Document ID: chunk:federal_register_of_legislation:F2024C01249:reg:1:p68
Version: federal_register_of_legislation:F2024C01249
Segment Type: reg
Provision Reference: reg 1 (pt 68/148)
Character Range: 502551–505274

the time that a financial service (eg financial product advice, disposal of the product) is provided to the client in respect of an existing product.

Value
 (2) For paragraph 761G(7)(a) of the Act, the amount applicable in relation to an income stream financial product is $500 000.

Working out value: general rule
 (3) For paragraph 761G(10)(a) of the Act, the value of an income stream product is the amount worked out in accordance with any of the following paragraphs:
 (a) if the terms of the income stream financial product provide for the calculation of a commutation value—the commutation value;
 (b) if the terms of the income stream financial product do not permit commutation—the minimum commutation amount calculated in accordance with ordinarily accepted actuarial standards;
 (c) if the income stream financial product is of a kind in relation to which money stands to the client's credit for the income stream financial product—the amount of money standing to the client's credit.
 (4) For subregulation (3), in calculating the value of an income stream financial product:
 (a) disregard any amount standing to the client's credit in relation to the income stream financial product to the extent that it is to be paid, or was to be paid, out of money lent by:
 (i) the person offering the income stream financial product; or
 (ii) an associate of that person; and
 (b) disregard any amount of fees or charges:
 (i) that the product issuer has an actual or accrued right to deduct from the value of the income stream financial product (whether or not the amount has been deducted); or
 (ii) that has accrued as at the time that the client's status as a retail or wholesale client is assessed.
 (5) If it is not reasonably practicable to ascertain an amount in accordance with subregulation (3), the value of the income stream product is an amount calculated as follows:
 (a) identify the price for the provision of the income stream;
 (b) subtract the total of any amounts paid out of the income stream (including any regular payments and any capital amounts);
 (c) subtract an amount representing the reasonable administrative fees or other expenses of the issuer (including any costs or fees relating to the product that were disclosed to the client at or before the time the product was issued);
 (d) add interest on:
 (i) the amount paid for the income stream financial product; or
 (ii) an amount, or a reasonable notional amount, representing the value of the income stream financial product;
  based on movements in the rate of the All Groups Consumer Price Index number (being the weighted average of the 8 Australian capital cities) published by the Australian Statistician.

Group products
 (6) If