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Rules of Practice 1994 (S.R. 1994, No. 229)
|Requested: 25 Jun 2017|
|Consolidated as at: 17 Mar 2006|
71. Investments by controlled fund operators
(1) A controlled fund operator must not
(a) invest money for investment other than
(i) with an approved institution; or
(ii) in a first mortgage or second mortgage; or
(iii) in a loan to a short-term money market dealer in accordance with the conditions specified in section 5(1)(h) of the Trustee Act 1898; or
(b) pledge or charge money for investment or securities held by the controlled fund operator.
(2) Subrule (1)(a) does not apply to
(a) money invested by a controlled fund operator and secured by mortgage securities before 31 December 1994; or
(b) money invested in substitution for any money referred to in paragraph (a).
(3) A controlled fund operator may take or acquire additional collateral security in respect of a loan that is secured by a first mortgage or second mortgage.
(4) A controlled fund operator must not accept money for investment unless, at or before the time the money is accepted, the investor is given a notice in writing signed
(a) by or on behalf of the firm; or
(b) if the firm is not the controlled fund operator, by or on behalf of the controlled fund operator.
(5) A notice is to specify
(a) the amount or identity of the money; and
(b) the nature of the securities in which the money may be invested; and
(c) how the rate of interest payable to the investor is to be determined and any condition under which the interest is payable; and
(d) the expenses to be paid by the investor; and
(e) the conditions under which the investor is entitled
(i) to redeem the money; or
(ii) in the case of a contributory mortgage, to a transfer of the security in which the money is invested; or
(iii) in the case of any other security, to a transfer of a security equivalent in value to the money.