Following the introduction of the Corporations Legislation
Amendment (Financial Services Modernisation) Bill 2009
(Bill) into Parliament on 25 June 2009, ASIC
yesterday released two policy proposals, Consultation Paper 108
Margin lending: training of financial advisers and
Consultation Paper 109 Margin lending: Financial
requirements, which outline how ASIC proposes to:
apply training requirements to financial product advisers who
advise on margin lending facilities, and
apply the financial resource requirements to Australian
financial services (AFS) licensees who provide financial services
in relation to margin lending facility products.
We have been following the proposed changes being made to
Chapter 7 of the Corporations Act 2001 in relation to
margin lending for some time and have been providing Legal Updates
on this topic for the past twelve months.
Under the Bill, a margin lending facility will be regulated as a
financial product under Chapter 7 of the Corporations Act
2001. This means that firms offering or advising on margin
lending facilities will be required to obtain an Australian
Financial Services licence and will be subject to the conduct
obligations in Chapter 7, including the obligation to have adequate
financial resources and ensure that its representatives are
adequately trained and are competent to provide the financial
ASIC is now seeking public comment regarding the training
requirements and financial requirements for firms that offer or
advise on margin lending facilities. ASIC has also taken the
opportunity to remind current holders of an Australian financial
services licence that they will need to apply for a variation to
their existing licence if they intend to provide a financial
service in relation to a margin lending facility.
Submissions on the proposals contained in the Consultation
Papers close on Monday 10 August 2009. Details on
how to make a submission are contained in the Consultation Papers
and you can obtain a copy of the Consultation papers at www.asic.gov.au.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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