Document ID: chunk:federal_register_of_legislation:C2004A03231:schedule:1:p14
Version: federal_register_of_legislation:C2004A03231
Segment Type: schedule
Provision Reference: sch 1 (pt 14/23)
Character Range: 254829–257592

applies is not a contract by way of gaming or wagering if it was entered into on a stock market of a securities exchange or on an exempt stock market.".

Further provisions relating to revocation and suspension of licences
189. Section 60 of the Principal Act is amended by adding at the end the following sub-section:
"(6) Without limiting the matters to which the Commission may have regard in determining whether it has reason to believe that a person who is the holder of a dealers licence, an investment advisers licence or a representatives licence has not performed the duties of a holder of such a licence efficiently, honestly and fairly, the Commission may, in so determining, have regard to a contravention by the person of sub-section 65a (1).".

Issue of contract notes
190. Section 64 of the Principal Act is amended by omitting from sub-paragraph (2) (h) (i) "stock exchanges" and substituting "securities exchanges".

191. After section 65 of the Principal Act the following section is inserted:

Recommendations
"65a. (1) An adviser who—
     (a) makes a recommendation with respect to securities or a class of securities to a person who may reasonably be expected to rely on the recommendation; and
     (b) does not have a reasonable basis for making the recommendation to the person,
contravenes this sub-section.
"(2) For the purposes of sub-section (1), an adviser does not have a reasonable basis for making a recommendation to a person unless—
     (a) the adviser has, for the purpose of ascertaining that the recommendation is appropriate having regard to the information possessed by the adviser concerning the investment objectives, financial situation and particular needs of the person, 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.
"(3) An adviser who contravenes sub-section (1) is not guilty of an offence by virtue of that sub-section or section 141.
"(4) Where—
     (a) an adviser contravenes sub-section (1) by making a recommendation to a person;
     (b) the person, in reliance on the recommendation, does a particular act, or refrains from doing a particular act;

     (c) it is reasonable, having regard to the recommendation and all other relevant circumstances, for the person to do that act, or to refrain from doing that act, as the case may be, in reliance on the recommendation; and
     (d) the person suffers loss or damage as a result of doing that act, or refraining from doing that act, as the case may be,
the adviser is liable to pay damages to the person in respect of that loss or damage.
"(5) An adviser who—
     (a)