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CORPORATIONS ACT 2001 No. 50, 2001 - SECT 850

Defences to alleged breach of subsection 849(2)

(1) Where:

(a)
a person:

(i)
when making a recommendation orally, fails to disclose; or
(ii)
when making a recommendation in writing, fails to set out in that writing;
as required by subsection 849(2), particulars of a matter; and

(b)
it is proved that the person was not, and could not reasonably be expected to have been, aware of that matter when making the recommendation;

the failure is not a contravention of that subsection.

(2) Where:

(a)
a dealer or investment adviser, or a representative of a dealer or investment adviser:

(i)
when making a recommendation orally, fails to disclose; or
(ii)
when making a recommendation in writing, fails to set out in that writing;
as required by subsection 849(2), particulars of a matter; and

(b)
in the case of a representative of a dealer or investment adviser—by making the recommendation, the representative does an act as a representative of the dealer or investment adviser; and

(c)
it is proved that the dealer or investment adviser had in operation, throughout a period beginning before the decision to make the recommendation was made and ending after the recommendation was made, arrangements to ensure that:

(i)
the natural person who made the decision knew nothing about that matter before the end of that period; and
(ii)
no advice with respect to the making of the recommendation was given to the person by anyone who knew anything about that matter; and
(d)
it is also proved that:

(i)
the person in fact knew nothing about that matter before the end of that period; and
(ii)
no such advice was so given;
the failure is not a contravention of that subsection.

(3) Neither of subsections (1) and (2) limits the generality of the other.



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