Document ID: chunk:federal_register_of_legislation:C2004A00897:clause:1_4:p1
Version: federal_register_of_legislation:C2004A00897
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 1/7)
Character Range: 201505–204353

4                 An *interest issued by the entity that:
                  (a) gives its holder (or an *associate of the holder) a right to be issued with an *equity interest in the entity or an associate of the entity; or
                  (b) is an interest that will, or may, convert into an equity interest in the entity or an associate of the entity

This subsection has effect subject to subsection (3) (requirement for financing arrangement).

Note: Section 974‑90 as applied by subsection (1) allows regulations to be made clarifying when a right or return is taken to be at the discretion of an entity or an associate.

Financing arrangement

 (3) A *scheme that would otherwise give rise to an *equity interest in an entity that is a trust or partnership because of an item in the table in subsection (2) (other than item 1) does not give rise to an equity interest in the entity unless the scheme is a *financing arrangement (see section 974‑130 as applied by this section) for the trust or partnership.

Form interest may take

 (4) The interest referred to in item 2, 3 or 4 in the table in subsection (2) may take the form of a proprietary right, a chose in action or any other form.

Regulations

 (5) Subject to regulations made under subsection (6), the regulations made under Subdivisions 974‑C, 974‑D and 974‑F are applied for the purposes of this section as if they were regulations made under the provisions applied by subsection (1).

 (6) Regulations may be made under the provisions applied by subsection (1) specifically in relation to:
 (a) an *equity interest in a trust; or
 (b) an equity interest in a partnership.

Subdivision 820‑K—Zero‑capital amount

Guide to Subdivision 820‑K

820‑940  What this Subdivision is about

      The zero‑capital amount represents the value of certain assets that receive special treatment in working out the maximum allowable debt of a financial entity. This Subdivision sets out the rules about the calculation of this amount.

Table of sections

820‑942 How to work out the zero‑capital amount

[This is the end of the Guide.]

820‑942  How to work out the zero‑capital amount

 (1) An entity's zero‑capital amount at a particular time is the result of the method statement in this subsection.

      Method statement
           Step 1. Work out the total amounts, as at that particular time, that have been received by the entity for the sale of securities (other than any fees associated with the sale) under the following *arrangements if the entity has not repurchased the securities under the arrangements at that time:

                (a) reciprocal purchase agreements (otherwise known as repurchase agreements);
                (b) sell‑buyback arrangements;
                (c) securities loan arrangements.

           Step 2. Add to the result of step 1 the