THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.6 - MONEY AND SCRIP OF DEALERS' CLIENTS

SECTION 872   MONEY LENT TO DEALER  

872(1)  [Application of section]  

This section applies where a person (in this section called the client ) lends money to a dealer in connection with a securities business carried on by the dealer.

872(2)  [Payment into separate account]  

The dealer shall pay the money into an account that:

(a)  the dealer maintains with an Australian ADI; and

(b)  contains no money other than money lent to the dealer;

and shall so pay the money on or before the next day after the dealer receives it on which it can be paid into that account.

872(3)  [Dealer to disclose loan to client]  

The dealer shall give to the client a document (in this section called the ``disclosure document''), in the prescribed form, setting out:

(a)  the terms and conditions on which the loan is made and accepted; and

(b)  the purpose for which, and the manner in which, the dealer is to use the money.

872(4)  [Condition for release of money]  

The dealer shall keep the money in the account until the client gives the dealer a written acknowledgment that the client has received the disclosure document.

872(5)  [Permitted use of loan]  

The dealer shall not use the money except:

(a)  for the purpose, and in the manner, set out in the disclosure document; or

(b)  for any other purpose, or in any other manner, agreed on in writing by the dealer and the client after the dealer gives the disclosure document to the client.