THE CORPORATIONS LAW

CCH Note: Part 13 of the Corporations Act 1989, inserted by sec 6 of No 110 of 1990, Sch 1 (effective 1 January 1991), begins as follows:

PART 13 - THE CORPORATIONS LAW
THE CORPORATIONS LAW 82
The Corporations Law is as follows:...

CHAPTER 7 - SECURITIES

PART 7.4 - CONDUCT OF SECURITIES BUSINESS

Division 3 - Recommendations about securities

SECTION 851 ADVISER MUST HAVE REASONABLE BASIS FOR RECOMMENDATION

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851(1) [Contravention if no reasonable basis]

A securities adviser who:

(a) makes a securities recommendation to a person who may reasonably be expected to rely on it; and

(b) does not have a reasonable basis for making the recommendation to the person;

contravenes this section.

851(2) [Requirements for reasonable basis]

For the purposes of subsection (1), a securities adviser does not have a reasonable basis for making a securities recommendation to a person unless:

(a) in order to ascertain that the recommendation is appropriate having regard to the information the securities adviser has about the person's investment objectives, financial situation and particular needs, the securities adviser has given such consideration to, and conducted such investigation of, the subject matter of the recommendation as is reasonable in all the circumstances; and

(b) the recommendation is based on that consideration and investigation.

851(3) [Contravention of subsection (1) not an offence]

A person who contravenes subsection (1) is not guilty of an offence.

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