377Involvement of solicitors in managed investment

377 Involvement of solicitors in managed investment schemes (1) This part does not prevent a solicitor from carrying out any legal services in relation to a managed investment scheme operated by a responsible entity, or from having an interest in such a managed investment scheme or in the responsible entity for such a managed investment scheme.

(2) However, if a client entrusts, or proposes to entrust, money to a solicitor to be invested in a managed investment scheme operated by a responsible entity, and the solicitor has a relevant interest in the managed investment scheme, the solicitor must give the client written notice telling the client that— (a) the solicitor has an interest in the managed investment scheme; and (b) the operation of the managed investment scheme does not form part of the solicitor’s practice; and (c) there is no right to claim against the fidelity fund for a financial loss arising from an investment in the managed investment scheme. (3) The notice must include any other information required by a regulation or the legal profession rules. (4) The solicitor must not advance the money entrusted to the solicitor to the responsible entity for the managed investment scheme or to anyone else unless the client has been given the notice. (5) A solicitor who knows that an associate has contravened subsection (2), (3) or (4) must give written notice to the law society council of that fact not later than 21 days after the day the solicitor becomes aware of the contravention. (6) A contravention of this section can be professional misconduct. relevant interest—a solicitor has a relevant interest in a managed investment scheme if the solicitor, or an associate of the solicitor— (a) is a director of, or concerned in, the management of the responsible entity for the managed investment scheme; or (b) is a shareholder in the responsible entity; or

Managed investment schemes Division 3.5.3 (c) is taken to be an agent of the responsible entity under the Corporations Act, chapter 5C; or (d) receives any financial benefit from the managed investment scheme or the responsible entity if a client of the solicitor invests in the managed investment scheme; or (e) has an interest prescribed by regulation or the legal profession rules in the managed investment scheme or the responsible