New South Wales Consolidated Acts

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LEGAL PROFESSION UNIFORM LAW (NSW) - SECT 258

Prohibited services and business

258 Prohibited services and business

(1) A law practice (or a related entity) must not--
(a) promote or operate a managed investment scheme; or
(b) provide a service or conduct a business of a kind specified in the Uniform Rules for the purposes of this section.
Civil penalty: 250 penalty units.
(1A) Despite subsection (1), a law practice (or a related entity) may promote or operate a managed investment scheme if--
(a) the scheme is connected with or related to the business structure or ownership of the law practice; or
(b) the scheme is connected with or related to the operation of the law practice and no person who is not an associate of the law practice has an interest in--
(i) the scheme; or
(ii) the responsible entity for the scheme; or
(c) the scheme is of a kind specified in the Uniform Rules for the purposes of this paragraph.
(2) Despite subsection (1), an associate of a law practice may promote or operate a managed investment scheme if, in the event of an insolvency or administration of the managed investment scheme, the associate is appointed as--
(a) an administrator, liquidator, receiver, receiver and manager, agent of a mortgagee or controller of the managed investment scheme in respect of the insolvency or administration; or
(b) a controller or external administrator of an entity acting in a similar capacity as a responsible entity where a managed investment scheme does not have a responsible entity in respect of an insolvency or administration.
(3) Except as permitted by or under the Uniform Rules, or as approved by the designated local regulatory authority, a law practice must not provide legal services in relation to a managed investment scheme if any associate of the law practice has an interest in the scheme or the responsible entity for the scheme.
Civil penalty: 250 penalty units.
(4) A law practice (or a related entity) must not, in its capacity as the legal representative of a lender or contributor, negotiate the making of or act in respect of a mortgage, other than--
(a) a mortgage under which the lender is a financial institution; or
(b) a mortgage under which the lender or contributors nominate the borrower, but only if the borrower is not a person introduced to the lender or contributors by the law practice who acts for the lender or contributors or by an associate or agent of the law practice, or a person engaged by the law practice for the purpose of introducing the borrower to the lender or contributors; or
(c) a mortgage, or a mortgage of a class, that the Uniform Rules specify as exempt from this prohibition.
Civil penalty: 250 penalty units.
(5) In this section--

"borrower" means a person who borrows, from a lender or contributor, money that is secured by a mortgage;

"contributor" means a person who lends, or proposes to lend, money that is secured by a contributory mortgage arranged by a law practice;

"contributory mortgage" means a mortgage to secure money lent by 2 or more contributors as tenants in common or joint tenants, whether or not the mortgagee is a person who holds the mortgage in trust for or on behalf of those contributors;

"financial institution" means--
(a) an ADI; or
(b) a corporation or other body, or a corporation or body of a class, specified in the Uniform Rules for the purpose of this definition;

"lender" means a person who lends, or proposes to lend, a borrower money that is secured by a mortgage.
(6) To the extent that this section applies to an incorporated legal practice, this section is declared to be a Corporations legislation displacement provision for the purposes of section 5G of the Corporations Act.



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