Document ID: chunk:federal_register_of_legislation:F2024C01249:reg:4:p26
Version: federal_register_of_legislation:F2024C01249
Segment Type: reg
Provision Reference: reg 4 (pt 26/49)
Character Range: 1046856–1049597

the receiving licensee maintained for section 981B of the Act.

Permissible investments
 (2) For paragraph 981C(1)(a) of the Act, and subject to subregulations (3), (4) and (5), the following kinds of investment may be made in relation to an account maintained for section 981B of the Act:
 (a) investment in any manner in which trustees are for the time being authorised by law to invest trust funds;
 (b) investment on deposit with an eligible money market dealer;
 (c) investment on deposit at interest with an Australian ADI;
 (d) the acquisition of cash management trust interests;
 (e) investment in a security issued or guaranteed by the Commonwealth or a State or Territory;
 (f) investment on deposit with a licensed CS facility.
 (3) A financial services licensee must not invest an amount in a way permitted by subregulation (2) unless:
 (a) the financial services licensee has obtained the client's written agreement to the following matters:
 (i) the making of the investment;
 (ii) how earnings on the investment are to be dealt with (including whether or not the earnings are to be shared, and whether or not the earnings are to be paid into the account);
 (iii) how the realisation of the investment is to be dealt with (including whether or not the capital invested, and the proceeds of the investment, are to be deposited into the account);
 (iv) how any losses made on the investment are to be dealt with (including the circumstances in which the financial services licensee is required to pay an amount equal to the difference between the amount invested and the amount received, into the account or otherwise);
 (v) the fee (if any) that the financial services licensee proposes to charge for the investment; and
 (b) the money is money to which the client is entitled.
Note: The investment arrangement may be a managed investment scheme.
 (4) For paragraph 981A(4)(a) of the Act, subregulation (3) does not apply to money to which subregulation 7.8.01(4) applies.
 (5) In subregulation (2):
investment does not include the making of an investment in accordance with the specific direction of a client.
Note: Paragraph (1)(a) deals with the withdrawal of money from an account in accordance with the written direction of a person entitled to the money.
 (6) For paragraph 981C(1)(b) of the Act, in relation to moneys received in relation to insurance products, the financial services licensee must ensure that:
 (a) the balance of moneys in an account maintained by the financial services licensee under section 981B of the Act; and
 (b) the total amount previously withdrawn from the account and currently invested under subregulation (2);
is at least the sum of:
 (c) any amounts that an insurer is entitled to receive