ASIC Releases Guidance on Margin Lending Laws

The margin lending reforms, which will amend the Corporations Act 2001 and the Corporations Regulations 2001, received royal assent on 6 November 2009 (the commencement date of the legislation has not been announced as yet). Broadly, the reforms will require the following:

• margin lenders will need to have an Australian Financial Services Licence (AFSL) with the relevant margin lending authorisations;
• advisers or dealers in margin lending products will need to apply for or vary their AFSL (or if acting as an authorised representative,ensure that they are properly authorised to advise or deal in these products); and
• an unsuitability assessment must be performed on all individuals issued with a margin lending product.

On 8 December 2009, ASIC released guidance on the margin lending reforms by releasing updated versions of some of its regulatory guides. They address:

• licence applications and variations (RG02 and RG03);
• training requirements for margin facility advisers (RG146); and
• financial resources requirements (RG166). 

We have summarised ASIC’s guidance in a 1 page mind map. Click on the diagram below to download it.

We have also updated our previous 1 page summary of the complete margin lending scheme. Click on the diagram to download it.

ASIC Releases Guidance on Margin Lending Laws by Holley Nethercote Commercial Lawyers is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Australia License.

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