ASIC Corporations (Time-sharing Schemes) Instrument 2017/272

This is the ASIC Corporations (Time-sharing Schemes) Instrument 2017/272.

This instrument is made under subsections 601QA(1), 926A(2) and 1020F(1) of the Corporations Act 2001.

Act means the Corporations Act 2001.

approved hardship member has the meaning given by subsection 601GA(1B) of the Act as notionally inserted by this instrument.

defaulting member has the meaning given by subsection 601GA(1B) of the Act as notionally inserted by this instrument.

registered time-sharing scheme means a time-sharing scheme:

registered in accordance with section 601ED of the Act; and

that has not at any time been promoted by its operator as a means of generating a financial return other than by way of a rental pool.

Regulations means Corporations Regulations 2001.

rental pool, in relation to a time-sharing scheme, means an arrangement conducted by the operator of the scheme where members of the scheme authorise the operator to manage and rent to third parties the rights to use property under the scheme and to pool the rental income received for pro-rata distribution to each holder.

Part 2-Exemptions

A responsible entity of a registered time-sharing scheme does not have to comply with paragraph 601FG(1)(a) of the Act in relation to the acquisition and holding by the responsible entity of an interest in the scheme that is forfeited by a defaulting member to the responsible entity if:

the constitution of the scheme contains provisions that are to the effect of paragraphs 601GA(1A)(a) to (l) of the Act (as notionally inserted by this instrument); and

the acquisition and holding is in accordance with those provisions.

A responsible entity of a registered time-sharing scheme does not have to comply with paragraph 601FC(1)(d) of the Act to the extent the requirement to treat members in the same class equally would prevent the responsible entity from allowing an approved hardship member to withdraw in accordance with provisions of the constitution of the scheme that are to the effect of paragraphs 601GA(1A)(b) to (l) of the Act as notionally inserted by this instrument.

The responsible entity of a registered time-sharing scheme does not have to comply with paragraph 601FC(1)(j) of the Act in relation to the scheme.

Condition

A responsible entity that relies on the exemption in subsection (1) must ensure that an item of scheme property of the scheme is valued as soon as practicable after the responsible entity has reasonable grounds to believe that a valuation of the item is in the best interests of members or is needed for the scheme to operate in a manner that is fair to all members.

A responsible entity that has not complied with the condition in subsection (2) cannot rely on the exemption in subsection (1).

Part 3-Declarations

Chapter 5C of the Act applies to a responsible entity of a registered time-sharing scheme as if section 601GA were modified or varied as follows:

in subsection (1), omit "The", substitute "Subject to subsection (1A), the";

after subsection (1) insert:

"(1A) The constitution of a registered time-sharing scheme need not make adequate provision for the consideration that is to be paid to acquire an interest in the scheme if the constitution contains provisions to the effect of the following:

Acquisition price

the consideration that is to be paid to acquire an interest in the scheme is:

the price stated in the Product Disclosure Statement for the interests that is in use at the time of the acquisition; or

in relation to the sale of an interest of a defaulting member or approved hardship member by the responsible entity under a power of sale or due to forfeiture to the responsible entity-a price specified in paragraph (k);

Hardship withdrawals

a member may give the responsible entity a hardship application, provided that if the responsible entity has received a hardship application (previous hardship application) from the member within the previous 3 months and has considered the previous hardship application:

the responsible entity has a discretion whether or not to consider the current hardship application;

if the responsible entity decides not to consider the current hardship application:

the responsible entity must notify the member in writing as soon as possible of its decision; and

paragraphs (c) to (l) do not apply in relation to the hardship application;

if the responsible entity receives a hardship application, the responsible entity:

must, as soon as possible after receipt of the hardship application, give the member a written confirmation that the hardship application has been received; and

must consider whether further information is required to determine whether the member has met the hardship criteria and, if so, give a notice to the member by no later than 30 days after the day the responsible entity receives the hardship application:

requiring further information; and

allowing the member at least 21 days to respond; and

must, before the end of the decision period, make a decision whether the member has met the hardship criteria and, if so, whether to allow the member to withdraw from the scheme; and

Note 1: If the responsible entity allows the member to withdraw from the scheme, the member will be an approved hardship member: see subsection (1B).

Note 2: See section 601GAH in relation to the discretion of the responsible entity to allow a member to withdraw from the scheme.

must give the member a decision notice within 7 days of making the decision; and

unless the responsible entity has given the member a decision notice, must not require the member to make payment of any amounts due for payment on or after the date the responsible entity received the member's hardship application; and

may, to the extent provided for in the constitution and until the responsible entity gives the member a decision notice, suspend the rights of the member to use property under the scheme, receive distributions under the scheme or otherwise enjoy benefits produced by the scheme;

if the responsible entity decides a member has not met the hardship criteria, the decision notice must include:

reasons why the responsible entity has decided that the member has not met the hardship criteria; and

an explanation that, as the member has not met the hardship criteria, the member is not able to withdraw from the scheme;

details of the scheme's internal and external dispute resolution schemes;

if the responsible entity decides a member has met the hardship criteria but not to allow the member to withdraw from the scheme, the decision notice must include:

reasons why the responsible entity has decided not to allow the member to withdraw from the scheme; and

details of the internal and external dispute resolution schemes;

an approved hardship member:

has a right to withdraw from the scheme in accordance with paragraph (h); and

has no liability to make payment of any amounts due for payment in relation to the scheme on or after the date the responsible entity received the member's hardship application (including payment of any shortfall from the sale process referred to in paragraph (k)) ; and

if the approved hardship member was a defaulting member, has no liability to make payment of any amounts that are overdue for payment;

the responsible entity may, to the extent provided for in the constitution, suspend the rights of an approved hardship member to use property under the scheme, receive distributions under the scheme or otherwise enjoy benefits produced by the scheme;

Forfeiture and sale circumstances

subject to paragraphs (i) to (l), the responsible entity may, in accordance with the constitution, forfeit the interest of a defaulting member to the responsible entity, or exercise a power of sale of a defaulting member's interest on behalf of a defaulting member;

if the responsible entity receives a hardship application from a defaulting member, the responsible entity must not forfeit or exercise a power of sale of the interests of that member unless the responsible entity has:

decided to reject the member's hardship application; and

given the member a decision notice within the time required under subparagraph (c)(iv);

Sale process for defaulting member and approved hardship member

the responsible entity must use reasonable endeavours to sell:

the interest of a defaulting member if the interest has been forfeited to the responsible entity or if the responsible entity has decided to exercise a power of sale of the interest on behalf of the defaulting member; and

the interest of an approved hardship member;

the price for which the responsible entity sells the interest of a defaulting member or an approved hardship member must be:

if a Product Disclosure Statement has been given in accordance with Part 7.9 at any time in the 12 months before the sale for interests in the scheme that are in the same class-the price shown in the Product Disclosure Statement most recently given; or

otherwise-a fair market price obtained by the responsible entity using reasonable endeavours;

the responsible entity must apply any proceeds of sale of a defaulting member or approved hardship member, or of other exploitation by it of the interest of the defaulting member or approved hardship member (including any proceeds of rental of, or licensing to use, the scheme property that relates to the interest of the member) in the following order:

in payment of reasonable costs of the sale or exploitation;

in payment of any reasonable administrative costs arising from the forfeiture, sale or withdrawal;

in payment of any outstanding amounts due from the member as scheme property:

for a defaulting member-that were outstanding as at the date the interest is sold; or

for an approved hardship member-that were outstanding as at the date the responsible entity received the member's hardship application;

in payment of any amounts that were overdue for payment by the member to the responsible entity other than as scheme property, or that were overdue for payment to any other person in relation to the member's participation in the scheme on:

for a defaulting member-the date the interest is sold; or

for an approved hardship member-the date the responsible entity received the member's hardship application;

in payment of any amounts payable by or on behalf of the defaulting member or approved hardship member to a person in relation to a liability of the member to the person for amounts with respect to financial accommodation provided by the person in connection with the member's acquisition of the interest;

in payment of any remaining amount to the defaulting member or approved hardship member.

Interpretation

For the purposes of subsections (1A) to (1C):

approved hardship member means a member of a registered time-sharing scheme who has received a decision notice from the responsible entity stating that the responsible entity has approved the member's hardship application.

decision notice means a written notice of the responsible entity's decision in relation to a hardship application.

decision period means, in relation to a hardship application, for each circumstance set out in column 2 of the following table, the period set out in column 3.

Decision period for giving a decision notice

Item Column 2 circumstance Column 3 decision period

1 The responsible entity does not require further information to make a decision. 30 days starting on the day the responsible entity receives the hardship application

2 The responsible entity requires further information, gives a notice requiring further information by a specified date, and does not receive the information from the member by that specified date. 30 days starting on the specified date

3 The responsible entity requires further information, gives a notice requiring further information by a specified date, and receives the further information on or before the date. 30 days starting on the day the responsible entity receives the further information defaulting member means a member of a registered time-sharing scheme:

whose interest may be forfeited to the responsible entity under the constitution; or

on whose behalf the responsible entity may sell the interest of the member under the constitution;

as a result of a failure by the member to remedy the non-payment of an amount due to:

the responsible entity as scheme property, including, amounts payable to acquire the interest or a levy; or

a person with respect to financial accommodation provided to the member in connection with the acquisition by the member of the interest;

provided that a member who is an approved hardship member is not a defaulting member even if paragraph (c) or (d) is satisfied in relation to the member.

hardship application means an application by a member (or in the case of joint memberships, both members) of a registered time-sharing scheme, made to the responsible entity of the scheme, in writing, to withdraw from the scheme because the member meets the hardship criteria.

hardship criteria: see subsection (1C).

levy, in relation to a registered time-sharing scheme, means an amount paid or payable by members of a scheme for any of the following:

the maintenance of scheme property;

operating the scheme;

other services relating to the scheme.

registered medical practitioner means a medical practitioner on the public register of practitioners maintained by the Australian Health Practitioner Regulation Agency or any successor agency.

registered time-sharing scheme means a time-sharing scheme:

registered in accordance with section 601ED; and that has not at any time been promoted by its operator as a means of generating a financial return other than by way of a rental pool.

For the purposes of subsections (1A) to (1C), a member of a registered scheme meets the hardship criteria if:

any of the hardship criteria specified in column 3 of the following table are satisfied in relation to the member (or in the case of joint memberships, any one member); and

as a consequence, the member (or in the case of joint memberships, any one member) is unlikely to be able to use their interest in the scheme for the remainder of their membership.

Item Column 2 hardship category Column 3 hardship criteria

1

Severe Financial Hardship The member or the member's dependant is suffering severe long-term or permanent financial hardship.

2 Compassionate Grounds The member or dependent is suffering a life-threatening illness or injury, chronic pain, or a severe, long-term chronic mental disturbance where a registered medical practitioner has provided a certified statement confirming the medical condition is of this nature.

3 Permanent Incapacity The member has ceased gainful employment by reason of mental or physical ill-health and the member is unlikely ever again to engage in gainful employment of the type for which the member is reasonably qualified by education, training or experience.

Chapter 5C of the Act applies to a responsible entity of a registered time-sharing scheme as if the provisions of that Chapter were varied or modified as follows:

insert the following section in its relative order in Part 5C.3:

"601GAH Discretions in relation to hardship withdrawals

Despite subsection 601GA(4), the constitution of a registered time-sharing scheme (as defined in subsection 601GA(1B)) does not have to set out adequate procedures for making and dealing with withdrawal requests to the extent that the constitution gives the responsible entity a discretion to decide whether to allow or refuse a withdrawal request to which the following apply:

the withdrawal request is in relation to a hardship application (as defined in subsection 601GA(1B)) in accordance with provisions of the constitution to the effect of paragraphs 601GA(1A)(b) to (l);

the requirements set out in the constitution for allowing a withdrawal as a result of the hardship application are otherwise satisfied.

Exercise of discretion must be reasonable

The responsible entity must act reasonably in exercising a discretion covered by subsection (1).

Note: The responsible entity is also subject to its general duties under section 60IFC including the duty to act in the best interests of the members of the scheme."

The responsible entity must ensure that it keeps records which document how and why a decision exercising a discretion covered by subsection (1) was made for a period of 7 years.";

before subsection 601KA(3A) insert:

"(3AB) Subsection (3) and sections 601KB to 601KE do not apply to a withdrawal in accordance with provisions of the constitution of a registered time-sharing scheme (as defined in subsection 601GA(1B)) to the effect of paragraphs 601GA(1A)(b) to (l).".

Chapter 5C of the Act applies to a responsible entity of a registered time-sharing scheme as if paragraph 601HA(1)(c) were modified or varied by after "valued" inserting "in accordance with the conditions of any exemption under paragraph 601QA(1)(a) that exempts the responsible entity from paragraph 601FC(1)(j) or, if the responsible entity is not covered by such an exemption,".

Note: Subsection 6(1) is an exemption of this kind.

Chapter 5C of the Act applies to a responsible entity of a registered time-sharing scheme as if Part 5C.3 were modified or varied by:

before subsection 601GC(2) inserting:

"(1B) The constitution of a registered time-sharing scheme (as defined in ASIC Corporations (Time-sharing Schemes) Instrument 2017/272) may also be modified, or repealed and replaced with a new constitution, by the responsible entity in accordance with section 601GCD."; and

inserting the following section in its relative order in Part 5C.3:

"601GCD Changing the constitution of a registered time-sharing scheme to enable hardship withdrawals

Subject to subsection (2), the responsible entity of a registered time-sharing scheme (as defined in ASIC Corporations (Time-sharing Schemes) Instrument 2017/272) may modify the constitution of the scheme to:

include provisions to the effect of paragraphs 601GA(1A)(a) to (l) (as notionally inserted, or to be notionally inserted, as a result of ASIC Corporations (Amendment) Instrument 2020/1064); and

make any other modifications that the responsible entity reasonably considers are necessary for, or incidental to, the responsible entity including provisions to the effect of paragraphs 601GA(1A)(a) to (l).

The responsible entity may modify the constitution under subsection (1) where:

the responsible entity has given members of the scheme written notice of the modification by sending each member by post or by email a copy of a notice that complies with subsection (3); and

the responsible entity has published a notice that complies with subsection (3) on its website:

no later than the date it gives written notice under paragraph (a); and in a way that is likely to come to the attention of a person looking for information about the scheme on the website; and

as at a date (relevant date) that is:

no later than the date it gives written notice under paragraph (a) and (b); and

at least 14 days after the responsible entity gives notice to members under paragraph (a);

the responsible entity has not received requests from members with at least 5% of the votes that may be cast on the resolution referred to in paragraph (3)(b) to call and arrange to hold a meeting as specified in the notice.

A notice complies with this subsection if it:

sets out a summary of the reason for, and the effect of, the proposed modification of the constitution; and states that the responsible entity will modify the constitution as proposed unless it receives requests to call and arrange to hold a meeting of the scheme's members to consider and vote on a special resolution to modify the constitution as proposed:

from members with at least 5% of the votes that may be cast on the resolution; and by the relevant date; and states that a request referred to in paragraph (b) must be made in writing and may be sent to a specified email address of the responsible entity; and is worded and presented in a clear, concise and effective manner.

Unless the scheme's constitution provides otherwise, a notice sent by post is taken to be given 3 days after it is posted. A notice sent by email is taken to be given on the business day after it is sent.

The responsible entity may repeal and replace the constitution instead of modifying it where:

the replacement constitution has the effect that the constitution would have had if it had instead been modified in accordance with subsection (1); and subsection (2) had been satisfied as if references in subsections (2) and (3) to modifying the constitution included references to repealing and replacing it.

The responsible entity may modify or repeal and replace the constitution under subsections (1) and (5) even if the constitution includes provisions to the effect that it may only be modified or repealed and replaced in accordance with paragraphs 601GC(1)(a) or (b) or provisions to the effect of those paragraphs.

If the responsible entity:

decides not to give members written notice (modification notice) under paragraph (2)(a) or under subsection (5) as it applies in relation to paragraph (2)(a); or

does not give members a modification notice by 30 September 2021;

the responsible entity must give each member by post or by email written notice that complies with subsection (8) by no later than:

if paragraph (a) applies-21 days after making the decision; and

if paragraph (b) applies-21 October 2021.

A notice complies with this subsection if it includes an explanation of the following:

why the responsible entity has decided not to give, or has not given, members a modification notice; and

the effect for members of the responsible entity not giving members a modification notice compared to the situation if the responsible entity had given a modification notice; and

that under section 252D, members holding interests carrying at least 5% of the votes that may be cast at a meeting of scheme may call and arrange to hold a meeting of the scheme's members to consider and vote on a special resolution to modify or repeal and replace the constitution the constitution to include provisions to the effect of paragraphs 601GA(1A)(a) to (l) at the expense of those members.

Note: The responsible entity must act in the best interests of the members in exercising the power in subsections (1) and (5) to modify, or repeal and replace the constitution: see paragraph 601FC(1)(c).".

Part 7.6 (other than Divisions 4 and 8) of the Act applies to a financial services licensee as if it were modified or varied by inserting the following sections in their relative order in Division 3 of Part 7.6:

"912AJ Requirements for the provision of time-sharing interests

Application

Subsections (3) to (19) apply to a licensee that is the responsible entity of a registered time-sharing scheme.

Subsections (3) to (9) also apply to a licensee that is an associate of a responsible entity of a registered time-sharing scheme if the licensee:

holds an Australian financial services licence authorising it to advise and deal in interests in a registered time-sharing scheme; and

provides financial product advice to consumers about interests in a registered time-sharing scheme.

A licensee must ensure each application form relating to an offer of interests for issue or sale by the licensee in the registered time-sharing scheme:

is accompanied by a separate written statement (cooling-off statement) in the form set out in subsection 912AK(1); and

is accompanied by the Product Disclosure Statement in relation to the interests if:

in any case-a Product Disclosure Statement is required to be given to the applicant in relation to the offer under Part 7.9; or

in the case of an offer for sale-a Product Disclosure Statement would have been required to be given under Part 7.9 if the offer had been an offer for issue; and

contains a question about whether the applicant intends to seek finance to pay for the interest in the time-sharing scheme and a description of an applicant's subject to finance right to withdraw under paragraph (10)(b), and how those rights may be exercised; and

is accompanied by a separate written notice (subject to finance notice) in the form set out in subsection 912AK(2).

A licensee must not require an applicant to accept any finance offered to the applicant.

A licensee must take reasonable steps to ensure an applicant is given a spoken warning (verbal consumer warning) consisting of the words set out in subsection 912AK(4) if the applicant is present during any seminar or sales presentation (whether conducted in person or by telephone or electronic communication) relating to the registered time-sharing scheme and which involves the licensee or any of its representatives.

A licensee must not issue or sell an interest in a registered time-sharing scheme to an applicant, or allow any of its associates to do so, unless the applicant has provided the responsible entity of the scheme with the applicant's signed and dated:

acknowledgement of receipt of the cooling-off statement; and acknowledgement of receipt of the subject to finance notice.

A licensee must maintain written records of the following for a period of 7 years:

the name of each applicant the licensee gives a cooling-off statement to;

the date the licensee gives a cooling-off statement to an applicant;

each signed and dated acknowledgement of receipt of the cooling-off statement provided to the licensee by an applicant.

A licensee that receives an application for an interest in a registered time-sharing scheme from an applicant must give the applicant copies of the following documents for the applicant to keep by the day referred to in subsection (9):

the applicant's signed and dated application form;

a copy of the Product Disclosure Statement, if it is given under subparagraph (3)(b)(i);

if there is no Product Disclosure Statement for the interests in use before a person acquires an interest in the scheme-the information referred to in subparagraph (13)(b) in writing;

the applicant's signed and dated acknowledgement of receipt of:

the cooling off statement; and

the subject to finance notice.

The day by which a licensee must give the documents referred to in subsection (8) to an applicant is:

if the applicant has given the application to the licensee in person-the day on which the licensee receives the application; and

otherwise-the next business day after the day the licensee receives the application.

Cooling-off rights and subject to finance rights

A licensee that is the responsible entity of a registered time-sharing scheme must confer on an applicant for the issue or sale of an interest in the scheme from the licensee or an associate referred to in subsection (2) a right to withdraw an application made by the applicant and a right to return the interest in the scheme (if applicable), if the applicant notifies the licensee by post, email or facsimile or in any manner described in the Product Disclosure Statement for interests in the scheme that:

(cooling-off rights) the applicant does not wish to proceed with the issue or sale of the interest, and the notification is made within the period (cooling-off period) commencing on the date on which the applicant signs the acknowledgement of receipt of the cooling-off statement and ending:

if the licensee is a member of the Australian Timeshare & Holiday Ownership Council Limited ACN 065 260 095-no less than 7 days later; or

otherwise-no less than 14 days later; or

(subject to finance rights) the applicant:

failed to obtain finance; or

decided not to proceed with an application for finance; or

rejected an offer of finance.

Effect of the exercise of cooling-off rights and subject to finance rights by an applicant

A licensee that is the responsible entity of a registered time-sharing scheme must make adequate arrangements to ensure that where an applicant exercises cooling-off rights during the cooling-off period or exercises subject to finance rights:

subject to paragraph (c), any contract for the acquisition of the interest in the time-sharing scheme is terminated without financial penalty to the applicant; and

subject to paragraph (c), if the interest in the time-sharing scheme is constituted by a legal relationship between the applicant and the licensee-that relationship is terminated without financial penalty to the applicant; and

if the applicant exercises rights by giving a notification referred to in subsection (10), the applicant is entitled to be refunded by the licensee:

all monies paid by the applicant to the licensee in relation to the issue or sale of the interest in the scheme; and

the amount of any finance application fee paid to a related finance provider, less the reasonable value of the services supplied by the related finance provider up to the date the application was withdrawn or the interest was returned.

A licensee that is the responsible entity of a registered time-sharing scheme must ensure the cooling-off rights and subject to finance rights are disclosed prominently in any Product Disclosure Statement for the offer of interests in the scheme.

A licensee that is the responsible entity of a registered time-sharing scheme must ensure:

any Product Disclosure Statement for interests in the scheme and any website that is maintained by or on behalf of the responsible entity for the scheme, explains:

if the constitution for the scheme contains provisions to the effect of paragraphs 601GA(1A)(b) to (l) as notionally inserted by ASIC Corporations (Time-sharing Schemes) Instrument 2017/272:

that a member may lodge a hardship application requesting to withdraw from the scheme due to hardship;

the hardship criteria and the procedures set out in paragraphs 601GA(1A)(b) to (l); and

if the constitution does not contain provisions to the effect of paragraphs 601GA(1A)(a) to (l)-the reason why the constitution has not been modified to include such provisions;

if applicable, that the responsible entity may forfeit a member's interest or exercise a power of sale on behalf of a defaulting member;

if applicable, the responsible entity's procedures for forfeiting a member's interest or exercising a power of sale on behalf of a defaulting member; and

before an applicant acquires an interest in the scheme from the responsible entity or an associate at a time when no Product Disclosure Statement for the interests is in use-the person has been given the information referred to in paragraph (a) in writing.

Written consumer warning and prominent summary of key features in the Product Disclosure Statement

A licensee that is the responsible entity of a registered time-sharing scheme must ensure that any Product Disclosure Statement for an interest in the scheme contains:

on the front cover, a boxed warning (written consumer warning) in the form set out in subsection 912AK(3);

on or before page 7 of the Product Disclosure Statement (counting the cover of the Product Disclosure Statement as page 1 of the Product Disclosure Statement), the following information:

the membership term applicable to membership of the scheme;

any criteria used by the responsible entity to identify persons the responsible entity considers most likely to be:

suited to the scheme; and interested in acquiring an interest in the scheme through its sales presentations (if applicable);

a description of the restrictions on the ability of members to cease holding an interest if they no longer want to hold an interest;

a statement to the effect that a member should have no expectation of being able to sell the membership on any market or get any money back;

a description of the cooling-off period, the subject to finance rights, and the cooling-off rights;

a description of the key limitations on access to accommodation (such as seasonality or other factors);

a summary of the fees and costs involved in acquiring and holding an interest that contains a cross-reference to where further information about those fees and costs can be found in the Product Disclosure Statement;

for schemes with a points-based program-a summary of how the program works and a cross-reference to where further information about the operation of the program can be found in the Product Disclosure Statement.

Licensee must notify of non-compliance

If a licensee that is the responsible entity of a registered time-sharing scheme becomes aware that it, or any of its associates, has failed to comply with any of subsections (3), (application accompanied by a cooling-off statement and subject to finance notice), (5) (verbal consumer warning), (6) (signed and dated documents received from applicant), and (8) (give applicant copies of specified documents) in relation to the issue or sale of an interest in a time-sharing scheme to an applicant by the licensee, the licensee must immediately give a written notice to the applicant that:

describes the failure to comply; and

the applicant may give the licensee a written notice by post or by any manner described in the Product Disclosure Statement within 21 days of the date of the licensee's notice to the applicant of its failure to comply; and

specifies that if the applicant gives the licensee a notice referred to in paragraph (b):

the applicant will be entitled to a refund from the licensee within 14 days of the notice of all amounts paid in relation to the interest in the scheme and any application for finance from a related finance provider (less the reasonable value of the services supplied by the related finance provider up to the date of termination of any contract between the applicant the credit provider and less any amount paid to the applicant under a provision of the constitution of the scheme to the effect of subparagraph 601GA(1A)(l)(vi)); and

any contract (other than the constitution of the scheme) between the applicant and licensee in relation to the interest in the time-sharing scheme will be void; and

the interest in the scheme will be returned to the responsible entity.

Charges and levies

A licensee that is the responsible entity of a registered time-sharing scheme must:

pay and ensure that any of its associates pay the same continuing charges and levies (such as maintenance levies and special levies) as a member would be required to pay in relation to the same interest held in that scheme; and

provide to each member, for each period that the member is charged levies:

a notice of the levies payable by the member for the period; and

a copy of the budget which relates to that period.

A licensee that is the responsible entity of a registered time-sharing scheme may give either or both of the documents referred to in subparagraphs (16)(b)(i) and (ii) by:

publishing the document on the responsible entity's website; and

notifying a member of the website publication using:

a method of communication for the notification the member has consented to; or

any means a member has consented to for communication of the document.

Application monies for an interest in a scheme relating to property development

A licensee that is the responsible entity of a property development scheme must:

ensure that all deposit money it receives from an applicant is deposited with an Australian ADI in an account that is held on trust for the applicant, not later than the business day following receipt and is not applied in any manner other than by payment to another such account until:

a registrable dealing conferring title on the applicant to any real property in relation to the scheme and in relation to the interests being acquired by the applicant is lodged with the relevant authority responsible for receiving lodgements relating to real property titles; and

the construction of the property to which the interests being acquired by the applicant relates, and any improvements necessary to permit normal use of the property under the scheme, is substantially completed; and

if the licensee becomes aware that:

a registrable dealing conferring title on the applicant to any real property in relation to the scheme and in relation to the interests being acquired by an applicant is not lodged with the relevant authority by the date specified in the Product Disclosure Statement; or

the construction of the property and improvements is not substantially completed by the date specified in the Product Disclosure Statement;

return to the applicant the following:

any deposit money paid by the applicant;

any income earned on the deposit money (less deductions of any fees and disbursements properly chargeable against the income);

any amounts paid under a contract with a related finance provider; and

ensure that any amount it requires to be paid by an applicant for the acquisition of an interest in the scheme (including any amount paid under a contract with a related finance provider) is no more than 30% in value of the price payable for the interest, if the property development or part of the property development has not been completed to the stage at which it is ready for occupation.

Points-based programs

A licensee that is the responsible entity of a registered time-sharing scheme that operates a points-based program must:

ensure that issues of interests in the scheme only occur where the responsible entity is satisfied on reasonable grounds that existing members of the scheme (if any) will continue to have access to the benefits of the scheme that they would reasonably expect to have based on:

the Product Disclosure Statements for an interest in the scheme that were in use at the times the interests were acquired by the existing members; and

advertisements and promotional material for an interest in the scheme that were in use at the times the existing member acquired interests in the scheme; and

establish and maintain compliance measures that ensure, as far as is reasonably practical, that:

for an allocation points-based program:

the pricing of the points issued to members is in accordance with the scheme's constitution and the Product Disclosure Statement for an interest in the scheme; and

the total number of points issued to members for scheme accommodation is in accordance with the scheme's constitution; and

the allocation of periodic points to each member occurs in accordance with the scheme's constitution and the relevant Product Disclosure Statement.

for a PAYG points-based program:

the price paid for interests (including in relation to PAYG points) is in accordance with the scheme's constitution and the Product Disclosure Statement for an interest in the scheme; and

the total number of PAYG points issued to members is in accordance with the scheme's constitution; and

PAYG points are redeemed for the use of scheme property at the time the points are purchased.

Deemed compliance with licence conditions

A licensee referred to in subsection (1) or (2) that complies with the subsections specified in column 2 of the table below has the effect specified in column 3 of the table.

Deemed compliance with licence conditions

Item Column 2

A licensee who complies with: Column 3 is taken to comply with any condition to which its licence is subject dealing with:

Interpretation

In this section:

allocation points-based program, in relation to a registered time-sharing scheme, means a points-based program where a person:

becomes a member of the scheme by purchasing a specified number of points; and

as a member of the scheme, is entitled to be issued with a recurrent right to use scheme property in the form of a periodic allotment of points for:

the duration of the scheme; or a specified term of not less than 3 years.

applicant, in relation to a registered time-sharing scheme, means an applicant for an interest in the scheme, whether by issue or sale.

associate, in relation to a responsible entity of a registered time-sharing scheme, has the meaning given by section 11, but excludes a natural person who satisfies all of the following:

the person holds an interest in the scheme;

the person has notified the responsible entity that the person holds the interest for their own personal use;

the responsible entity has reasonable grounds to believe the person holds the interests for their own personal use.

budget means the estimated and itemised material expected income and expenditure for a scheme for a financial year or calendar year.

cooling-off statement: see paragraph (3)(a).

cooling-off rights means the rights referred to in paragraph (10)(a).

hardship application has the same meaning as in subsection 601GA(1B) (as notionally inserted by ASIC Corporations (Time-sharing Schemes) Instrument 2017/272).

hardship criteria has the same meaning as in subsection 601GA(1C) (as notionally inserted by ASIC Corporations (Time-sharing Schemes) Instrument 2017/272).

PAYG membership, in relation to a registered time-sharing scheme, means a membership in a PAYG points-based program.

PAYG points, in relation to a registered time-sharing scheme, means pay-as-you-go points that:

may only be purchased by a member of a PAYG points-based program; and may be used by the member to obtain the right to use property to which the scheme relates at the time the points are purchased.

PAYG points-based program, in relation to a registered time-sharing scheme, means a points-based program where a person:

becomes a member of the scheme by purchasing a PAYG membership for a specified term of not less than 3 years; and as a PAYG member of the scheme is entitled to purchase PAYG points for the duration of that term.

point, in relation to a registered time-sharing scheme, means a unit of measurement of the amount payable for the use of property to which the scheme relates.

points-based program, in relation to a registered time-sharing scheme, means a program where members of the scheme can use points to obtain the right to use property to which the scheme relates.

property development scheme means a registered time-sharing scheme where, at the time an application is received for an interest in the scheme where that interest relates to a property under construction, the relevant property has not been completed to a stage where it is ready for occupation.

registered time-sharing scheme means a time-sharing scheme:

registered in accordance with section 601ED; and

that has not at any time been promoted by its operator as a means of generating a financial return other than by way of a rental pool.

related finance provider means a person who:

is an associate of the responsible entity of a registered time-sharing scheme; and

provides loans for the purchase of interests in the scheme.

rental pool, in relation to a time-sharing scheme, means an arrangement conducted by the operator of the scheme where members of the scheme authorise the operator to manage and rent to third parties the rights to use property under the scheme and to pool the rental income received for pro-rata distribution to each holder.

subject to finance notice: see paragraph (3)(d).

subject to finance rights means the rights referred to in paragraph (10)(b).