88Application money to be held on trust

88 Application money to be held on trust

88 Application money to be held on trust

(cf Corporations Act s 722)

(1) If a person offers shares for issue or sale under a disclosure statement, the person must hold—

(a) all application money received from people applying for shares under the disclosure statement; and

(b) all other money paid by them on account of the shares before they are issued or transferred;

in trust under this section for the applicants until—

(c) the shares are issued or transferred; or

(d) the money is returned to the applicants.

Maximum penalty—$2,500 or imprisonment for 6 months, or both.

(2) If the application money needs to be returned to an applicant, the person must return the money as soon as practicable.

Maximum penalty—$2,500 or imprisonment for 6 months, or both.

(3) An offence based on subsection (1) or (2) is an offence of strict liability.