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(1) Subject to this Part, a fidelity fund shall be held and applied for the purpose of compensating persons who suffer pecuniary loss from a misappropriation of moneys committed by a licensed broker-dealer of

the stock exchange or a director or partner or by an employee of the licensed broker-dealer of die stock exchange in relation to money or other property which in the course of or in connection with the business of that licensed broker-dealer

(a) was entrusted to or received by a licensed broker-dealer of the stock exchange or a director or partner or employee for or on behalf of any other person; or

(b) was entrusted to or received by the licensed broker-dealer of the stock exchange entrusted to or received by the licensed broker-dealer or an employee of the licensed broker-dealer as trustee or for or on behalf of the trustees of that money or property.

(2) Except as otherwise provided in this section, the total amount that may be paid under this Part to a person who suffers pecuniary loss through misappropriation of moneys by a licensed broker-dealer of die stock exchange or a director or partner or through misappropriation of moneys by an employee of the licensed broker-dealer shall not, exceed in respect of that licensed broker-dealer an amount determined by the Commission.

(3) For the purposes of subsection (2), an amount paid from a fidelity fund shall to the extent to which the fund is subsequently reimbursed be disregarded.

(4) Where, after taking into account all ascertained or contingent liabilities of a fidelity fund, the governing body considers that the insets of the fund so permit, the governing body may decide to increase the total amount which may be applied from that fund under subsection (2) and shall inform the Commission accordingly.

(5) The Commission shall publish a notice of the decision in the Gazette and from the date of the publication until the notice is revoked or varied, the amount specified in the notice shall be the total amount which may be applied for compensation for pecuniary loss.

(6) Where the governing body decides to revoke or vary the contents of die notice under subsection (5), the governing body shall inform the Commission which shall then cause notice of die revocation or variation to be published in the Gazette.

(7) Where in a particular case after taking into account all ascertained or contingent liabilities of a fidelity fund, the governing body considers that die assets of the fund so permit, the governing body may apply out of the fund a sum of money in excess of the total amount limited by or under this section as the governing body considers appropriate towards the compensation of persons who have suffered pecuniary loss as provided in subsection (1).

(8) Despite subsections (2), (3), (4) (5) and (7), the Commission may, direct the governing body to increase the total amount of moneys which shall be applied from a fidelity fund of a particular licensed broker-dealer of the stock exchange in payment to persons who suffer pecuniary loss through misappropriations of moneys by that particular licensed broker-dealer or by a director or partner or by an employee of that licensed broker-dealer.

(9) For the purposes of this Part, “director of a licensed broker- dealer of the stock exchange” or “partner of a licensed broker-dealer of the stock exchange” includes a person who has been, but at the time of the misappropriation of the moneys has ceased to be a director or partner if, at the time of the misappropriation of the moneys, the person claiming compensation has reasonable grounds for believing that person to be a director or a partner of die licensed broker-dealer of the stock exchange.