564FProfit share agency arrangements

1

This section applies to arrangements if under them—

a

a person (“the principal”) appoints an agent,

b

one or both of the principal and agent is a financial institution,

c

the agent uses money provided by the principal with a view to producing a profit,

d

the principal is entitled, to a specified extent, to profits resulting from the use of the money,

e

the agent is entitled to any additional profits resulting from its use (and may also be entitled to a fee paid by the principal), and

f

payments made because of the principal’s entitlement to profits equate, in substance, to the return on an investment of money at interest.

2

This section is subject to section 564H (provision not at arm’s length: exclusion of arrangements from sections 564C to 564E, this section and section 564G).