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Frequently Asked Questions - #37

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FAQ-37

The Part 2 Application states: 

“Completion of the following certifications signifies:

your agreement not to take any action during the period to which each certification applies that might affect the accuracy of the certifications; and

your acknowledgement that you do not know of or cannot reasonably anticipate, at the time of this Part 2 Application, any event(s) that might cause these certifications to become untrue during the period to which each certification applies.”

What if a certification becomes untrue, but not as a direct consequence of an action taken by the applicant?


The applicant is subject to sanctions if a certification it makes becomes untrue.  The certifications are designed so that the applicant should either know or be able to control whether the certification stays true during the period to which a certification applies.  There is no exception from sanctions if a certification becomes untrue, even if an action taken by the applicant is not the proximate cause.

In weighing the appropriateness of a sanction, we would expect that the Board would consider whether the applicant should have reasonably been aware of the possibility of the event that caused the certification to become untrue, as well as the nature of the relationship between the applicant and the party whose action caused the certification to become untrue.



11/15/2021, in Association and Confidential Information Rules.

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