The Parliamentary Joint Committee on Corporations and Financial Services has commenced an inquiry into the wholesale investor test for offers of securities (Section 708 of Chapter 6D of the Corporations Act 2001) and the wholesale client test for financial products and services (Sections 761G and 761GA of Chapter 7 of the Act).

The Terms of Reference include:

1. review of the current wholesale investor/client tests, including legal requirements, identification of all contexts in which the tests are relevant, the consequences of an investor/client meeting the relevant test, and the application of the tests in practice;

2. consideration of any proposals to change the wholesale investor/client tests, including: any evidence to support such proposals, the possible consequences (both intended and unintended) of any change to the wholesale investor/client tests, the costs and benefits of any change, the impact of any change on different cohorts of investor/client and other stakeholders;

3. any potential adjustments to proposals to change the wholesale investor/client tests to address the concerns of stakeholders.

The committee intends to report to the Parliament by the end of 2024.

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