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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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