(1) On an application for registration as a user of a firearm, the registrar must refuse to register the applicant as a user unless satisfied on reasonable grounds that—
(a) the firearm to which the application relates is of a kind suitable for use for the genuine reason established by the applicant for the issue of the applicant's licence; and
(b) if the applicant is a licensed firearms dealer or composite entity, or an employee or person acting on behalf of a licensed firearms dealer or composite entity—the applicant requires the firearm for the purposes of the dealership or entity.
(2) Also, if the registrar requires the registered owner of a firearm to produce the firearm under section 169 (3), the registrar must refuse to register the user if the firearm is not produced as required.