117   Conduct of mortgage practices

(1)  A solicitor must not, in the solicitor’s capacity as solicitor for a lender or contributor, negotiate the making of or act in respect of a regulated mortgage unless:

(a)  the mortgage is a State regulated mortgage, or

(b)  the mortgage is a run-out mortgage, or

(c)  the mortgage forms part of a managed investment scheme that is operated by a responsible entity.

(2)  A solicitor must not, in the solicitor’s capacity as solicitor for a lender or contributor, negotiate the making of or act in respect of a regulated mortgage except in accordance with:

(a)  the Corporations Act 2001 of the Commonwealth, or that Act as modified by any ASIC exemption or the regulations under that Act, and

(b)  this Act, the regulations and solicitors rules.

(3)  A solicitor must not, in the solicitor’s capacity as solicitor for a lender or contributor, negotiate the making of or act in respect of a regulated mortgage that forms part of a managed investment scheme unless the solicitor complies with any ASIC exemption that applies to managed investment schemes that:

(a)  have more than 20 members, and

(b)  are operated under the supervision of the Law Society in accordance with that exemption.

This subsection applies even if the regulated mortgage forms part of a managed investment scheme that has no more than 20 members.

(4)  Subsection (3) does not apply if the managed investment scheme is operated by a responsible entity.

(5)  A solicitor who knows that an associate has contravened a requirement referred to in subsection (1), (2) or (3) must notify the Law Society Council of that fact in writing within 21 days after becoming aware of the contravention.

(6)  A solicitor who contravenes this section commits professional misconduct.