23Requirements for transferable securities

23 Requirements for transferable securities

(1) For these rules, each of the following is a transferable security only if title to it can be transferred from one party to another or redeemed from the issuer: (a) a share or stock in a body corporate; (b) a bond or other form of debt security (other than a money market instrument); (c) an interest in a CIS; (d) any interest in an asset covered by paragraph (a), (b) or (c); (e) a right to be issued an asset covered by paragraph (a), (b), (c) or (d) on payment of a specified amount for that asset that is granted by the issuer of that asset. (2) A passport fund must not acquire a transferable security if liability could arise from holding it under the terms of the security, whether on the basis that the security is partly paid or otherwise, other than in the case of: (a) a partly‑paid share or stock in a body corporate or interest in a CIS that is quoted on a financial market and in relation to which no holders have an ongoing right to redeem their membership for payment of an amount reflecting the value of their share, stock or interest; or (b) a share or stock in a body corporate or interest in a CIS which is intended to be quoted on a financial market within 7 days of acquisition and in relation to which no holders have an ongoing right to redeem their membership for payment of an amount reflecting the value of their share, stock or interest. (3) A passport fund must not acquire a transferrable security mentioned in paragraph (2)(a) or (b) unless: (a) the passport fund holds assets that the operator of the passport fund reasonably believes will be available and able to be converted into sufficient assets to meet the liability; and (b) in the case of a partly‑paid share or stock in a body corporate or interest in a CIS that is quoted on a financial market, the operator must reasonably believe that the share or stock in a body corporate or interest in a CIS can be reliably valued and while held will be able to be closed out or sold for that value on any business day in the place in which the security is acquired by the passport fund.