COLL 5.3.4 Exceptions from Liability for Prospectus—All QFC Schemes

(1) A person (other than the operator) is not liable under rule 5.3.3 to pay compensation, in relation to a statement in, or omission from, a QFC scheme's prospectus, to another person who acquires units in the scheme if—
(a) at the time the prospectus was filed with the Regulatory Authority, the person believed on reasonable grounds, after having made all inquiries that were reasonable—
(i) that the statement was true and not misleading; or
(ii) that the omitted matter was properly omitted; and

Note See defs acquire and prospectus in r (6).
(b) 1 or more of the following subparagraphs apply:
(i) the person continued in that belief until the units were acquired;
(ii) the units were acquired before it was reasonably practicable to bring a correction to the attention of potential purchasers of the units;
(iii) before the units were acquired, the person had already taken all reasonable steps to ensure that a correction was brought to the attention of potential purchasers of the units;
(iv) the person who acquired the units was not materially influenced or affected by the statement or omission in making the decision to invest.
(2) A person (the first person) is not liable under rule 5.3.3 to pay compensation, in relation to a statement in a QFC scheme's prospectus, to another person who acquired units in the scheme if—
(a) the statement is a part of the prospectus for which a third person (the expert) is taken, under rule 5.3.2 (Responsibility for expert statements in prospectus—all QFC schemes), to have accepted responsibility; and
(b) at the time the prospectus was filed with the Regulatory Authority, the first person believed on reasonable grounds, after having made all inquiries that were reasonable—
(i) that the expert was competent to make the statement; and
(ii) that the expert gave the operator written consent to include the statement in the prospectus; and
(iii) that the expert had not withdrawn the consent; and
(iv) that the statement was included in, or substantially in, the form and context in which the expert consented to its inclusion; and
(c) 1 or more of the following subparagraphs apply:
(i) the first person continued in that belief until the units were acquired;
(ii) the units were acquired before it was reasonably practicable to bring a correction to the attention of potential purchasers of the units;
(iii) before the units were acquired, the first person had already taken all reasonable steps to ensure that a correction was brought to the attention of potential purchasers of the units;
(iv) the person who acquired the units was not materially influenced by the statement in making the decision to invest.
(3) For the application of subrule (1) (b) (iii) or (2) (c) (iii) in relation to a person, it is sufficient if, before the units were acquired—
(a) the correction had been published in a way likely to bring it to the attention of potential purchasers of the units; or
(b) the person took all reasonable steps to ensure that such a correction was published and believed on reasonable grounds the correction had been published.
(4) A person is not liable under rule 5.3.3 to pay compensation, in relation to a statement in or omission from a QFC scheme's prospectus, to another person who acquired units in the scheme if the other person knew, at the time of acquisition, that the statement was untrue or misleading or of the omission.
(5) For this rule—
(a) a revised or supplementary prospectus is taken to be a different prospectus from the original prospectus; and
(b) each revised or supplementary prospectus filed with the Regulatory Authority is taken to be a different prospectus from each other revised or supplementary prospectus filed with the authority.
(6) In this rule:

acquire units includes contract to acquire them.

prospectus includes a translation of the prospectus prepared by or for the operator.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)