(1)  This Part does not prevent an Australian legal practitioner from carrying out any legal services in connection with a mortgage investment scheme that is conducted by a separate legal entity, or from having an interest in a mortgage investment scheme or in the separate legal entity that conducts the mortgage investment scheme.

(2)  If a client of the law practice or other person entrusts, or proposes to entrust, money to an Australian legal practitioner to be invested in a mortgage investment scheme conducted by a separate legal entity, and the Australian legal practitioner has an interest in the mortgage investment scheme, the Australian legal practitioner must give the client or other person a notice in writing that advises the client or other person that –

(a) the Australian legal practitioner has an interest in the mortgage investment scheme; and

(b) the mortgage investment scheme does not form part of the Australian legal practitioner's practice; and

(c) there is no claim against the Guarantee Fund for any pecuniary loss arising from an investment in the mortgage investment scheme; and

(d) there is no right to claim against the professional indemnity insurance held by the law practice for any loss arising from an investment in the mortgage investment scheme.

(3)  The notice is to include such other matters as may be required by the regulations or the legal profession rules.

(4)  The Australian legal practitioner must not advance the money entrusted to the Australian legal practitioner to the separate legal entity for the mortgage investment scheme or to any other person unless the client or the person who entrusted the money has been given the notice.

(5)  An Australian legal practitioner who knows that an associate has contravened a requirement referred to in this section must notify the Board in writing of that fact within 21 days after becoming aware of the contravention.

(6)  A contravention of this section is capable of constituting professional misconduct.

Note. Section 232 provides that money involved in financial services or investments is not trust money. Section 279 provides that a law practice must notify the person entrusting the money to the law practice that the money involved in financial services or investments is not trust money. Section 366 provides that claims cannot be made against the Guarantee Fund in relation to defaults relating to money involved in financial services or investments.