Document ID: chunk:federal_register_of_legislation:F2024C01249:reg:4:p46
Version: federal_register_of_legislation:F2024C01249
Segment Type: reg
Provision Reference: reg 4 (pt 46/49)
Character Range: 1096632–1099275

the circumstances mentioned in subregulation (1); and
 (b) an assessment has not yet been made in accordance with section 985F of the Act.
 (5) If the limit of the margin lending facility would be taken to increase further in accordance with subregulation (1):
 (a) the limit is taken not to be further increased until:
 (i) an assessment has been made in accordance with section 985F of the Act; and
 (ii) it is assessed that the facility will not be unsuitable for the client if the limit is increased; and
 (b) the provider must ensure that the increase does not continue unless paragraph (a) permits it.

If facility assessed as unsuitable
 (6) If:
 (a) the limit of a margin lending facility is taken to be increased in the circumstances mentioned in subregulation (1); and
 (b) the assessment made in accordance with section 985F of the Act assesses that the facility is unsuitable for the client because of the increased limit;
the limit is taken to be reduced to the limit of the margin lending facility before the increase, and the provider must ensure that the limit is reduced within 90 days of the day the assessment is made.

Facility not unsuitable for subsection 985K(4) of the Act
 (7) For subsection 985K(4) of the Act, a margin lending facility is taken not to be unsuitable if:
 (a) the limit of the margin lending facility is taken to be increased in the circumstances mentioned in subregulation (1); and
 (b) the assessment made in accordance with section 985F of the Act assesses that the facility:
 (i) is not unsuitable for the client; or
 (ii) is unsuitable for the client because of the increased limit; and
 (c) in the case of subparagraph (b)(ii), the provider ensures that the limit is reduced, within 90 days of the day the assessment is made, to the limit of the margin lending facility before the increase.

7.8.08B  Exemption from requirement to make unsuitability assessment
 (1) For paragraph 992C(1)(a) of the Act, a person is exempt from the requirement in paragraph 985E(1)(c) of the Act to make an assessment if the margin lending facility mentioned in paragraph 985E(1)(a) or (b) of the Act is a facility mentioned in subregulation (2):
 (a) in respect of the full amount of the loan, including any interest, fees and charges; and
 (b) in relation to which the client has not taken out a loan to fund the secured property contributed by the client for establishing the margin lending facility.
 (2) For subregulation (1), the facility is a standard margin lending facility under the terms of which:
 (a) the credit provided must be applied wholly:
 (i) to acquire one or more marketable securities, or a