Document ID: chunk:federal_register_of_legislation:C2025C00185:section:766e
Version: federal_register_of_legislation:C2025C00185
Segment Type: section
Provision Reference: s 766E
Character Range: 3042771–3045297

766E  Meaning of custodial or depository service
 (1) A person (the provider) provides a custodial or depository service to another person (the client) if, under an arrangement between the provider and the client, or between the provider and another person with whom the client has an arrangement, (whether or not there are also other parties to any such arrangement), a financial product, or a beneficial interest in a financial product, is held by the provider in trust for, or on behalf of, the client or another person nominated by the client.
 (2) The following provisions apply in relation to a custodial or depository service:
 (a) subject to paragraph (b), the time at which a custodial or depository service is provided is the time when the financial product or beneficial interest concerned is first held by the provider as mentioned in subsection (1);
 (b) for the purposes of Part 7.6, and of any other provisions of this Act prescribed by regulations made for the purposes of this paragraph, the continued holding of the financial product or beneficial interest concerned by the provider as mentioned in subsection (1) also constitutes the provision of a custodial or depository service.
Note: Because of paragraph (a) (subject to regulations made for the purposes of paragraph (b)), the requirements of Part 7.7 relating to financial services disclosure need only be complied with before the product or interest is first held by the provider. However, because of paragraph (b), the provider will be subject to the licensing and related requirements of Part 7.6 for so long as they continue to hold the product or interest.
 (3) However, the following conduct does not constitute providing a custodial or depository service:
 (a) the operation of a clearing and settlement facility;
 (b) the operation of a registered scheme, or the holding of the assets of a registered scheme;
 (ba) the operation of a notified foreign passport fund;
 (bb) the holding of the assets of a notified foreign passport fund;
 (c) the operation of:
 (i) a regulated superannuation fund; or
 (ii) an AFCA regulated superannuation scheme; or
 (iii) an approved deposit fund; or
 (iv) a pooled superannuation trust;
  by the trustees of that fund, scheme or trust;
 (ca) the operation of a statutory fund by a life company (within the meaning of the Life Insurance Act 1995);
 (d) the provision of services to a related body corporate;
 (e) any other conduct of a kind prescribed by regulations made for the purposes of this paragraph.