CORPORATIONS REGULATIONS 2001 - REG 10.2.103 Conduct by a person who operates as representative and principal

CORPORATIONS REGULATIONS 2001 - REG 10.2.103

  (1)   Despite anything else in this Division, or in regulation   10.2.42, if:

  (a)   the conduct of a representative causes a liability, loss, damage or a similar consequence to arise; and

  (b)   at the time the conduct is engaged in, the representative is also a principal that is authorised or permitted under any law to provide financial services in the class of financial services to which the conduct relates;

the representative is liable (whether as a principal or as a representative) to the extent that the law under which the representative provides the relevant financial services makes the representative liable.

  (2)   Despite regulation   10.2.42, if:

  (a)   the conduct of a representative causes a liability, loss, damage or a similar consequence to arise; and

  (b)   the representative is also a principal that is authorised or permitted to provide financial services in the same class of financial services as the financial service to which the conduct relates; and

  (c)   at the time the conduct occurred, the representative's principal or principals:

  (i)   had authorised the representative to provide the same class of financial services; and

  (ii)   are liable in respect of the conduct;

the representative, and the principal or principals, are jointly and severally liable in accordance with the law under which they are liable, to the extent that the same or similar liability exists.

Note:   Under regulation   10.2.42, there are some restrictions on a person who acts both as an authorised representative and as a regulated principal in respect of the same activities.

  For example, if a principal is liable to a person in respect of an amount of money ($X), and the representative is also liable in respect of an amount of money ($X + $Y) in respect of the same conduct, both of them will be jointly and severally liable for $X, but the representative will be liable to pay $Y.