23. The following new part is hereby inserted immediately after Part III and shall have effect as Part IIlA of the principal enactment: "
| 31A, A managing company intending to operate a unit trust shall make an application in the prescribed form together with the prescribed fee to the Commission for the grant of a licence to operate such unit trust. Every such application shall be accompanied by the prescribed documents. |
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| 31B. NO licence shall be granted under this Part for the operation of a unit trust unless such unit trust complies with the terms and conditions set out in Part IV of the Schedule hereto. |
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| 31C. On receipt of an application made under section 31A the Commission, having considered the particulars stated therein and the documents accompanying such application and, where it deems it necessary, having given the applicant an opportunity of being heard, in person or by a representative, shall, by written notice to the applicant, inform the applicant, whether he is being granted a licence or not. |
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| 31D
| | (1) The Commission shall cancel or suspend the licence granted in respect of a unit trust where the Commission is satisfied that"
| | | (a) the trustee or managing company of that licensed unit trust has acted in breach of any provisions of this Act, or any rules or regulations made under this Act; or |
| (b) the trustee or managing company of that licensed unit trust has ceased to be of good financial standing ; or Cancellation of a licence granted to a unit trust. |
| (c) the managing company has since the grant of the licence, been disqualified for the grant of such licence; |
| (d) the trustee or managing company of that licensed unit trust is guilty of malpractice or irregularity in the management of his affairs ; or |
| (e) the managing company of that licensed unit trust has been dismissed by the trustee of that unit trust. |
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| | (2) Before the cancellation of a licence granted in respect of a unit trust in terms of the preceding subsection, the licence shall be given an opportunity to show cause as to why such licence should not be cancelled. | | |
| | (3) Where the licence granted in respect of a unit trust is cancelled, it shall be the duty of the licence to forthwith surrender his licence to the Commission. | | |
| | (4) Where the Commission is satisfied that the trustee or managing company of a unit trust has contravened the provisions of paragraph (a) or (b) or (c) or (d) of sub section (1) and that such contravention is not of a serious nature, it may in lieu of acting under subsection (1), direct such trustee, or managing company to take what ever action that the Commission may consider appropriate to"
| | | (a) rectify or set right the condition resulting from such contravention ; or |
| (b) to comply with the provisions of this Act or any rule or regulation made under this Act or to desist from continuing such contravention. |
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(5) The giving of a direction by the Commission to a trustee, or managing company, under subsection (4), shall not affect or prejudice the institution or maintenance of a prosecution against such trustee or managing company for an offence under this Act. | | |
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| 31E.
| | (1) Any person aggrieved by a decision of the Commission"
| | | (a) refusing to grant a licence under section 31A., or |
| (b) canceling or suspending a licence under section 3ID, |
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| | (2) The Secretary to the Ministry of the Minister may require the Commission to show cause for its decision to his satisfaction and shall, within three months of the receipt of such appeal, communicate his decision to the person mailing the appeal | | |
| | (3) An applicant who is aggrieved by the decision of the Secretary to the Ministry of the Minister may appeal against such decision to the Court of Appeal, within fourteen days from the date on which the decision is communicated to the applicant | | |
| | (4) Until rules are made under Article 136 of the Constitution pertaining to appeals under this section, the rules made under that Article pertaining to applications by way of revision to the Court of Appeal shall, mutatis mutandis, apply to every appeal made under subsection (3) of this section | | |
| | (5) The Court of Appeal may, on an appeal made to it under this section confirm, revise, modify or set aside the decision of the Secretary to the Ministry of the Minister and may make any order as the interests of justice may require. | | |
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| 31F
| | (1) The trust deed of a licensed unit trust shall not be amended, without the prior approval in writing of the Commission. | | |
| | (2) Where the trustee of a licensed unit trust proposes to amend the trust deed of such unit trust he shall forward the proposed amendments, to the Commission. | | |
| | (3) The Commission shall, within twenty one days of receipt of the proposed amendments forwarded under subsection (2), give written notice to the managing company and trustee stating whether the proposed amendments to the trust deed are allowed or disallowed. | | |
| | (4) Upon receipt of a notice under subsection (3), trustee shall give immediate effect to such notice. | | |
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| 31G. Where a person licensed under section 31A proposes to alter any particulars in his application for a licence or undergoes or intends to undergo a change from the state specified in the application for a licence under section 31A, it shall be the duty of such person to inform the Commission and obtain its prior consent before such alteration or change is effected. |
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| 31H. No person shall use the words unit trust or licensed unit trust, as the case may be, unless he has been authorised to operate a unit trust under section 31A. |
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| 31I. No person shall issue or publish a prospectus or an advertisement inviting the public to invest in units of a licensed unit trust (other than advertisements excluded by the Commission by rules) unless he has obtained the prior written approval of the Commission, for the contents of such prospectus or the text of such advertisement, as the case may be, and for its issue or publication. |
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| 31 J.
| | (1) Notwithstanding anything in the Trust Ordinance or any other law, a trustee of a licensed unit trust shall not be liable for any breach of trust arising from any act of the managing company of such unit trust if"
| | | (a) such act was done without obtaining the concurrence of such trustee ; |
| (b) such act was done after obtaining the concurrence of such trustee and such concurrence was given, in good faith, on the faith of any written statement or representation made to such trustee by such managing company as to any matter relating to trust property or on the faith of any professional advice obtained by such managing company independently of such trustee. |
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| | (2) nothing contained in subsection (1) of this section shall be deemed to exempt a trustee from liability for a breach of trust which h-:s been occasioned by fraud or negligence.". | | |
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Sri Lanka Consolidated Acts