Document ID: chunk:federal_register_of_legislation:F2021C00160:body:0:p7
Version: federal_register_of_legislation:F2021C00160
Segment Type: other
Provision Reference: 
Character Range: 16405–19603

other interposed vehicles; or

                    (ii) the property was invested in the first mentioned interposed vehicle through or by another interposed vehicle; and

                (b) property is not invested in or through an interposed vehicle if the property is invested in the vehicle by a body, trust or partnership that:

                    (i) is not an interposed vehicle; and

                    (ii) is not the trustee or responsible entity.

            (3) Without limiting subclause (1), the indirect costs of a product or investment option referred to in subclause (1) include:

                (a) the following amounts where the responsible person knows, or reasonably ought to know or, where this is not the case, may reasonably estimate those amounts:

                    (i) in relation to a derivative financial product that is not an option to acquire or dispose of a financial product—the amount that is the difference between the underlying return and the actual return for the derivative financial product, where the actual return on the product or option is less than the underlying return on the derivative financial product over the relevant financial year; or

                    (ii) in relation to a derivative financial product that is an option to acquire or dispose of a financial product—any amount by which the cost incurred to acquire the derivative financial product exceeds the amount that would be obtained on its disposal at that time; or

                (b) where the responsible person does not know, does not believe they reasonably ought to know, and is not able to reasonably estimate without taking steps that the responsible person considers unreasonable, the amount in paragraph (a) (as applicable) in relation to a derivative financial product—the following amounts in relation to the derivative financial product:

                    (i) in relation to a derivative financial product that is not an option to acquire or dispose of a financial product—the greater of:

                         (A) the amount calculated using the following formula:

    relevant percentage x value x (n/365)

                         where:

                         n means the number of days that the derivative financial product was held by the responsible person or interposed vehicle during the relevant financial year;

                         relevant percentage means 0.1%; and

                         value, in relation to a derivative financial product, means the value of the ultimate reference assets, in each case taking into account any leverage, offsets or similar adjustments applied to or between the ultimate reference assets under the terms of the derivative financial product; and

                         (B) the minimum amount that the responsible person believes or has reasonable grounds to believe would apply under paragraph (a);

                    (ii) in relation to a derivative financial product that is an option to acquire or dispose of a financial product—the lesser of:

                         (A) the amount that would apply under subparagraph (i) if the exclusion from that subparagraph (i) of options did not