Document ID: chunk:federal_register_of_legislation:F2023C00928:reg:8:p20
Version: federal_register_of_legislation:F2023C00928
Segment Type: reg
Provision Reference: reg 8 (pt 20/34)
Character Range: 63933–66921

(d) the agreement with the custodian has reasonable liability provisions and does not include provisions that exclude the liability of the custodian for direct loss that it would have if the exclusion were not included except in particular circumstances that the licensee considers to be reasonable and contains, if appropriate, reasonable indemnity provisions in relation to losses caused to the licensee or to the relevant client or clients by the custodian's acts and omissions that relate to that agreement; and
                  (e) it does not, under the agreement with the custodian or otherwise, permit the granting of a security interest, mortgage, lien or other encumbrance in favour of the custodian or its associates unless the licensee reasonably believes, for reasons it has recorded in writing, that any conflict that may arise as a result of the security interest, mortgage, lien or encumbrance will not materially increase the risks that the custodian will fail to meet its obligations and the licensee must keep the written record of reasons for 7 years after the security interest has ceased.

       Rights relating to portfolio assets conditions
              (20) If a MDA contract between the licensee and a person as a retail client includes provisions that require the licensee to consider exercising, or to exercise, a right that relates to client portfolio assets, the licensee must fulfil those duties as provided in the MDA contract.
              (21) If a MDA contract between the licensee and a person as a retail client does not include provisions that require the licensee to consider exercising, or to exercise, a right that relates to client portfolio assets, the licensee must:
                  (a) give to the client, as soon as practicable after receipt, a copy of all the communications sent to the licensee that are relevant to the exercise of the right; and
                  (b) take reasonable steps to implement any instructions given by the client about how the right relating to the assets is to be exercised.

           Investment in unregistered schemes and non-limited recourse products

              (22) The licensee must ensure that the client portfolio assets of a person who entered in a MDA contract do not include:
                  (a) interests in a managed investment scheme that is not a registered scheme or a notified foreign passport fund; or
                  (b) interests in a scheme that is not a managed investment scheme because of paragraph (e) of the definition of managed investment scheme in section 9 of the Act; or
                  (c) a non-limited recourse product.
              (23) Paragraph (22)(c) does not apply if:
                  (a) both the following are satisfied:
                     (i) the client has previously given written consent separate to the MDA contract to invest the client portfolio assets in the non-limited recourse product;
                     (ii) when consent was given,