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CORPORATIONS ACT 2001 No. 50, 2001 - SECT 849
Client to be told if adviser's interests may influence
(1) This section applies where a securities adviser makes a
securities recommendation to a person (in this section called the client ) who
may reasonably be expected to rely on it.
(2) The securities adviser must:
- if the recommendation is made
orallywhen making the recommendation, disclose to the client orally; or
- if the recommendation is made in writingset out in that writing, in
such a way as to be no less legible than the other material in that writing;
- any commission or fee, or any other benefit or advantage, whether
pecuniary or not and whether direct or indirect, that the securities adviser
or an associate has received, or will or may receive, in connection with the
making of the recommendation or a dealing by the client in securities as a
result of the recommendation; and
- any other pecuniary or other interest, whether direct or indirect, of the
securities adviser or an associate, that may reasonably be expected to be
capable of influencing the securities adviser in making the recommendation.
(3) Subsection (2) does not apply in relation to a commission or fee that
the securities adviser has received, or will or may receive, from the client.
(4) If by making the recommendation the securities adviser does an act as a
representative of another person, then:
- without limiting the generality
of Division 2 of Part 1.2, the other person is an associate for the
purposes of subsection (2); and
- subsection (2) does not apply in relation to a commission or fee that
the other person has received, or will or may receive, from the client.
(5) For the purposes of Division 2 of Part 1.2, the making of
securities recommendations is the matter to which a reference to an associate
in subsection (2) relates.
(6) Despite Division 2 of Part 1.2 and subsection (5), a person
(in this subsection called the alleged associate ) is not an associate for the
purposes of subsection (2) merely because of being:
- a partner of
the securities adviser otherwise than because of carrying on a
securities business in partnership with the securities adviser; or
- a director of a body corporate of which the securities adviser is also a
director, whether or not the body carries on a securities business;
unless the securities adviser and the alleged associate act jointly, or
otherwise act together, or under an arrangement between them, in relation to
making securities recommendations.
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