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Rules of Practice 1994 (S.R. 1994, No. 229)
|Requested: 28 Jun 2017|
|Consolidated as at: 17 Mar 2006|
Division 3 - Liability of related firms
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.