified by Part 5C of Schedule 10A, this regulation prescribes requirements for applying, adopting or incorporating, in a Product Disclosure Statement for a simple managed investment scheme to which this Subdivision applies, a matter contained in writing.

(2) A Statement may apply, adopt or incorporate a matter only if a provision of these Regulations requires or permits the matter to be applied, adopted or incorporated by the Statement.

(3) If a Product Disclosure Statement applies, adopts or incorporates a matter:

(a) the matter must be:

(i) in writing; and

(ii) clearly distinguishable from any other matters that are not applied, adopted or incorporated; and

(iii) publicly available in a document other than the Statement; and

(b) the responsible person for the Statement must identify the matter by:

(i) including in the Statement a concise description of the matter; and

(ii) ensuring that the reference to the matter is clearly distinguishable from the other contents of the Statement; and

(c) the responsible person for the Statement must:

(i) identify each version of the matter (by including the date on which the version was prepared) so that a person who, at a particular time, is considering a simple managed investment scheme to which this Subdivision applies can identify the version that is relevant to the simple managed investment scheme at that time; and

(ii) state the date on which the version was prepared in a prominent position at or near the front of the version; and

(d) the responsible person for the Statement must ensure that a person who is relying on the Statement is able to have access to:

(i) the matter; or

(ii) if there is more than 1 version of the matter — each version;

reasonably easily and reasonably quickly.

(4) The responsible person for the Product Disclosure Statement must also ensure that the Statement includes the statements in the following table relating to the matter, and sets them out in each place at which the matter has been applied, adopted or incorporated.

(5) The responsible person for the Product Disclosure Statement must also ensure that each document mentioned in subregulation (3) includes the statement in the following table relating to the matter.

(6) For the avoidance of doubt:

(a) the giving of a Product Disclosure Statement to which this Subdivision applies is taken to be the giving of every matter that is applied, adopted or incorporated in accordance with subregulations (1) to (5); and

(b) if a document mentioned in subparagraph (3) (a) (iii) refers to more than one PDS, the document:

(i) must include a statement to the effect that the information in the document forms part of the Product Disclosure Statement offered by the responsible entity; but

(ii) is not required to name each Product Disclosure Statement of which it forms part.

(7) If the Product Disclosure Statement applies, adopts or incorporates a matter, the information dealing with the matter is taken to have been given to a person on the day on which the person signs the application form accompanying the Statement.

7.9.11Y Retention of copies of Product Disclosure Statement for simple managed investment scheme

(1) The responsible person for a Product Disclosure Statement for a simple managed investment scheme to which this Subdivision applies must retain a copy of each version of the Statement that the responsible person issues for a period of 7 years starting on the day on which the version is prepared.

(2) The responsible person for the Product Disclosure Statement must retain a copy of the document from which a matter is applied, adopted or incorporated by the Statement as mentioned in paragraph 7.9.11X (3) (c) for a period of 7 years commencing on the day on which the Statement is prepared.

(3) If a document from which a matter is adopted, applied or incorporated by the Product Disclosure Statement as mentioned in paragraph 7.9.11X (3) (c) is changed in a way that changes the description of, or reference to, the matter, the responsible person for the Statement must retain a copy of the document for a period of 7 years commencing on the day on which the document is changed.

7.9.11Z Requirement to provide copy of Product Disclosure Statement for simple managed investment scheme free of charge

(1) For paragraph 1015C (5) (a) of the Act, this regulation specifies requirements as to the manner in which a Product Disclosure Statement for a simple managed investment scheme to which this Subdivision applies must be given to a person if the person requests a copy of the Statement.

(2) The responsible person for the Product Disclosure Statement must give the person, free of charge:

(a) a copy of the Statement within 8 business days; and

(b) a copy of a matter in writing that is applied, adopted or incorporated by the Statement within 8 business days.

[7] Subregulation 7.9.15DA (1)

omit

and subject to subregulation (4),

insert

and subject to subregulation (1A) and (4),

[8] After subregulation 7.9.15DA (1)

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(1A) This regulation does not apply if the Product Disclosure Statement is for:

(a) a margin loan; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 applies; or

(c) a simple managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9 applies.

[9] Regulation 7.9.15DB

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If section 1015B

insert

(1) If section 1015B

[10] Regulation 7.9.15DB

insert

(2) This regulation does not apply if the Product Disclosure Statement is for:

(a) a margin loan; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 applies; or

(c) a simple managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9 applies.

[11] Regulation 7.9.15DC

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A document,

insert

(1) A document,

[12] Regulation 7.9.15DC

insert

(2) This regulation does not apply if the Product Disclosure Statement is for:

(a) a margin loan; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 applies; or

(c) a simple managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9 applies.

[13] Regulation 7.9.16L

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For paragraph

insert

(1) For paragraph

[14] Regulation 7.9.16L

insert

(2) This regulation does not apply if the Product Disclosure Statement is for:

(a) a margin loan; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 applies; or

(c) a simple managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9 applies.

[15] Schedule 10A, heading

substitute

Schedule 10A Modifications of Part 7.9 of the Act

(regulations 7.9.02, 7.9.04, 7.9.05, 7.9.06, 7.9.10B, 7.9.11, 7.9.11C, 7.9.11N, 7.9.11V, 7.9.12, 7.9.24, 7.9.27, 7.9.30, 7.9.43, 7.9.47, 7.9.51, 7.9.56, 7.9.60, 7.9.61, 7.9.63, 7.9.73 and 8.4.02)

[16] Schedule 10A, after Part 5

insert

Part 5A Modifications for margin loan

5A.1 Section 1011B, after definition of regulated person

insert

Regulations means the Corporations Regulations 2001.

5A.2 Subsection 1013C (1)

substitute

(1) A Product Disclosure Statement for a margin loan to which Subdivision 4.2A of Division 4 of Part 7.9 of the Corporations Regulations 2001 applies must:

(a) include the statements and information required by regulations made for this paragraph; and

(b) be in the form required by regulations made for this paragraph.

(1A) If a law other than this Act or regulations under this Act requires the responsible person for the Product Disclosure Statement:

(a) to give, disclose or provide a matter; or

(b) to include a matter in the Statement;

the Statement may make provision for the matter by applying, adopting or incorporating the matter as in force at a particular time or as in force from time to time.

(1B) In addition to subsection (1A), a Product Disclosure Statement may make provision for a matter contained in writing by applying, adopting or incorporating the matter as in force at a particular time or as in force from time to time.

(1C) If a Product Disclosure Statement applies, adopts or incorporates a matter contained in writing:

(a) the applied, adopted or incorporated matter forms part of the Statement; and

(b) the responsible person for the Statement is not required to give the document which provides for the matter to a person (as part of giving the Statement or later) if that person has not asked for the document; and

(c) the responsible person for the Statement must give the document which provides for the matter to a person if that person asks for the document.

(1D) The regulations may prescribe requirements for applying, adopting, or incorporating a matter contained in writing in a Product Disclosure Statement.

(1E) A Product Disclosure Statement may refer to information, other than information to which subsection (1A) or (1B) applies, that is set out in another document; and

(1F) If the Product Disclosure Statement refers to other information as permitted by subsection (1E), that information does not form part of the Statement.

Note Although the information mentioned in subsection (1F) would not form part of the Product Disclosure Statement, it would be subject to requirements imposed by the Act or these Regulations such as the prohibition on making misleading or deceptive statements.

5A.3 Section 1013D

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5A.4 Section 1013E

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5A.5 Section 1013L

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1013L When Product Disclosure document may consist of 2 or more documents

A Product Disclosure Statement may consist of 2 or more documents, only if:

(a) one of the documents is a document that complies with the requirements for a Product Disclosure Statement under this Act and the Regulations; and

(b) the other document or documents contain a matter in writing that is applied, adopted or incorporated by the document mentioned in paragraph (a).

5A.6 Subdivision D, Division 2

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5A.7 Subsection 1015D (3)

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Part 5B Modifications for superannuation products to which Subdivision 4.2B of Division 4 of Part 7.9 applies

5B.1 Section 1011B, after definition of regulated person

insert

Regulations means the Corporations Regulations 2001.

5B.2 Subsection 1013C (1)

substitute

(1) A Product Disclosure Statement for a superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 of the Corporations Regulations 2001 applies must:

(a) include the statements and information required by regulations made for this paragraph; and

(b) be in the form required by regulations made for this paragraph.

(1A) If a law other than this Act or regulations under this Act requires the responsible person for the Product Disclosure Statement:

(a) to give, disclose or provide a matter; or

(b) to include a matter in the Statement;

the Statement may make provision for the matter by applying, adopting or incorporating the matter as in force at a particular time or as in force from time to time.

(1B) In addition to subsection (1A), a Product Disclosure Statement may make provision for a matter contained in writing by applying, adopting or incorporating the matter as in force at a particular time or as in force from time to time.

(1C) If a Product Disclosure Statement applies, adopts or incorporates a matter contained in writing:

(a) the applied, adopted or incorporated matter forms part of the Statement; and

(b) the responsible person for the Statement is not required to give the document which provides for the matter to a person (as part of giving the Statement or later) if that person has not asked for the document; and

(c) the responsible person for the Statement must give the document which provides for the matter to a person if that person asks for the document.

(1D) The regulations may prescribe requirements for applying, adopting, or incorporating a matter contained in writing in a Product Disclosure Statement.

(1E) A Product Disclosure Statement may refer to information, other than information to which subsection (1A) or (1B) applies, that is set out in another document; and

(1F) If the Product Disclosure Statement refers to other information as permitted by subsection (1E), that information does not form part of the Statement.

Note Although the information mentioned in subsection (1F) would not form part of the Product Disclosure Statement, it would be subject to requirements imposed by the Act or these Regulations such as the prohibition on making misleading or deceptive statements.

5B.3 Section 1013D

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5B.4 Section 1013E

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5B.5 Section 1013L

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1013L When Product Disclosure Statement may consist of 2 or more documents

A Product Disclosure Statement may consist of 2 or more documents only if:

(a) one of the documents is a document that complies with the requirements for a Product Disclosure Statement under this Act and the Regulations; and

(b) the other document or documents contain a matter in writing that is applied, adopted or incorporated by the document mentioned in subparagraph (a).

5B.6 Subsection 1015D (3)

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Part 5C Modifications for simple managed investment scheme

5C.1 Section 1011B, after definition of regulated person

insert

Regulations means the Corporations Regulations 2001.

5C.2 Subsection 1013C (1)

substitute

(1) A Product Disclosure Statement for a simple managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9 of the Corporations Regulations 2001 applies must:

(a) include the statements and information required by regulations made for this paragraph; and

(b) be in the form required by regulations made for this paragraph; and

(c) relate only to 1 simple managed investment scheme.

(1A) If a law other than this Act or regulations under this Act requires the responsible person for the Product Disclosure Statement:

(a) to give, disclose or provide a matter; or

(b) to include a matter in the Statement;

the Statement may make provision for the matter by applying, adopting or incorporating the matter as in force at a particular time or as in force from time to time.

(1B) In addition to subsection (1A), a Product Disclosure Statement may make provision for a matter contained in writing by applying, adopting or incorporating the matter as in force at a particular time or as in force from time to time.

(1C) If a Product Disclosure Statement applies, adopts or incorporates a matter contained in writing:

(a) the applied, adopted or incorporated matter forms part of the Statement; and

(b) the responsible person for the Statement is not required to give the document which provides for the matter to a person (as part of giving the Statement or later) if that person has not asked for the document; and

(c) the responsible person for the Statement must give the document which provides for the matter to a person if that person asks for the document.

(1D) The regulations may prescribe requirements for applying, adopting, or incorporating a matter contained in writing in a Product Disclosure Statement.

(1E) A Product Disclosure Statement may refer to information, other than information to which subsection (1A) or (1B) applies, that is set out in another document; and

(1F) If the Product Disclosure Statement refers to other information as permitted by subsection (1E), that information does not form part of the Statement.

Note Although the information mentioned in subsection (1F) would not form part of the Product Disclosure Statement, it would be subject to requirements imposed by the Act or these Regulations such as the prohibition on making misleading or deceptive statements.

5C.3 Section 1013E

omit

5C.4 Section 1013L

substitute

1013L When Product Disclosure Statement may consist of 2 or more documents

A Product Disclosure Statement may consist of 2 or more documents only if:

(a) one of the documents is a document that complies with the requirements for a Product Disclosure Statement under this Act and the Regulations; and

(b) the other document or documents contain a matter in writing that is applied, adopted or incorporated by the document mentioned in subparagraph (a).

5C.5 Subsection 1015D (3)

omit

[17] After Schedule 10BA

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Schedule 10C Form and content of Product Disclosure Statement — margin loan

(regulation 7.9.11D)

1 Length and font size for Product Disclosure Statement for margin loan

(1) The length of a Product Disclosure Statement for a margin loan (not including any title page, table of contents or matter in writing that is applied, adopted or incorporated by the Statement) must not exceed:

(a) if it is printed on A4 pages — 4 pages; or

(b) if it is printed on A5 pages — 8 pages; or

(c) if it is printed on DL pages — 12 pages; or

(d) otherwise — if it is formatted to be printed on A4 pages, 4 A4 pages.

(2) The minimum font size for text in the Statement is:

(a) for the name, address, ABN (if applicable), ACN (if applicable) and AFSL (if applicable) of the person giving the Statement — 8 points; and

(b) for all other text — 9 points.

Note 1 The Product Disclosure Statement must be worded and presented in a clear, concise and effective manner — see subsection 1013C (3) of the Act.

Note 2 A person required to a give a Product Disclosure Statement to a vision‑impaired person must comply with its obligations under the Disability Discrimination Act 1992.

2 Minimum content of Product Disclosure Statement for margin loan

(1) The Product Disclosure Statement must include the following sections, which must be numbered and titled as follows:

1. About [name of provider of the margin loan] and [name of margin loan product]

2. Benefits of [name of margin loan product]

3. How [name of margin loan product] works

4. What is a margin call?

5. The risk of losing money

6. The costs

7. How to apply.

(2) The Product Disclosure Statement must include:

(a) a table of contents that sets out the titles mentioned in subclause (1); and

(b) the telephone number of the provider of the margin loan to enable a borrower for the margin loan to request a copy of the following under regulation 7.9.11G:

(i) a copy of the Statement; and

(ii) a copy of a matter in writing that is applied, adopted or incorporated by the Statement.

(3) The Product Disclosure Statement must:

(a) advise a person reading the Statement that:

(i) it is a summary of significant information and contains a number of references to important information (each of which forms part of the Statement); and

(ii) the person should consider that information before making a decision about the product; and

(iii) the information provided in the Statement is general information only and does not take account of the person’s personal financial situation or needs; and

(iv) the person should obtain financial advice tailored to the person’s personal circumstances; and

(b) display the advice:

(i) at or near the beginning of the document; and

(ii) in a prominent position and style.

(4) The Product Disclosure Statement:

(a) may include additional sections after sections 1 to 7; and

(b) may include other information;

to an extent that does not have the effect of contravening subclause 1 (1).

(5) The Product Disclosure Statement does not need to indicate that a particular requirement is not applicable to the margin loan.

Note The Act, as modified in accordance with Subdivision 4.2A of Division 4 of Part 7.9, requires information to be included in the Product Disclosure Statement only to the extent to which the requirement is applicable to the margin loan.

3 Contents of section 1 (About [name of provider of the margin loan] and [name of margin loan product])

Section 1 of the Product Disclosure Statement must include:

(a) a short description of the margin loan provider and its business; and

(b) a short summary of what margin lending is; and

(c) a statement setting out the possible consequences of borrowing money to invest, including the effect of magnifying both gains and losses; and

(d) a statement that the borrower for a margin loan should regularly monitor the borrower’s portfolio so that:

(i) the borrower can be aware of changes (if any) to the terms of the margin loan; and

(ii) the borrower can take timely action to prevent potential losses in relation to the borrower’s portfolio; and

(e) a statement that the borrower for a margin loan may need, at short notice, to pay an additional amount into the margin loan or sell some of the investments for which the margin loan is made; and

(f) a statement that the provider of a margin loan has the right in certain circumstances to sell all, or part, of the borrower’s portfolio and may not be required under the terms of the margin loan to provide notice to the borrower of its intention to sell; and

(g) a statement that if the value of the portfolio for a margin loan does not cover the cost of repayments for the margin loan:

(i) the borrower for the margin loan may need to access other funds to repay the margin loan; or

(ii) the provider of the margin loan may sell assets provided as security for the margin loan, for example, the borrower’s residential property; and

(h) a statement that the law requires the provider of a margin loan to:

(i) assess whether the margin loan is unsuitable for the potential borrower for the margin loan; and

(ii) if the potential borrower for the margin loan requests a copy of the assessment — to provide a copy of the assessment to the potential borrower for the margin loan.

Note The provider of a margin loan is not required to give the borrower or potential borrower for the margin loan a copy of the assessment if the margin loan is not issued.

4 Contents of section 2 (Benefits of [name of margin loan product])

(1) Section 2 of the Product Disclosure Statement for a margin loan must include a description of the key benefits available to the borrower or potential borrower for the margin loan.

(2) Section 2 of the Statement may include a description about other benefits available to a borrower or potential borrower for the margin loan other than the benefits mentioned in subclause (1).

(3) Section 2 of the Statement may provide for the description mentioned in subclause (2) by applying, adopting or incorporating a matter in writing.

5 Contents of section 3 (How [name of margin loan product] works)

(1) Section 3 of the Product Disclosure Statement for a margin loan must include:

(a) an explanation of how margin lending works including information about the following:

(i) the maximum loan amount for the margin loan;

(ii) the loan‑to‑value ratios for the margin loan; and

(b) at least 1 example that illustrates the matters mentioned in subparagraphs (a) (i) and (ii); and

(c) a description of the financial products that the borrower or potential borrower for the margin loan can purchase with the margin loan (including the Approved Securities List for the provider or potential provider of the margin loan); and

(d) an explanation of who owns the investments purchased with the margin loan; and

(e) a statement that:

(i) details of the rights and obligations of the borrower for a margin loan are set out in the terms of the agreement for the margin loan; and

(ii) recommends that a potential borrower for a margin loan read the loan agreement; and

(iii) explains how a potential borrower can obtain a copy of the loan agreement; and

(f) an explanation of any other features of the margin loan that:

(i) are not covered by the matters mentioned in paragraphs (a), (c) and (d); and

(ii) are sufficiently important to be material to a reasonable person’s decision to take out the margin loan; and

(g) a reference to:

(i) the calculator provided on a website operated by or on behalf of the Commonwealth and an explanation of the assistance the calculator can provide; or

(ii) if the provider or potential provider of the margin loan provides a calculator to borrowers or potential borrowers for the margin loan — that calculator and an explanation of the assistance the calculator can provide.

(2) Section 3 of the Statement may provide for the following matters by applying, adopting or incorporating the matter in writing:

(a) the Approved Securities List;

(b) the explanation mentioned in paragraph (1) (f).

6 Contents of section 4 (What is a margin call?)

Section 4 of the Product Disclosure Statement for a margin loan must include:

(a) if the terms of the margin loan include a margin call:

(i) an explanation of what a margin call is; and

(ii) an explanation of when there will be a margin call in response to changes in the market; and

(iii) an explanation of when there will be a margin call at the discretion of the provider of the margin loan; and

(iv) at least 1 example of how a margin call works, including:

(A) the impact of breaching the loan‑to‑value ratio (LVR) for the margin loan; and

(B) how to adjust the LVR back to the required level for the margin loan; and

(C) how the buffer (if any) for the margin loan operates; and

(v) a description of how a margin call can be dealt with by the borrower for the margin loan; and

(vi) a statement that if there is a margin call, the provider of the margin loan will notify the borrower for the margin loan, or the borrower’s financial advisor, that the margin call has occurred; and

(vii) a statement that the borrower for the margin loan must be contactable at all times in case of a margin call; and

(b) if the terms of the margin loan do not include a margin call, a statement to that effect.

7 Contents of section 5 (The risk of losing money)

(1) Section 5 of the Product Disclosure Statement for a margin loan must include a description of the risks associated with margin lending to a borrower for the margin loan, including a description of any of the following risks, if relevant:

(a) the risk that the value of the borrower’s investment may fall and the possible consequences to the borrower if this occurs, in particular the risk of a margin call occurring;

(b) the risk that the provider of the margin loan may change the loan‑to‑value ratio of an investment at any time and the consequences to the borrower of the change, in particular, the risk of a margin call occurring;

(c) the risk that the provider of the margin loan may remove an investment from the Approved Securities List and the consequences for the borrower if this occurs, in particular, the risk of a margin call occurring;

(d) the risk that the interest rate for the margin loan may rise and the consequences for the borrower if this occurs, in particular, the possibility that interest payments owed by the borrower may exceed the returns available from the borrower’s portfolio;

(e) the risk of the loss of property of the borrower if the property has been mortgaged as security for, or in connection with, the margin loan;

(f) the risk of a default event under the loan agreement occurring and the potential consequences for the borrower if a default event does occur;

(g) the risk that the taxation laws may change and that this may have a negative effect on the tax position for the borrower for the margin loan;

(h) any other significant risks that a reasonable person would consider to be relevantly associated with the margin loan.

(2) Section 5 of the Statement must include a hyperlink to the page on a website operated by or on behalf of the Commonwealth that provides information about margin loans.

(3) Section 5 of the Statement may include information about risks associated with margin lending other than the risks mentioned in subclause (1).

(4) Section 5 of the Statement may provide for the information mentioned in subclause (3) by applying, adopting or incorporating a matter in writing.

8 Contents of section 6 (The costs)

(1) Section 6 of the Product Disclosure Statement for a margin loan must include the following:

(a) a description of the interest rate for the margin loan, including how the interest rate is calculated;

(b) a statement about whether a default interest rate will be charged for the margin loan;

(c) details of any fee or cost to be charged by the provider of the margin loan, unless the fee is a minor fee;

(d) a statement about whether a fee or cost to be charged by the provider for the loan can be unilaterally changed by the provider under the loan agreement;

(e) a list of matters for which the provider of the margin loan will charge a minor fee for the margin loan;

(f) a statement about whether a commission or fee is payable to a financial advisor or other third party for the margin loan and, if a commission or fee is payable:

(i) the circumstances in which the commission or fee will be payable; and

(ii) how the borrower for the margin loan can obtain more detailed information about the commission or fee.

(2) Section 6 of the Statement must include:

(a) a statement of the interest rate for the margin loan; and

(b) details of any minor fee the provider of the margin loan will charge for the margin loan.

(3) Section 6 of the Statement may provide for the statement mentioned in paragraph (2) (a) or the details mentioned in paragraph (2) (b) by applying, adopting or incorporating a matter in writing

9 Contents of section 7 (How to apply)

(1) Section 7 of the Product Disclosure Statement for a margin loan must include:

(a) information about how to apply for the margin loan; and

(b) a short summary about the dispute resolution system the provider of the margin loan has for dealing with disputes or complaints about the loan, including:

(i) how a borrower for the loan may make a complaint about the loan; and

(ii) contact details for making a complaint about the loan.

(2) The margin loan provider:

(a) may provide more detailed information about cooling‑off periods, complaints and dispute resolution; and

(b) may provide that information by applying, adopting or incorporating a matter in writing.

Schedule 10D Form and content of Product Disclosure Statement — superannuation product to which Subdivision 4.2B of Division 4 of Part 7.9 applies

(regulation 7.9.11O)

10 Contents of section 8 (Insurance in your super)

(1) If the superannuation product does not offer insurance cover, the Product Disclosure Statement is not required to include any of the information in this clause.

(2) If the superannuation product offers insurance cover, section 8 must:

(a) describe, in the form of a summary, the main types of insurance cover that a person can acquire; and

(b) describe, in the form of a summary, how to apply for insurance cover; and

(c) include a statement to the effect that there are costs associated with insurance cover; and

(d) describe, in the form of a summary, who is responsible for paying the insurance costs and how they are calculated.

(3) If the superannuation product offers insurance cover by default, section 8 must:

(a) describe, in the form of a summary, the level and type of cover; and

(b) state:

(i) the actual cost of the cover in dollars, or the range of costs that would be payable depending on a person’s circumstances; and

(ii) who is responsible for paying the costs; and

(c) state whether a person can:

(i) decline to acquire the cover; or

(ii) cancel the cover; and

(d) state how a person can decline to acquire the cover or cancel the cover; and

(e) state whether a person can change the person’s insurance cover; and

(f) state how a person can change the person’s insurance cover; and

(g) state, in the form of a warning, that, unless a person declines to acquire the default insurance cover or cancels it, the cost of the cover will be deducted from the person’s account or from the person’s contributions (as applicable); and

(h) include information about eligibility for, and the cancellation of, the insurance cover; and

(i) include information about any conditions and exclusions that are applicable to the insurance cover.

(4) If the superannuation product does not offer insurance cover by default but offers insurance cover as an option, section 8 must include the following information:

(a) the level and type of insurance cover available;

(b) the actual cost of the cover in dollars, or the range of costs that would be payable depending on a person’s circumstances;

(c) eligibility for, and the cancellation of, the insurance cover;

(d) any conditions and exclusions that are applicable to the insurance cover;

(e) any other significant matter in relation to insurance cover.

Examples for paragraph (e)

1 Information about how a person can apply for the insurance cover.

2 Information about how a person can subsequently change or cancel the insurance cover.

(5) The superannuation trustee:

(a) may provide the information in paragraphs (3) (h) and (i) and subclause (4); and

(b) may provide additional information about insurance cover;

by applying, adopting or incorporating a matter in writing.

(6) If information about:

(a) eligibility for, or the cancellation of, the insurance cover; or

(b) any conditions and exclusions that are applicable to the insurance cover;

is provided for in accordance with subclause (5), section 8 must include a warning to the effect that the matter may affect a person’s entitlement to insurance cover and that the information should be read before deciding whether the insurance is appropriate.

(7) If information about:

(a) the level and type of optional insurance cover available; or

(b) the actual cost of the optional insurance cover in dollars, or the range of costs that would be payable depending on a person’s circumstances; or

(c) any other significant matter in relation to insurance cover;

is provided for in accordance with subclause (5), section 8 must include a warning to the effect that the information should be read before deciding whether the insurance is appropriate.

11 Contents of section 9 (How to open an account)

(1) Section 9 of the Product Disclosure Statement must, if applicable:

(a) describe, in the form of a summary, how to open an account with the superannuation provider; and

(b) explain the cooling‑off period that applies to the superannuation product; and

(c) explain how to make a complaint (by means that include the provision of relevant contact details).

Note The effect of subclause 10 (1) is that the Product Disclosure Statement is not required to include section 8 (as set out in clause 10) if the superannuation product does not offer insurance cover. In that case, subclause 2 (2) allows the Statement to present the information in this clause as “section 8” or “section 9”.

(2) The superannuation trustee:

(a) may provide more detailed information about cooling‑off periods, complaints and dispute resolution; and

(b) may provide that information by applying, adopting or incorporating a matter in writing.

Schedule 10E Form and content of Product Disclosure Statement — simple managed investment scheme

(regulation 7.9.11W)