Document ID: chunk:federal_register_of_legislation:C2007A00055:clause:7_1:p1
Version: federal_register_of_legislation:C2007A00055
Segment Type: clause
Provision Reference: sch 7 cl 1 (pt 1/4)
Character Range: 60225–63002

1  After Division 243
Insert:

Division 247—Capital protected borrowings

Guide to Division 247

247‑1  What this Division is about

      Capital protection provided under a relevant capital protected borrowing to the extent that it is not provided by an explicit put option is treated (for the borrower) as if it were a put option.
      An amount attributable to capital protection under any relevant capital protected borrowing is treated (for the borrower) as a payment for a put option.

Table of sections

Operative provisions

247‑5 Object of Division
247‑10 What capital protected borrowing and capital protection are
247‑15 Application of this Division
247‑20 Treating capital protection as a put option
247‑25 Number of put options
247‑30 Exercise or expiry of option

Operative provisions

247‑5  Object of Division

  The object of this Division is to ensure that amounts for *capital protection under all relevant *capital protected borrowings are treated (for the borrower) under this Act as a payment for a put option.

247‑10  What capital protected borrowing and capital protection are

 (1) An *arrangement under which a *borrowing is made, or credit is provided, is a capital protected borrowing if the borrower is wholly or partly protected against a fall in the *market value of a thing (the protected thing) to the extent that:
 (a) the borrower uses the amount borrowed or credit provided to acquire the protected thing; or
 (b) the borrower uses the protected thing as security for the borrowing or provision of credit.

 (2) That protection is called capital protection.

247‑15  Application of this Division

 (1) This Division applies to a *capital protected borrowing only if the protected thing is a beneficial interest in:
 (a) a *share, a unit in a unit trust or a stapled security; or
 (b) an entity that holds a beneficial interest in a share, unit in a unit trust or stapled security either directly, or indirectly through one or more interposed entities.

 (2) This Division applies only to borrowers under *capital protected borrowings.

 (3) This Division does not apply to a *capital protected borrowing under which a *share or stapled security is acquired under an *employee share scheme.

 (4) This Division does not apply to a *capital protected borrowing entered into before 1 July 2007 (except to the extent that it is extended on or after that day) unless the *share, unit in a unit trust or stapled security is listed for quotation in the official list of an *approved stock exchange.

 (5) This Division does not apply to a *capital protected borrowing entered into on or after 1 July 2007 if:
 (a) the protected thing is a beneficial interest in:
 (i) a *share, unit or stapled security that is not listed for quotation in