Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 11/30)
Character Range: 7807797–7810583

securities lending arrangement under section 26BC of the Income Tax Assessment Act 1936;
 (c) a life insurance or general insurance contract undertaken as part of the issuer's ordinary course of business;
 (d) a scheme for the payment of royalties (within the meaning of the Income Tax Assessment Act 1936) other than:
 (i) a qualifying arrangement for the purposes of Division 16D of Part III of the Income Tax Assessment Act 1936; or
 (ii) a relevant agreement for the purposes of section 128AC of that Act; or
 (iii) a scheme or arrangement for the payment of royalties in relation to an asset if Division 250 of this Act applies to a person and the asset.
 (5) The regulations may:
 (a) specify that particular *schemes are not financing arrangements; and
 (b) specify circumstances in which a scheme will not be a financing arrangement.

974‑135  Effectively non‑contingent obligation
 (1) There is an effectively non‑contingent obligation to take an action under a *scheme if, having regard to the pricing, terms and conditions of the scheme, there is in substance or effect a non‑contingent obligation (see subsections (3), (4) and (6)) to take that action.
 (2) Without limiting subsection (1), that subsection applies to:
 (a) providing a *financial benefit under the *scheme; or
 (b) terminating the scheme.
 (3) An obligation is non‑contingent if it is not contingent on any event, condition or situation (including the economic performance of the entity having the obligation or a *connected entity of that entity), other than the ability or willingness of that entity or connected entity to meet the obligation.
 (4) The existence of the right of the holder of an *interest that will or may convert into an *equity interest in a company to convert the interest does not of itself make the issuer's obligation to repay the investment not non‑contingent.
 (5) An obligation to redeem a preference share is not contingent merely because there is a legislative requirement for the redemption amount to be met out of profits or a fresh issue of *equity interests.
 (6) In determining whether there is in substance or effect a non‑contingent obligation to take the action, have regard to the artificiality, or the contrived nature, of any contingency on which the obligation to take the action depends.
Note: The artificiality, or the contrived nature, of a contingency would tend to indicate that there is, in substance or effect, a non‑contingent obligation to take that action.
 (7) An obligation of yours is not effectively non‑contingent merely because you will suffer some detrimental practical or commercial consequences if you do not fulfil the obligation.
Note: For example, a contingent obligation to make payments in respect of an income security issued by an approved