Document ID: chunk:federal_register_of_legislation:F2023C00928:reg:8:p21
Version: federal_register_of_legislation:F2023C00928
Segment Type: reg
Provision Reference: reg 8 (pt 21/34)
Character Range: 66612–69580

(22)(c) does not apply if:
                  (a) both the following are satisfied:
                     (i) the client has previously given written consent separate to the MDA contract to invest the client portfolio assets in the non-limited recourse product;
                     (ii) when consent was given, the client was given a statement in writing about the non-limited recourse product that included the information required by subsection (24) and the client acknowledges the statement in the consent; or
                  (b) consent and a written statement that comply with paragraph (a) for a non-limited recourse product of the same type has previously been given by the client and the investment program contained in the MDA contract for the client has not changed or has not fallen due for a review as required under subsection 912AEB(8).
              (24) The following information is required for the purposes of subparagraph (23)(a)(ii):
                  (a) information about the key features of the product (including any significant risks associated with acquiring the product) that may be material to the decision of a person as a retail client whether to do so;
                  (b) information about the degree of leverage that may apply in relation to the product, including:
                     (i) if the maximum potential liability of a person holding the product is unlimited—a statement to that effect; and
                     (ii) otherwise—the maximum value of the ratio between the maximum potential liability of a person holding the product and the amount payable by the person to acquire the product;
                  (c) a clear and prominent example illustrating in dollars the risk of the potential liability of a person holding the product;
                  (d) information about the policy of the licensee for communicating and satisfying margin calls or requirements to provide collateral or make payments in relation to the product;
(e) information about the policy of the licensee for closing positions at a loss in relation to the product.
              (25) For the purposes of subsection (23), a person is taken to give written consent if the person would be taken to give written consent under section 9 of the Electronic Transactions Act 1999 if it applied to that subsection.

                  912AED Insurance requirements
The licensee must maintain at all times professional indemnity insurance and insurance covering fraud by its officers and employees that:
(a) is adequate having regard to the nature of the activities carried out by the licensee in relation to MDA services; and
(b) covers claims at the same time amounting in aggregate to the lesser of:
(i) $5 million; or
(ii) the aggregated average value of the client portfolio assets of all people to whom it provided MDA services as retail clients during a 12 months period ending no more than one month previously or, if it has not been providing MDA