THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.3 - PARTICIPANTS IN THE SECURITIES INDUSTRY

Division 1 - Dealers and investment advisers and operators of managed investment schemes

SECTION 786   CONDITIONS OF LICENCE  

786(1)  [Conditions may be prescribed or imposed]  

A licence is subject to:

(a)  such conditions and restrictions as are prescribed; and

(b)  subject to section 837, such conditions and restrictions as the Commission imposes when granting the licence or at any time when the licence is in force.

786(2)  [Types of conditions]  

Without limiting the generality of subsection (1), conditions and restrictions referred to in paragraph (1)(a) or (b) may include:

(a)  conditions and restrictions relating to the limitation of the liability that may be incurred by the holder of a dealers licence in connection with a business of dealing in securities;

(b)  conditions and restrictions relating to the incurring and disclosure of liabilities arising otherwise than in connection with a business of dealing in securities;

(c)  conditions and restrictions relating to the financial position of the holder of a dealers licence, whether in relation to the business of dealing in securities carried on by the holder or otherwise;

(d)  a condition requiring the holder of a dealers licence or of an investment advisers licence to lodge and maintain with the Commission a security approved by the Commission for such amount not exceeding the prescribed amount as is, from time to time, determined by the Commission in relation to the holder of that licence;

(e)  conditions about what the holder of a licence is to do, by way of supervision and otherwise, in order to prevent the holder's representatives from contravening:

(i) a securities law; or

(ii) another condition of the licence; and

(f)  conditions about what the holder of a licence is to do to ensure that each representative of the holder has adequate qualifications and experience having regard to what the representative will do on the holder's behalf in connection with a securities business or investment advice business carried on by the holder.

786(3)  [Financial conditions]  

Without limiting the generality of paragraph (2)(c), the conditions referred to in that paragraph may include:

(a)  a condition that the assets of the holder of a dealers licence include, or do not include, assets of a particular kind or kinds; and

(b)  a condition that the sum of the values of the assets of a particular kind or kinds included in the assets of the holder of a dealers licence be not less than, or not more than, an amount ascertained in accordance with the condition.

786(4)  [Determination of value of assets]  

A condition referred to in paragraph (3)(b) may provide for the values of assets of a dealer for the purposes of the application of that condition to be ascertained in a manner specified in, or determined in accordance with, the condition.

786(5)  [Formulas for ascertaining value]  

The provision that may be made in a condition referred to in paragraph (3)(b) for ascertaining the amount referred to in that paragraph may be, but is not limited to, a provision that the amount shall be:

(a)  a specified percentage of the sum of the values of all the assets of the holder of a dealers licence;

(b)  a specified percentage of the sum of the values of all the assets of the holder of the dealers licence that are included in a specified class or classes of those assets;

(c)  a specified percentage of the sum of the amounts of all the liabilities of the holder of the dealers licence; or

(d)  a specified percentage of the sum of the amounts of all the liabilities of the holder of the dealers licence that are included in a specified class or classes of those liabilities.

786(6)  [Meaning of assets]  

A reference in this section to the assets of the holder of a dealers licence is a reference to all the assets of the holder of the licence, whether or not the assets are used in, or in connection with, the business of dealing in securities carried on by the holder.

786(7)  [Commission may revoke or vary conditions]  

Subject to section 837, the Commission may, at any time, revoke or vary conditions or restrictions imposed under paragraph (1)(b).

786(8)  [Commission to notify securities exchange]  

Where the Commission imposes, or varies or revokes, conditions or restrictions under this section in relation to a licence granted to a member of a securities exchange, the Commission shall inform the securities exchange and, if the member is a partner in a member firm, the member firm.

786(9)  [Application of security lodged]  

Where a security is lodged with the Commission pursuant to a condition to which a licence is subject in accordance with paragraph (2)(d), the security may be applied by the Commission in such circumstances, for such purposes and in such manner as is prescribed.