Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p22
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 22/34)
Character Range: 3579199–3581900

of that kind on a regular basis and the relevant distribution is not made in accordance with that practice; or
 (ii) the entity does not have a practice of making distributions of that kind on a regular basis;
 (b) there is an issue of *equity interests in the entity or any other entity (whether before, at or after the time at which the relevant distribution was made);
 (c) it is reasonable to conclude having regard to all relevant circumstances that:
 (i) the principal effect of the issue of any of the equity interests was the direct or indirect funding of a substantial part of the relevant distribution or the relevant part; and
 (ii) any entity that issued, or facilitated the issue of, any of the equity interests did so for a purpose (other than an incidental purpose) of funding a substantial part of the relevant distribution or the relevant part;
 (d) the issue of the equity interests was not a direct response in order to meet a requirement, direction or recommendation from *APRA or *ASIC.

When an entity has a practice of making distributions of a certain kind on a regular basis
 (2) In considering whether the condition in paragraph (1)(a) is satisfied, take the following matters into account:
 (a) the nature of distributions made by the entity before the time at which the relevant distribution was made (including the extent to which such distributions were a return on capital);
 (b) the timing of such distributions;
 (c) the amount of such distributions;
 (d) any explanations given by the entity for making such distributions;
 (e) the amount of the *franking credits on, and the *franking percentages for, such distributions;
 (f) any other relevant consideration.

Distributions funded by issuing equity interests are to be disregarded in determining past practice
 (3) In considering whether the condition in paragraph (1)(a) is satisfied, disregard a distribution if:
 (a) the distribution:
 (i) is a *franked distribution; or
 (ii) would be a franked distribution if subsection (1) did not apply to it; and
 (b) subsection (1) would apply to all or any part of the distribution if paragraph (1)(a) were omitted.

When issue of equity interests has the effect or purpose of funding all or part of a distribution
 (4) In considering whether the condition in paragraph (1)(c) is satisfied, take the following matters into account:
 (a) the extent to which the time (or times) at which any of the *equity interests mentioned in that paragraph were issued differs (or differ) from the time at which the relevant distribution was made;
 (b) the extent to which the amount of the funds from the issue of any of those equity interests differs from the amount of the relevant