Document ID: chunk:federal_register_of_legislation:C2005C00498:clause:1_3:p1
Version: federal_register_of_legislation:C2005C00498
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 1/2)
Character Range: 27820–30481

3                                              derivative              the person enters into the legal relationship that constitutes the financial product

 (3A) For the avoidance of doubt, none of the following are taken to give rise to the issue of a financial product to a person (the client):
 (a) the client making a further contribution to a superannuation fund of which the client is already a member;
 (b) the client making a further deposit into an RSA maintained in the client's name;
 (c) the client making a further payment under a life insurance investment product;
 (d) the client making a further deposit into a deposit product;
 (e) the client engaging in conduct specified in regulations made for the purposes of this paragraph in relation to a financial product already held by the client.

Issuer of a financial product

 (4) Subject to this section, the issuer, in relation to a financial product issued to a person (the client), is the person responsible for the obligations owed, under the terms of the facility that is the product:
 (a) to, or to a person nominated by, the client; or
 (b) if the product has been transferred from the client to another person and is now held by that person or another person to whom it has subsequently been transferred—to, or to a person nominated by, that person or that other person.

Note: For example, the issuer of a direct debit facility is the financial institution with which the account to be debited is held, rather than the persons to whom payments can be made using the facility.

 (5) Subject to subsection (7), each person who is a party to a financial product that:
 (a) is a derivative; and
 (b) is not entered into, or acquired, on a financial market;
is taken to be an issuer of the product.

Note 1: Under paragraph (1)(a), each person who is a party to the derivative will also acquire the financial product at the time of its issue as specified in subsection (3).

Note 2: Although each party to the derivative is an issuer, whether any particular party has disclosure or other obligations under this Chapter will depend on the circumstances (e.g. whether the issue occurs in the course of a business of issuing financial products and whether any of the other parties is a retail client).

 (6) Subject to subsection (7), the issuer of a financial product that:
 (a) is a derivative; and
 (b) is entered into, or acquired, on a financial market;
is taken to be:
 (c) if the product is entered into, or acquired, on the market through an arrangement made by a financial services licensee acting on behalf of another person—the financial services licensee; or
 (d) if the product is