FOI 23 24 160 Document 08.pdf

Released by the Department of Finance under the Freedom of Information Act 1982
FOI 23-24/160 - Document 08
Australian Securities
and Investments Commission
Office address (inc courier deliveries):

Level 5, 100 Market Street,
Discretionary Payments Team
Sydney NSW 2000
Risk & Claims Branch
Mail address for Sydney office:
Department of Finance
GPO Box 9827,

Brisbane QLD 4001

Tel: +61 1300 935 075

Fax: +61 1300 729 000

www.asic.gov.au

4 March 2021

Dear Sir / Madam,
ACT OF GRACE APPLICATIONS SUBMITTED BY s22(1)(a)(ii)  – SFSGLOBAL GROUP
PTY LTD
1.
We refer to your request of 11 December 2020 for additional information
concerning applications  for act of grace payments  lodged by the
s22(1)(a)(ii)   in  relation  to  s22(1)(a)(ii)
and  SFSGlobal  Group  Pty  Ltd
(Applications).
2.
In  summary,  ASIC  repeats  its  submissions  of  7  December  2020  and
submits that the Applications do not identify any special circumstances.
As detailed below, ASIC’s conduct in this matter was appropriate and
reasonable in light of the information received by ASIC and the enquiries
it made at the relevant time.
s37(2)(b), s47C, s47E(d)

s37(2)(b), s47C, s47E(d)

Released by the Department of Finance under the Freedom of Information Act 1982
FOI 23-24/160 - Document 08
s37(2)(b), s47C, s47E(d)

Released by the Department of Finance under the Freedom of Information Act 1982
FOI 23-24/160 - Document 08
s37(2)(b), s47C, s47E(d)
33.
We would be happy to discuss the contents of this submission or provide
any further information you consider necessary to resolve the
applications.

Yours faithfully,

Australian Securities and Investments Commission

s37(2)(b), s47C, s47E(d)

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7
ANNEXURE A

Relevant Legislation

Section 911A(1) Corporations Act 2001 (Cth)

Need for an Australian financial services licence

1)  Subject to this section, a person who carries on a financial services
business in this jurisdiction must hold an Australian financial services
licence covering the provision of the financial services.

Section 911B(1) Corporations Act 2001 (Cth)

Providing financial services on behalf of a person who carries on a financial
service business

1)  A person (the provider) must only provide a financial service in this
jurisdiction on behalf of another person (the principal) who carries on
a financial services business if one or more of the following paragraphs
apply:

a)  these conditions are satisfied:
i)
the principal holds an Australian financial services
licence covering the provision of the service; and
ii)
the provider is an employee or director of the
principal or of a related body corporate of the
principal; and
iii)
the provider is not an employee or director, or
authorised representative, of any other person who
carries on a financial services business and who is
not a related body corporate of the principal; and
iv)
the provider is not an employee or director, or
authorised representative, of a related body
corporate of a person of the kind mentioned in
subparagraph (ii );
b)  these conditions are satisfied:
i)
the principal holds an Australian financial services
licence covering the provision of the service; and
ii)
the provider is an authorised representative of the
principal; and
iii)
the authorisation covers the provision of the service
by the provider; and
iv)
in the case of a provider who is an employee or
director of any other person (the second principal)
who carries on a financial services business, or of a
related body corporate of such a second principal--
if the provider provides any financial services in this
jurisdiction on behalf of the second principal, the

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provider does so as an authorised representative of
the second principal;

c)  these conditions are satisfied:
i)
the principal holds an Australian financial services
licence covering the provision of the service; and
ii)
the provider is an employee of an authorised
representative of the principal; and
iii)
the authorisation covers the provision of the service
by the authorised representative; and
iv)
the service is the provision of a basic deposit
product or of a facility for making non-cash
payments (see section 763D) that is related to a
basic deposit product, or is the provision of a
financial product of a kind prescribed by regulations
made for the purposes of this subparagraph;
d)  the provider holds their own Australian financial services
licence covering the provision of the service;

Section 763B Corporations Act 2001 (Cth)

When a person makes a financial investment

For the purposes of this Chapter, a person (the investor) makes a financial
investment if:

a)  the investor gives money or money’s worth (the contribution) to
another person and any of the following apply:
i)
the other person uses the contribution to generate a financial
return, or other benefit, for the investor;
ii)
the investor intends that the other person wil  use the
contribution to generate a financial return, or other benefit, for
the investor (even if no return or benefit is in fact generated);
iii)
the other person intends that the contribution wil  be used to
generate a financial return, or other benefit, for the investor
(even if no return or benefit is in fact generated); and
b)  the investor has no day-to-day control over the use of the
contribution to generate the return or benefit.
Note  Examples of actions that constitute making a financial investment
1:
under this subsection are:

(a) a person paying money to a company for the issue to the person
of shares in the company (the company uses the money to generate
dividends for the person and the person, as a shareholder, does not
have control over the day-to-day affairs of the company); or

(b) a person contributing money to acquire interests in a registered
scheme from the responsible entity of the scheme (the scheme uses
the money to generate financial or other benefits for the person and

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the person, as a member of the scheme, does not have day-to-day
control over the operation of the scheme).

Note  Examples of actions that do not constitute making a financial
2:
investment under this subsection are:

(a) a person purchasing real property or bullion (while the property or
bul ion may generate a return for the person, it is not a return
generated by the use of the purchase money by another person); or

(b) a person giving money to a financial services licensee who is to
use it to purchase shares for the person (while the purchase of the
shares wil  be a financial investment made by the person, the mere
act of giving the money to the licensee wil  not of itself constitute
making a financial investment).

Section 601ED Corporations Act 2001 (Cth)

When a managed investment scheme must be registered

1)  Subject to subsections (2) and (2A), a managed investment scheme
must be registered under section 601EB if:

a)  it has more than 20 members; or
b)  it was promoted by a person, or an associate of a person, who
was, when the scheme was promoted, in the business of
promoting managed investments schemes; or
c)  a determination under subsection (3) is in force in relation to
the scheme and the total number of members of all of the
schemes to which the determination relates exceeds 20.

2) A managed investment scheme does not have to be registered if all
the issues of interests in the scheme that have been made would not
have required the giving of a Product Disclosure Statement under
Division 2 of Part 7.9 if the scheme had been registered when the issues
were made.

3) ASIC may, in writing, determine that a number of managed investment
schemes are closely related and that each of them has to be
registered at any time when the total number of members of all of the
schemes exceeds 20. ASIC must give written notice of the
determination to the operator of each of the schemes.

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Section 1012E Corporations Act 2001 (Cth)

Small scale offerings of managed investment and other prescribed financial
products (20 issues or sales in 12 months)

1)  This section applies only to financial products that are:

a)  managed investment products; or
b)  financial products of a kind prescribed by regulations

2)  Personal offers of financial products do not need a Product Disclosure
Statement under this Part if:

a)  all of the financial products are issued by the same person (the
issuer); and
b)  none of the offers results in a breach of the 20 purchasers ceiling
(see subsections (6) and (7)); and
c)  none of the offers results in a breach of the $2 mil ion ceiling (see
subsections (6) and (7)).