Document ID: chunk:federal_register_of_legislation:C2025C00185:section:763b
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 763B
Character Range: 3014020–3016142

763B  Meaning of makes a financial investment
  A person (the investor) makes a financial investment if:
 (a) the investor gives money or money's worth (the contribution) to another person and any of the following apply:
 (i) the other person uses the contribution to generate a financial return, or other benefit, for the investor;
 (ii) the investor intends that the other person will use the contribution to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated);
 (iii) the other person intends that the contribution will be used to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated); and
 (b) the investor has no day‑to‑day control over the use of the contribution to generate the return or benefit.
Note 1: Examples of actions that constitute making a financial investment under this subsection are:
(a) a person paying money to a company for the issue to the person of shares in the company (the company uses the money to generate dividends for the person and the person, as a shareholder, does not have control over the day‑to‑day affairs of the company); or
(b) a person contributing money to acquire interests in a registered scheme from the responsible entity of the scheme (the scheme uses the money to generate financial or other benefits for the person and the person, as a member of the scheme, does not have day‑to‑day control over the operation of the scheme).
Note 2: Examples of actions that do not constitute making a financial investment under this subsection are:
(a) a person purchasing real property or bullion (while the property or bullion may generate a return for the person, it is not a return generated by the use of the purchase money by another person); or
(b) a person giving money to a financial services licensee who is to use it to purchase shares for the person (while the purchase of the shares will be a financial investment made by the person, the mere act of giving the money to the licensee will not of itself constitute making a financial investment).