Document ID: chunk:federal_register_of_legislation:C2025C00185:section:761ea:p1
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 761EA (pt 1/3)
Character Range: 2990432–2993178

761EA  Meaning of margin lending facility, margin call and associated expressions
 (1) A margin lending facility is:
 (a) a standard margin lending facility; or
 (b) a non‑standard margin lending facility; or
 (c) a facility of a kind that has been declared by ASIC to be a margin lending facility under subsection (8);
unless the facility is of a kind that has been declared by ASIC not to be a margin lending facility under subsection (9).

Standard margin lending facilities
 (2) A standard margin lending facility is a facility under the terms of which:
 (a) credit is, or may be, provided by a person (the provider) to a natural person (the client); and
 (b) the credit provided is, or must be, applied wholly or partly:
 (i) to acquire one or more financial products, or a beneficial interest in one or more financial products; or
 (ii) to repay, wholly or partly, another credit facility (within the meaning of subparagraph 765A(1)(h)(i)), the credit provided under which was applied, wholly or partly, to acquire one or more financial products, or a beneficial interest in one or more financial products; and
 (c) the credit provided is, or must be, secured by property (the secured property); and
 (d) the secured property consists, or must consist, wholly or partly of one or more marketable securities, or a beneficial interest in one or more marketable securities; and
 (e) if the current LVR of the facility exceeds a ratio, percentage, proportion or level (however described) determined under the terms of the facility, then:
 (i) the client becomes required to take action; or
 (ii) the provider becomes entitled to take action; or
 (iii) another person becomes required or entitled to take action;
  in accordance with the terms of the facility to reduce the current LVR of the facility.
 (3) The current LVR of a standard margin lending facility at a particular time is the ratio, percentage, proportion or level (however described) that:
 (a) is determined under the terms of the facility; and
 (b) under the terms of the facility, represents a particular relationship between:
 (i) the amount of the debt owing by the client, or credit provided by the provider, or both, under the facility at that time; and
 (ii) the value of the secured property determined at that time under the terms of the facility.
 (4) A standard margin lending facility is in margin call when paragraph (2)(e) applies in relation to the facility.

Non‑standard margin lending facilities
 (5) A non‑standard margin lending facility is a facility under the terms of which:
 (a) a natural person (the client) transfers one or more marketable securities, or a beneficial interest in one or more marketable securities (the transferred securities) to another