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Rules of Practice 1994 (S.R. 1994, No. 229)
Requested:  28 Jun 2017
Consolidated as at:  17 Mar 2006

73. Liability of members of related firms

(1) If a fund operator is a controlled fund operator, each member of the related firm is responsible for any act of the controlled fund operator done while the member is a member of the related firm as if it were an act of a member of the related firm.
(2) A person who is a member of a firm is liable for any act of a fund operator done while that person is a member of the firm in so far as that act arises from –

(a) a business transaction of the fund operator carried on from within the office of the firm; or

(b) a business transaction in which the fund operator was represented by a member or agent of the firm.

(3) The members of a related firm who are, or have been, members or directors of a controlled fund operator at the time any loss of money is incurred are jointly and severally liable as guarantors to any investor for –

(a) the repayment of money for investment placed by or on behalf of that investor with that controlled fund operator; and

(b) for the payment of the interest due on that money for investment.

(4) Subrule (3) does not apply to money that is –

(a) advanced on a contributory mortgage; or

(b) invested with an approved institution; or

(c) invested in a loan to a short term money market dealer.

(5) The liability of a member of a related firm under subrule (3) –

(a) is not extinguished by the death of that member; and

(b) ceases at the expiration of 3 years after the date on which that member ceases to be a member of the firm or a director of the fund operator.


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CURRENT VIEW: 31 Dec 1994 - 1 Oct 2016
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