Document ID: chunk:federal_register_of_legislation:C2025C00182:section:12baa:p2
Version: federal_register_of_legislation:C2025C00182
Segment Type: section
Provision Reference: s 12BAA (pt 2/5)
Character Range: 65084–67746

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).

Meaning of manages a financial risk
 (5) For the purposes of this section, a person manages financial risk if they:
 (a) manage the financial consequences to them of particular circumstances happening; or
 (b) avoid or limit the financial consequences of fluctuations in, or in the value of, receipts or costs (including prices and interest rates).
Note 1: Examples of actions that constitute managing a financial risk are:
(a) taking out insurance; or
(b) hedging a liability by acquiring a futures contract or entering into a currency swap.
Note 2: An example of an action that does not constitute managing a financial risk is employing a security firm (while that is a way of managing the risk that thefts will happen, it is not a way of managing the financial consequences if thefts do occur).

Meaning of makes non‑cash payments
 (6) For the purposes of this section, a person makes non‑cash payments if they make payments, or cause payments to be made, otherwise than by the physical delivery of Australian currency in the form of notes and/or coins.
Note: Examples of actions that constitute making non‑cash payments are:
(a) making payments by means of a facility for direct debit of a deposit account; or
(b) making payments by means of a facility for the use of cheques; or
(c) making payments by means of a purchased payment facility within the meaning of the Payment Systems (Regulation) Act 1998, such as a smart card; or
(d) making payments by means of traveller's cheques in Australian currency.

Specific things that are financial products (subject to subsection (8))
 (7) Subject to subsection (8), the following are financial products for the purposes of this Division:
 (a) a security;
 (b) any of the following in relation to a managed investment scheme:
 (i) an interest in the scheme;
 (ii) a legal or equitable right or interest in an interest covered by subparagraph (i);
 (iii) an option to acquire, by way of issue, an interest or right covered by subparagraph (i)