Document ID: chunk:federal_register_of_legislation:C2019A00050:clause:1_994b:p1
Version: federal_register_of_legislation:C2019A00050
Segment Type: clause
Provision Reference: sch 1 cl 994B (pt 1/3)
Character Range: 9313–11988

994B  Target market determinations for financial products

Requirement to make a target market determination
 (1) Subject to subsection (3), a person must make a target market determination for a financial product if:
 (a) under Part 6D.2, the person is required to prepare a disclosure document for the product; or
 (b) under Part 7.9, the person is required to prepare a Product Disclosure Statement for the product; or
 (ba) the product is covered by paragraph 994AA(1)(b) (about the extended operation of this Part) and:
 (i) the person issues the product to another person as a retail client; or
 (ii) the person sells the product under a regulated sale; or
 (c) regulations made for the purpose of this paragraph require the person to make a target market determination for the product.
 (2) A person required by subsection (1) to make a target market determination for a financial product must do so before:
 (a) if paragraph (1)(a), (b) or (ba) applies—any person engages in retail product distribution conduct in relation to the product; or
 (b) if paragraph (1)(c) applies:
 (i) the time or event specified in regulations made for the purposes of that paragraph; or
 (ii) if there is no time or event so specified—any person engages in retail product distribution conduct in relation to the product.
Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)).
Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.
 (3) Subsections (1) and (2) do not apply to:
 (a) a MySuper product; or
 (b) a margin lending facility; or
 (c) a security that has been or will be issued under an employee share scheme; or
 (d) a fully paid ordinary share in a company or a foreign company (except a fully paid ordinary share covered by subsection (4)); or
 (e) a financial product issued, or offered for regulated sale, by an exempt body or an exempt public authority; or
 (f) a financial product of a kind prescribed by regulations made for the purposes of this paragraph.
 (4) Paragraph (3)(d) does not apply to a fully paid ordinary share in a company or a foreign company if:
 (a) on the issue of the share, the company intended that the share be converted into a preference share within 12 months after the date of issue; or
 (b) the company:
 (i) carries on a business of investment in financial products, interests in land or other investments; and
 (ii) in the course of carrying on that business, invests funds subscribed, whether directly or indirectly, after an offer or invitation to the public (within the meaning of section