cover image: 4540 - S - Wholesale investor and wholesale client tests


4540 - S - Wholesale investor and wholesale client tests

13 Jun 2024

Wholesale investor and wholesale client tests 6 (c) all of the following apply: (i) the offer is made through a financial services licensee; (ii) the licensee is satisfied on reasonable grounds that the person to whom the offer is made has previous experience in investing in securities that allows them to assess the following matters: (A) the merits of the offer; (B) the value of the securities; (. [...] The Taxation Committee submits that while tax considerations should not directly influence the outcome of the Inquiry, it is important to understand the impact of changes to the tests on the tax status of trusts for meeting the AMIT conditions under Division 276 of the ITAA. [...] The Superannuation Committee has concerns about the application of the wholesale client test where the client is the trustee of a superannuation fund—both where financial product products are issued to the trustee of a superannuation fund (for example, a self-managed superannuation fund (SMSF) invests in a managed fund or a platform) and where financial product advice is provided to the trustee of. [...] In January 2011, in the context of the aftermath of the global financial crisis (GFC) and consideration of the Future of Financial Advice reforms, Treasury issued an Options Paper setting out options for the reform of the wholesale client test.31 The paper noted problems identified during the GFC, including the losses by local councils that had qualified under the wholesale client test but lacked. [...] There are currently inconsistencies in the use of defined terms in the Corporations Act and the ASIC Act, including: (a) the definition of ‘small business’ in Chapter 7 is different to the definition used in the ASIC Act’s UCT provisions under Subdivision BA of Division 2 of Part 2 of the ASIC Act (which means that a business could be a ‘small business’ for the purposes of one piece of legislation.


John Farrell

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