Sch 4

Schedule 4 32. Schedule 4 to the Principal Act is amended: (a) by omitting from Part 1 of Form 1 all the material in the right-hand column from and including “Transferor’s broker” to and including “(place and date of affixing stamp)”; (b) by omitting from Part 1 of Form 1 all the material from and including “I (or We) hereby transfer” to and including “Date(s) signed:” and substituting the following: “The transferor (s) hereby transfer (s) the above securities to the transferee (s) named in Part 2 hereof or to the several transferees named in Part 2 of the Broker’s Transfer Form(s) or Split Transfer Form(s) relating to the above securities. This transfer is executed on the transferor’s behalf by the transferor’s broker, who certifies: (a) as to the validity of documents; and (b) that stamp duty, if payable, has been or will be paid. \[Transferor’s broker’s stamp\] Affixed at..................................................... on........................................................... (place and date of affixing stamp)”; (c) by omitting from Part 1 of Form 5 all the material in the right-hand column from and including “Transferor’s Broker” to and including “(place and date of affixing stamp)”; (d) by omitting from Part 1 of Form 5 all the material from and including “I (or We) hereby renounce” to and including “Date(s) signed:” and substituting the following: “The transferor(s) hereby renounce(s) and transfer(s) the above rights in favour of the transferee(s) named in Part 2 hereof or to the several transferees named in Part 2 of the Broker’s Renunciation and Transfer Form(s) or Renunciation and Split Transfer Form(s) relating to the above rights. This transfer and renunciation is executed on the transferor’s behalf by the transferor’s broker, who certifies: (a) as to the validity of documents; and (b) that stamp duty, if payable, has been or will be paid. \[Transferor’s broker’s stamp\] Affixed at..................................................... on........................................................... (place and date of affixing stamp)”. Division 2—Amendments of Securities Industry Act 19802 33. Section 122aa of the Principal Act is amended: (a) by inserting “, 6a” after “6” in the definition of “claim” in subsection (1); (b) by inserting in subsection (2) “122pc (b) or” before “122t”; (c) by inserting in subsection (2) “(1a),” after “122za (1),”; (d) by omitting from subsection (2) “this Act” (first occurring) and substituting “a relevant Act”; (e) by omitting from subsection (2) “this Act” (second occurring) and substituting “that relevant Act”. Payments out of Fund 34. Section 122cd of the Principal Act is amended: (a) by inserting in subsection (2) “, 6a” after “6”; (b) by inserting in paragraph (3) (a) “or 6a” after “6”. 35. After section 122p of the Principal Act the following Division is inserted: “Division 6a—Unauthorised transfer “122pa. In this Division, unless the contrary intention appears: ‘claim’ means a claim under this Division against the Corporation; ‘dealer’ means a member of a participating exchange; ‘securities’ means marketable securities, or rights to marketable securities, within the meaning of: (a) Division 8 of Part IV of the Companies Act 1981; or (b) provisions of a law of a participating State or participating Territory that correspond with that Division. Execution of transfer on a person’s behalf as transferor “122pb. For the purposes of this Division, a dealer shall be taken to have executed a document of transfer in relation to securities on behalf of a person as transferor of the securities if the document states that the person is the transferor of the securities and purports to have been stamped with the dealer’s stamp as the transferor’s broker. Unauthorised execution of transfer “122pc. Sections 122pd to 122pk, inclusive, apply where: (a) a dealer executes a document of transfer of securities (in this Division called the ‘transferred securities’) on behalf of a person (in this Division called the ‘transferor’) as transferor of the securities; and (b) apart from the effect of paragraph 194 (3) (a) of the Companies Act 1981, the transferor did not authorise the execution (in this Division called the ‘unauthorised execution’) of the document. Claim by transferor “122pd. If, as a result of the unauthorised execution, the transferor suffers loss in respect of any of the transferred securities, the transferor may make a claim in respect of the loss. Claim by transferee or sub-transferee “122pe. (1) If, as a result of the unauthorised execution, a person, being: (a) in any case—the transferee in relation to the document; or (b) if the transferee in relation to the document has disposed of any of the transferred securities—a successor in title of that transferee to any of the transferred securities; suffers loss in respect of any of the transferred securities, the person may make a claim in respect of that loss. “(2) A person is not entitled to make a claim under this section if the person: (a) had actual knowledge that the transferor did not in fact authorise the execution; or (b) is an excluded person in relation to the dealer. How and when claim may be made “122pf. (1) A claim shall be in writing and shall be served on the Corporation within 6 months after the day on which the claimant first became aware that the claimant had suffered loss as a result of the unauthorised execution. “(2) A claim that is not made within the period referred to in subsection (1) is barred unless the Board otherwise determines. How claim is to be satisfied “122pg. (1) Where the Board is satisfied that a claimant under section 122pd or 122pe is entitled to make the claim, the Corporation shall allow the claim. “(2) If the Corporation allows the claim and the claimant has, as a result of the unauthorised execution, ceased to hold some or all of the transferred securities, the Corporation shall: (a) subject to paragraph (b), supply to the claimant securities of the same kind and number as those of the transferred securities that the claimant has so ceased to hold; or (b) if the Board is satisfied that it is not practicable for the Corporation to obtain such securities, or to obtain such securities within a reasonable time—pay to the claimant the amount that, as at the time when the Board decides that it is so satisfied, is the actual pecuniary loss suffered by the claimant, in respect of the transferred securities, as a result of the unauthorised execution (other than loss suffered as mentioned in subsection (3)). “(3) If the Corporation allows the claim, it shall pay to the claimant the amount that, as at the time when the claim is allowed, or the Board decides as mentioned in paragraph (2) (b), as the case requires, is the actual pecuniary loss suffered by the claimant, as a result of the unauthorised execution, in respect of payments or other benefits: (a) in any case—to which the claimant would have become entitled, as the holder of such of the transferred securities as the claimant has, as a result of the unauthorised execution, ceased to hold, if the claimant had continued to hold the securities concerned until that time; or (b) if the claim was made under section 122pe—that the claimant has received as holder of any of the transferred securities. “(4) For the purposes of this section, where securities are purportedly transferred from a person to another person, the first-mentioned person shall be taken to cease to hold, and the other person shall be taken to hold, the securities even if the other person did not by virtue of the transfer get a good title to the securities. Discretionary further compensation to transferor “122ph. (1) If the Corporation allows a claim made under section 122pd and the Board is satisfied that the supply of securities, or the payment of money, or both, as the case requires, to the claimant in accordance with section 122pg will not adequately compensate the claimant in respect of a pecuniary or other gain that the claimant might, if the claimant had continued to hold the transferred securities, have made but did not in fact make, the Board may determine in writing that there be paid to the claimant in respect of that gain a specified amount that the Board considers to be fair and reasonable in all the circumstances. “(2) If a determination is made under subsection (1), the Corporation shall pay to the claimant the amount specified in it. Nexus between dealer and Territory “122pj. Neither of sections 122pd and 122pe entitles a person to make a claim unless the dealer was on the day of the unauthorised execution a member of a participating exchange and: (a) if on that day the dealer was carrying on (whether on his, her or its own account or in partnership) a business of dealing in securities— that business was carried on in the Territory; or (b) otherwise—the last business of dealing in securities that the dealer carried on (whether on his, her or its own account or in partnership) before that day was carried on in the Territory. Preventing double recovery “122pk. If: (a) a provision of a law of a participating State or participating Territory that corresponds with section 122pd or 122pe entitles a person to make a claim in respect of loss; and (b) the Corporation allows the claim; the Corporation shall not allow a claim that that section entitles the person to make in respect of that loss.”. No claim in certain other cases 36. Section 122v of the Principal Act is amended by omitting from paragraph (2) (b) “if”. Substitution of heading 37. The heading to Division 8 of Part IXa of the Principal Act is repealed and the following heading is substituted: “Division 8—Claims generally”. 38. Section 122yd of the Principal Act is repealed and the following section is substituted: Application of Fund in respect of certain claims “122yd. (1) The Corporation: (a) may buy securities in order to comply with subsection 122k (2) or 122m (2), paragraph 122pg (2) (a) or subsection 122r (3); and (b) may pay money out of the Fund for the purpose of so buying securities or for any other purpose connected with complying with that subsection or paragraph. “(2) Securities bought by the Corporation as mentioned in subsection (1) form part of the Fund until they are supplied in accordance with this Part to a claimant or are sold in accordance with subsection (3). (a) the Board: (i) makes in relation to a claim in respect of a purchase of securities a determination under section 122n; (ii) decides that it is not practicable for the Corporation to obtain, or to obtain within a reasonable time, securities in order to comply with paragraph 122pg (2) (a) in relation to a claim; or (iii) makes in relation to a claim a determination under subsection 122s (1); and (b) the Corporation has, before the making of the determination or decision, bought securities in order to: (i) supply to the claimant settlement documents in relation to the purchase; (ii) comply with paragraph 122pg (2) (a) in relation to the claim; or (iii) supply under subsection 122r (3), in respect of the claim, securities or documents of title to securities; as the case may be; the Corporation shall, as soon as practicable after the making of the determination or decision, sell the securities so bought and pay the proceeds of sale into the Fund. ‘claim’ means a claim under Division 6, 6a or 7.”. Arbitration of amount of cash settlement of certain claims 39. Section 122yh of the Principal Act is amended by omitting paragraph (1) (a) and substituting the following paragraph: “(a) section 122n or 122pg or subsection 122s (1) or (2) requires the Corporation to pay to a person the amount that was at a particular time the amount of the actual pecuniary loss suffered by the person in respect of a particular matter; and”. Subrogation of Corporation to claimant’s rights etc. 40. Section 122za of the Principal Act is amended: (a) by omitting from subsections (1) and (2) “shall be deemed to be” and substituting “is”; (b) by inserting after subsection (1) the following subsection: “(1a) Where the Corporation allows a claim made under Division 6a in respect of loss suffered, in respect of securities, because of an unauthorised execution of a document, the Corporation is subrogated to all the rights and remedies that the claimant has in relation to the securities because of the unauthorised execution.”; (c) by omitting from subsection (2) “Board” and substituting “Corporation”; (d) by omitting from subsection (3) “to be deemed to be”; (e) by omitting from paragraph (3) (a) “subject-matter” and substituting “subject matter”; (f) by inserting in subsection (4) “, 6a” after “6”. Instalment payments 41. Section 122zd of the Principal Act is amended by inserting in subsection (2) “, 6a” after “6”. PART 8—PARTICIPANTS IN THE SECURITIES AND FUTURES INDUSTRIES Division 1—Amendments of Securities Industry Act 19802 42. After section 3 of the Principal Act the following heading and section are inserted: “PART Ia—INTERPRETATION Effect of this Part “3a. The provisions of this Part have effect for the purposes of this Act, except so far as the contrary intention appears in this Act.”. 43. Section 4 of the Principal Act is amended: (a) by omitting “subsection (3)” from the definitions of “recognised dealer” and “recognised investment adviser” in subsection (1) and substituting “section 6g”; (b) by omitting from subsection (1) the definitions of “dealer”, “exempt dealer”, “investment adviser”, “licence” and “recognised licensee” and substituting the following definitions: “ ‘dealer’ means: (a) a person who carries on a securities business; or (b) 2 or more persons who together carry on a securities business; ‘exempt dealer’ has the meaning given by section 6c; ‘investment adviser’ means a person who carries on, or 2 or more persons who together carry on, an investment advice business; ‘licence’ means a dealers licence or an investment advisers licence; ‘recognised licensee’ means a recognised dealer or a recognised investment adviser and, in relation to a recognised licence, means the person who holds the recognised licence;”; (c) by omitting from subsection (1) the definitions of “dealer’s representative”, “dealer’s representatives licence”, “investment representative”, “investment representatives licence”, “recognised dealer’s representative”, “recognised investment representative” and “representatives licence”; (d) by inserting in subsection (1) the following definitions: “ ‘Australian company law’ means the Companies Act 1981 or the provisions of: (a) a previous law of the Territory; or (b) a law, or a previous law, of a State or of another Territory; that correspond with that Act; ‘banning order’ means an order made under section 62g and in force under Division 5 of Part IV; ‘condition’, in relation to a licence, means a condition or restriction to which the licence is subject, or will be subject, as the case requires; ‘eligible money market dealer’ means a body corporate in respect of which a declaration is in force under paragraph 97 (7) (b) of the Companies Act 1981; ‘event’ includes any happening, circumstance or state of affairs; ‘exempt investment adviser’ has the meaning given by section 6c; ‘exempt public authority’ means a body corporate that is incorporated within Australia and is a public authority or an instrumentality or agency of the Crown in right of the Commonwealth or of a State or Territory; ‘externally-administered body corporate’ means a body corporate: (a) that is being wound up under an Australian company law; (b) in respect of property of which a receiver, or a receiver and manager, has been appointed under an Australian company law (whether or not by a court) and is acting; (c) that is under official management under an Australian company law; or (d) that has, whether in the Territory or elsewhere, entered into a compromise or arrangement with its creditors that is still in operation; ‘have’, in relation to information, includes be in possession of the information; ‘hold’, in relation to a person, in relation to a document that is, or purports to be, a copy of a licence, means have in the person’s possession; ‘included’, in relation to an official list, has the meaning given by section 6d; ‘information service’ means: (a) a broadcasting service; (b) an interactive or broadcast videotext or teletext service or a similar service; (c) an online database service or a similar service; or (d) any other prescribed service; ‘invalid authority’ has the meaning given by subsection 6f (2); ‘investment advice business’ has the meaning given by section 6e; ‘licensee’ means a person who holds a licence and, in relation to a licence, means the person who holds the last-mentioned licence; ‘liquidator’ includes a provisional liquidator; ‘lodge’ means lodge with the Commission; ‘non-dealer’ means a person who is neither a dealer nor one of 2 or more persons who together constitute a dealer; ‘proper authority’ has the meaning given by section 6f; ‘publish’ includes issue; ‘recognised banning order’ means a banning order within the meaning of a corresponding law of a participating State or participating Territory; ‘recognised licence’ means, subject to section 6g, a licence within the meaning of a corresponding law of a participating State or participating Territory; ‘relevant agreement’ means an agreement, arrangement or understanding: (a) whether formal or informal or partly formal and partly informal; (b) whether written or oral or partly written and partly oral; and (c) whether or not having legal or equitable force and whether or not based on legal or equitable rights; ‘responsible officer’, in relation to a body corporate that applies for a licence, means an officer of the body who would perform duties in connection with the holding of the licence; ‘securities adviser’ means a dealer, an investment adviser or a representative of a dealer or of an investment adviser; ‘securities business’ has the meaning given by section 6j; ‘securities law’ means a provision of, or a provision of a law of a participating State or participating Territory that corresponds with a provision of: (a) this Act; (b) the Companies (Acquisition of Shares) Act 1980; (c) Part IV of the Companies Act 1981; or (d) section 552 of the Companies Act 1981; ‘securities recommendation’ means a recommendation with respect to securities or a class of securities, whether made expressly or by implication; ‘securities report’ means an analysis or report about securities; ‘serious fraud’ means an offence involving fraud or dishonesty, being an offence: (a) against a law of the Commonwealth, of a State or of a Territory, or against any other law; and (b) punishable by imprisonment for life or for a period, or maximum period, of at least 3 months; ‘suspend’ has a meaning affected by subsections 62d (7) and (8); ‘transmission’ means a transmission, by means of electric or electromagnetic energy, of: (a) sounds, including speech and music; (b) visual images; (c) signals for the communication, whether as between persons and persons, persons and things or things and things, of any matter otherwise than in the form of sounds or visual images; or (d) signals for the actuation or control of machinery or apparatus;”; (e) by omitting subsections (3), (4), (5) and (5a). 44\. After section 6 of the Principal Act the following sections are inserted: Businesses of a particular kind “6a. A reference to a business of a particular kind includes a reference to a business of that kind that is part of, or is carried on in conjunction with, any other business. Carrying on a business: alone or together with others “6b. A reference to a person carrying on a business, or a business of a particular kind, is a reference to the person carrying on a business, or a business of that kind, whether alone or together with any other person or persons. Exempt dealers and exempt investment advisers “6c. (1) A person is both an exempt dealer and an exempt investment adviser if the person is: (a) an eligible money market dealer; or (b) an exempt public authority. “(2) Subject to this section, a person is an exempt dealer or an exempt investment adviser if the person is a dealer or investment adviser, as the case may be, but does not carry on a securities business or an investment advice business, as the case may be, except: (a) as an official receiver or trustee within the meaning of the Bankruptcy Act 1966; (b) as a receiver, receiver and manager, or liquidator, appointed by a court; (c) as a person appointed by a court to carry on the business concerned; (d) by virtue of the person’s powers, as Public Trustee, under the Public Trustee Ordinance 1985 or a prescribed law of a State or another Territory; (e) as a receiver, receiver and manager, or liquidator, appointed otherwise than by a court; (f) as an official manager or deputy official manager of a body corporate; (g) as a trustee or other person administering a compromise or arrangement between a body corporate and any other person or persons; (h) as a personal representative of a dead dealer or investment adviser, as the case may be; or (j) in such other capacity, or in such other circumstances, as are prescribed. “(3) A body corporate that carries on, or holds itself out as carrying on, a business of dealing in shares in, or debentures of, that body is an exempt dealer if it neither carries on, nor holds itself out as carrying on, a business of dealing in any other securities. “(4) A person who carries on a securities business or investment advice business in a capacity referred to in any of paragraphs (2) (e) to (h), inclusive, shall be deemed for the purposes of subsection (2) to carry on the business otherwise than in that capacity unless there is in force under subsection (5) an approval of the person carrying on the business in that capacity. “(5) The Commission may, on application by a person and after having regard to: (a) the prescribed matters (if any); and (b) such matters as it thinks appropriate; by writing approve of the person carrying on a specified securities business or investment advice business in a specified capacity, being a capacity referred to in any of paragraphs (2) (e) to (h), inclusive. “(6) A person who carries on a securities business or investment advice business as a personal representative of a dead dealer or investment adviser, as the case may be, shall be deemed for the purposes of subsection (2) to stop carrying on that business as such a personal representative: (a) at the end of 6 months after the death of the dealer or investment adviser; (b) on being discharged or removed as a personal representative of the dealer or investment adviser; or (c) on the final distribution of the estate of the dealer or investment adviser; whichever happens first. “(7) A person is not an exempt dealer or an exempt investment adviser except as provided by this section. Inclusion in official list “6d. A reference to a body corporate or other person included in an official list of a body corporate is a reference to: (a) a body corporate or other person whose name is included in that official list; or (b) a body corporate or other person whose name has been changed but whose previous name was included in that official list immediately before the change and is still so included. Investment advice business “6e. (1) A reference to an investment advice business, in relation to a person, is a reference to: (a) a business of advising other persons about securities; or (b) a business in the course of which the person publishes securities reports. “(2) The remaining provisions of this section apply for the purposes of determining: (a) whether or not a person carries on an investment advice business; (b) what constitutes an investment advice business carried on by a person; and (c) whether or not a person holds himself, herself or itself out to be an investment adviser. “(3) If the person is a body corporate authorised by a law of a State or Territory to take in its own name a grant of probate of the will, or a grant of letters of administration of the estate, of a dead person, an act done by the first-mentioned person shall be disregarded. “(4) If the person is a solicitor or accountant in public practice as such, an act that the person does shall be disregarded if it is merely incidental to the practice of his or her profession. “(5) The fact that the person advises other persons about securities, or publishes securities reports, in some or all of the following circumstances shall be disregarded: (a) in a newspaper or periodical: (i) of which the person is the proprietor or publisher; and (ii) that is generally available to the public otherwise than only on subscription; (b) in the course of, or by means of, transmissions that: (i) the person makes by means of an information service; or (ii) are made by means of an information service that the person owns, operates or makes available; and are generally available to the public; (c) in sound recordings, video recordings, or data recordings, that the person makes generally available to the public in either or both of the following ways: (i) by supplying copies of them to the public; (ii) by causing the sound recordings to be heard by, the video recordings to be seen and heard by, or the contents of the data recordings to be displayed or reproduced for, the public, as the case may be. “(6) Subsection (5) does not apply in relation to a newspaper or periodical, or transmissions, sound recordings, video recordings or data recordings, as the case may be, whose sole or principal purpose is to advise other persons about securities or to publish securities reports. “(7) The fact that the person holds himself, herself or itself out as advising other persons, or publishing securities reports, as mentioned in subsection (5) shall be disregarded. “(8) An act that the person does: (a) while employed by, or acting for or by arrangement with, another person; (b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and (c) in connection with an investment advice business carried on by the other person; Proper authority; invalid authority “6f. (1) A reference, in relation to a person (in this subsection called the ‘representative’), to a proper authority from a person (in this subsection called the ‘principal’) who holds a licence is a reference to a copy of the licence on which are endorsed: (a) a statement: (i) certifying the copy to be a true copy of the licence; (ii) stating that the representative is employed by, or acts for or by arrangement with, the principal; and (iii) signed by the principal; and (b) in relation to each licensee (if any), other than the principal, of whom the representative is a representative, a statement that: (i) sets out the name of the licensee; (ii) states that the representative is employed by, or acts for or by arrangement with, the licensee; (iii) states that the licensee consents to the representative being employed by, or acting for or by arrangement with, the principal; and (iv) is signed by the licensee. “(2) A reference, in relation to a person (in this subsection called the ‘representative’), to an invalid authority from a person (in this subsection called the ‘principal’) is a reference to a document: (a) on which is endorsed a statement: (i) stating that the representative is employed by, or acts for or by arrangement with, the principal; and (ii) signed by the principal; and (b) that purports to be a copy of a licence and to be a proper authority of the representative from the principal, but is not in fact such a proper authority; whether or not: (c) the principal is, or has ever been, a licensee; or (d) the document is in fact a copy of a licence that exists or has ever existed. “(3) For the purposes of this section, a statement is signed by a person if, and only if, it is signed: (a) if the person is a natural person—by the person; or (b) if the person is a body corporate: (i) by 3 director or secretary; or (ii) by an executive officer who is authorised to sign the statement. ‘licence’ includes a recognised licence; Recognised licensee must be connected with State or Territory concerned “6g. Where a person holds a dealers licence or investment advisers licence under the provisions of a law of a participating State or participating Territory that correspond with Part IV, the person is not a recognised dealer or recognised investment adviser, as the case may be, and the licence is not a recognised licence, unless: (a) if the person is a natural person who is not a partner in a firm— the person is ordinarily resident in that State or Territory; (b) if the person is a natural person who is a partner in a firm—the firm’s principal place of business is in that State or Territory; or (c) if the person is a body corporate—the body: (i) is incorporated in that State or Territory; or (ii) is incorporated outside Australia and the external Territories and is registered under the provisions of a law of that State or Territory that correspond with Division 5 of Part XIII of the Companies Act 1981. Representatives “6h. (1) Subject to subsection (2), a person is a representative of another person if, and only if, the first-mentioned person is employed by, or acts for or by arrangement with, the other person in connection with a securities business or investment advice business carried on by the other person. “(2) Except for the purposes of paragraph 6f (1) (b): (a) a person who holds a proper authority from a licensee or recognised licensee is a representative of the licensee or recognised licensee; and (b) a person who holds an invalid authority from another person is a representative of the other person. “(3) Subject to subsection (4), a person does an act, or engages in conduct, as a representative of another person if, and only if, the first-mentioned person does the act, or engages in the conduct: (a) in connection with a securities business or investment advice business carried on by the other person; (b) while the first-mentioned person is a representative of the other person; (c) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and (d) otherwise than in the course of work of a kind ordinarily done by accountants, clerks or cashiers. “(4) Except for the purposes of Division 4 of Part IV, a person who holds himself, herself or itself out to be a representative of another person does an act as a representative of the other person. Securities business “6j. (1) A securities business is a business of dealing in securities. “(2) Subsections (4), (5) and (6) apply for the purposes of determining: (a) whether or not a person carries on, or holds himself, herself or itself out as carrying on, a securities business; and (b) what constitutes such a business carried on by a person. “(3) Subsection (6) also applies for the purposes of determining whether or not a person deals in securities. “(4) An act done on behalf of the person by the holder of a dealers licence, an exempt dealer, or a recognised dealer shall be disregarded. “(5) An act that the person does: (a) while employed by, or acting for or by arrangement with, a dealer; (b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the dealer; and (c) in connection with a securities business carried on by the dealer; shall be disregarded. “(6) An act or acts done by the person that constitutes or together constitute, for the purposes of: (a) the Futures Industry Act 1986; or (b) the provisions of a law of a participating State or participating Territory that correspond with that Act; a dealing by the person in a futures contract, shall be disregarded.”. Heading to Part IV 45. The heading to Part IV of the Principal Act is omitted and the following heading is substituted: “PART IV—PARTICIPANTS IN THE SECURITIES INDUSTRY”. 46. Sections 43 to 50, inclusive, of the Principal Act are repealed and the following heading and sections are substituted: “Division 1—Dealers and investment advisers Dealers “43\. A person shall not carry on, or hold himself, herself or itself out as carrying on, a securities business unless the person holds a dealers licence or is a recognised dealer or an exempt dealer. Investment advisers “45\. A person shall not: (a) carry on an investment advice business; or (b) hold himself, herself or itself out to be an investment adviser; unless the person is a licensee, a recognised licensee or an exempt investment adviser. Application for a licence “47\. (1) A person may apply to the Commission, in the prescribed form and manner, for a dealers licence or an investment advisers licence. “(2) The Commission may require an applicant for a licence to give the Commission such further information in relation to the application as the Commission thinks necessary. “(3) Subsections (1) and (2) of this section, and sections 48 to 48b (inclusive), as in force at and after the commencement of section 46 of the Co-operative Scheme Legislation Amendment Act 1989 apply in relation to an application for a dealers licence or for an investment advisers licence that: (a) is made at or after that commencement; or (b) was made before that commencement but, as at that commencement, had been neither granted nor refused. Grant of licence to natural person “48\. (1) This section applies where a natural person applies for a licence. (a) the application was made in accordance with section 47; (b) the person is not an insolvent under administration; (c) it is satisfied that the person’s educational qualifications and experience are adequate having regard to the nature of the duties of a holder of a licence of the kind applied for; (d) it has no reason to believe that the person is not of good fame and character; and (e) it has no reason to believe that the person will not perform those duties efficiently, honestly and fairly. “(4) In determining whether or not it has reason to believe as mentioned in paragraph (2) (d) or (e), the Commission shall have regard to any conviction of the person, during the 10 years ending on the day of the application, of serious fraud. Grant of licence to body corporate “48a. (1) This section applies where a body corporate applies for a licence. (a) the application was made in accordance with section 47; (b) the applicant is not an externally-administered body corporate; (c) the Commission is satisfied that the educational qualifications and experience of each responsible officer of the applicant are adequate having regard to the duties that the officer would perform in connection with the holding of the licence; and (d) the Commission has no reason to believe that the applicant will not perform efficiently, honestly and fairly the duties of a holder of a licence of the kind applied for. “(4) In determining whether or not it has reason to believe as mentioned in paragraph (2) (d), the Commission shall have regard, in relation to each responsible officer of the applicant, to: (a) whether or not the officer is an insolvent under administration; (b) any conviction of the officer, during the 10 years ending on the day of the application, of serious fraud; (c) any reason the Commission has to believe that the officer is not of good fame and character; and (d) any reason the Commission has to believe that the officer will not perform efficiently, honestly and fairly the duties that the officer would perform in connection with the holding of the licence. Effect of certain provisions “48b. (1) Sections 48 and 48a apply subject to sections 62n, 62p and 62r and the regulations. “(2) Nothing in subsection 48 (4) or 48a (4) limits the matters to which the Commission may have regard: (a) in deciding on an application for a licence; or (b) in connection with performing or exercising any other function or power under this Part.”. Conditions of licence 47. Section 51 of the Principal Act is amended: (a) by omitting from paragraph (1) (b) and subsection (7) “62” and substituting “62p”; (b) by omitting from paragraph (2) (c) “and” (last occurring); (c) by adding at the end of subsection (2) the following paragraphs: “; (e) may include conditions about what the holder of a licence is to do, by way of supervision and otherwise, in order to prevent the holder’s representatives from contravening: (i) a securities law; or (ii) another condition of the licence; and (f) may include conditions about what the holder of a licence is to do to ensure that each representative of the holder has adequate qualifications and experience having regard to what the representative will do on the holder’s behalf in connection with a securities business or investment advice business carried on by the holder.”. Licensee to notify breach of licence condition 48. Section 52 of the Principal Act is amended by omitting subsections (1) and (2) and substituting the following subsection: “(1) Within one day after the happening of an event constituting a contravention of a condition of a licence, the licensee shall give to the Commission a written notice setting out particulars of the event. Penalty: $5,000 or imprisonment for 1 year, or both.”. Register of Licence Holders 49. Section 54 of the Principal Act is amended by omitting subsections (2) and (3) and substituting the following subsections: “(1a) The Commission shall include in the Register of Licence Holders, in relation to each licence, a copy of: (a) the licence; and (b) each instrument that imposes conditions on the licence, or revokes or varies conditions of the licence, after the licence is granted. “(2) The Commission shall enter in the Register of Licence Holders, in relation to each licence: (a) the name of the licensee; (b) if the licensee is a body corporate—the name of each director, and of each secretary, of the body; (c) the day on which the licence was granted; (d) in relation to each business to which the licence relates: (i) the address of the principal place of business at which the business is carried on; (ii) the addresses of the other places (if any) at which the business is carried on; and (iii) if the business is carried on under a name or style other than the name of the holder of the licence—that name or style; (e) particulars of any suspension of the licence; and (f) such other matters (if any) as are prescribed. “(3) Where a person no longer holds a particular licence, the Commission shall remove from the Register of Licence Holders the documents included in it, and the particulars entered in it, in relation to that licence.”. 50. Sections 55 and 56 of the Principal Act are repealed and the following sections are substituted: Notifying change in particulars “55\. Within 21 days after: (a) the holder of a dealers licence ceases to carry on the business to which the licence relates; (b) the holder of an investment advisers licence ceases to act as, or to hold himself, herself or itself out to be, an investment adviser; or (c) there is a change in a matter particulars of which are required by virtue of paragraph 54 (2) (a), (b), (d) or (f) to be entered, in relation to a licence, in the Register of Licence Holders; the holder of the licence shall lodge written particulars, in the prescribed form, of that fact, or of that change, as the case may be. Annual statement of licensee “56\. (1) A person who is or has been a licensee shall lodge, in respect of each year or part of a year during which the licence is or was in force, a statement in the prescribed form that complies with this section. “(2) The statement shall set out the number of persons: (a) who, when the statement is lodged, hold; or (b) who, when the person last ceased to be a licensee, held; as the case may be, proper authorities from the person. “(3) The statement shall also contain such information as is prescribed.”. When annual statement to be lodged 51. Section 57 of the Principal Act is amended: (a) by omitting from paragraph (b) “granted; and” and substituting “granted.”; (b) by omitting paragraph (c). 52. Sections 59, 60, 61 and 62 of the Principal Act are repealed and the following Divisions are substituted: “Division 2—Agreements with unlicensed persons Certain persons not clients “59a. A reference in this Division to a client does not include a reference to a person who is: (a) a dealer; (b) an investment adviser; or (c) one of 2 or more persons who together constitute a dealer or investment adviser. Agreements with unlicensed persons “59b. Where, during a period when a person (in this Division called the ‘non-licensee’): (a) in contravention of section 43, carries on, or holds himself, herself or itself out as carrying on, a securities business; or (b) in contravention of section 45, carries on an investment advice business or holds himself, herself or itself out to be an investment adviser; the non-licensee and a client of the non-licensee enter into an agreement that: (c) constitutes, or relates to, a dealing or proposed dealing in securities; or (d) relates to advising the client about securities, or giving the client securities reports; sections 59c to 59l, inclusive, apply, whether or not anyone else is a party to the agreement. Client may give notice of rescission “59c. (1) Subject to this section, the client may, whether before or after completion of the agreement, give to the non-licensee a written notice stating that the client wishes to rescind the agreement. “(2) The client may only give a notice under this section within a reasonable period after becoming aware of the facts entitling the client to give the notice. “(3) The client is not entitled to give a notice under this section if the client engages in conduct by engaging in which the client would, if the entitlement so to give a notice were a right to rescind the agreement for misrepresentation by the non-licensee, be taken to have affirmed the agreement. “(4) The client is not entitled to give a notice under this section if, within a reasonable period before the agreement was entered into, the non-licensee informed the client (whether or not in writing) that: (a) the non-licensee did not hold a dealers licence; or (b) the non-licensee did not hold a dealers licence and did not hold an investment advisers licence; as the case requires. “(5) If, at a time when a dealers licence or investment advisers licence held by the non-licensee was suspended, the non-licensee informed the client that the licence was suspended, the non-licensee is to be taken for the purposes of subsection (4) to have informed the client at that time that the non-licensee did not hold a dealers licence or investment advisers licence, as the case may be. “(6) A reference in subsection (4) or (5) to a dealers licence or investment advisers licence is a reference to a dealers licence or investment advisers licence, as the case may be, granted under this Part or under the provisions of a law of a participating State or participating Territory that correspond with this Part. “(7) None of subsections (2), (3) and (4) limits the generality of either of the others. “(8) Subject to this section, the client may give a notice under this section whether or not: (a) the notice will result under section 59d in rescission of the agreement; or (b) the Court will, if the notice so results, be empowered to make a particular order, or any order at all, under section 59f. Effect of notice under section 59c “59d. A notice given under section 59c rescinds the agreement unless rescission of the agreement would prejudice a right, or an estate in property, acquired by a person (other than the non-licensee) in good faith, for valuable consideration and without notice of the facts entitling the client to give the notice. Client may apply to Court for partial rescission “59e. (1) If the client gives a notice under section 59c but the notice does not rescind the agreement because rescission of it would prejudice a right or estate of the kind referred to in section 59d, the client may, within a reasonable period after giving the notice, apply to the Court for an order under subsection (4) of this section. “(2) The Court may extend the period for making an application under subsection (1). “(3) If an application is made under subsection (1), the Court may make such orders expressed to have effect until the determination of the application as it would have power to make if the notice had rescinded the agreement under section 59d and the application were for orders under section 59f. “(4) On an application under subsection (1), the Court may make an order: (a) varying the agreement in such a way as to put the client in the same position, as nearly as can be done without prejudicing such a right or estate acquired before the order is made, as if the agreement had not been entered into; and (b) declaring the agreement to have had effect as so varied at and after the time when it was originally made. “(5) If the Court makes an order under subsection (4), the agreement shall be taken for the purposes of section 59f to have been rescinded under section 59d. “(6) An order under subsection (4) does not affect the application of section 59h or 59k in relation to the agreement as originally made or as varied by the order. Court may make consequential orders “59f. (1) Subject to subsection (2), on rescission of the agreement under section 59d, the Court, on the application of the client or the non-licensee, may make such orders as it would have power to make if the client had duly rescinded the agreement for misrepresentation by the non-licensee. “(2) The Court is not empowered to make a particular order under subsection (1) if the order would prejudice a right, or an estate in property, acquired by a person (other than the non-licensee) in good faith, for valuable consideration and without notice of the facts entitling the client to give the notice. Agreement unenforceable against client “59g. (1) This section: (a) applies while both of the following are the case: (i) the client is entitled to give a notice under section 59c; (ii) a notice so given will result under section 59d in rescission of the agreement; and (b) applies after the agreement is rescinded under section 59d; “(2) The non-licensee is not entitled, as against the client: (a) to enforce the agreement, whether directly or indirectly; or (b) to rely on the agreement, whether directly or indirectly and whether by way of defence or otherwise. Non-licensee not entitled to recover commission “59h. (1) Without limiting the generality of section 59g, this section: (a) applies while the client is entitled to give a notice under section 59c; and (b) applies after the client so gives a notice, even if the notice does not result under section 59d in rescission of the agreement; “(2) The non-licensee is not entitled to recover by any means (including, for example, set-off or a claim on a quantum meruit) any brokerage, commission or other fee for which the client would, but for this section, have been liable to the non-licensee under or in connection with the agreement. Onus of establishing non-application of section 59g or 59h “59j. For the purposes of determining in a proceeding whether or not the non-licensee is, or was at a particular time, entitled as mentioned in subsection 59g (2) or 59h (2), it shall be presumed, unless the contrary is proved, that section 59g or 59h, as the case may be, applies, or applied at that time, as the case may be. Client may recover commission paid to non-licensee “59k. (1) Without limiting the generality of section 59f, if the client gives a notice under section 59c, the client may, even if the notice does not result under section 59d in rescission of the agreement, recover from the non-licensee as a debt the amount of any brokerage, commission or other fee that the client has paid to the non-licensee under or in connection with the agreement. “(2) The Commission may, if it considers that it is in the public interest to do so, bring an action under subsection (1) in the name of, and for the benefit of, the client. Remedies under this Division additional to other remedies “59l. The client’s rights and remedies under this Division are additional to, and do not prejudice, any other right or remedy of the client. “Division 3—Representatives Representatives of dealers “60a. A natural person shall not do an act as a representative of a dealer (other than an exempt dealer) unless: (a) the dealer holds a dealers licence or is a recognised dealer; and (b) the person holds a proper authority from the dealer. Representatives of investment advisers “60b. A natural person shall not do an act as a representative of an investment adviser (other than an exempt investment adviser) unless: (a) the investment adviser: (i) is also a dealer and either holds a dealers licence or is a recognised dealer; or (ii) holds an investment advisers licence or is a recognised investment adviser; and (b) the person holds a proper authority from the investment adviser. Defence “60c. It is a defence to a prosecution for a contravention of section 60a or 60b constituted by an act done by a person as a representative of another person if it is proved that: (a) but for the revocation of, or the making under section 62d or a provision of a law of a participating State or participating Territory that corresponds with that section of an order relating to, a licence or recognised licence held by the other person, the act would not have been such a contravention; (b) when he or she did the act, the first-mentioned person: (i) believed in good faith that the other person held the licence or recognised licence; and (ii) was unaware of the revocation or order; and (c) in all the circumstances it was reasonable for the first-mentioned person so to believe and to be unaware of the revocation or order. Body corporate not to act as representative “60d. A body corporate shall not do an act as a representative of a dealer or of an investment adviser. Licensee to keep register of holders of proper authorities “60e. (1) A licensee shall establish a register of the persons who hold proper authorities from the licensee and shall keep it in accordance with this section. “(2) The register shall be in writing or in such other form as the Commission approves. “(3) The register shall contain, in relation to each person (if any) who holds a proper authority from the licensee: (a) a copy of the proper authority; (b) the person’s name; (c) the person’s current residential address; (d) unless the person’s current business address is the same as the licensee’s—the person’s current business address; and (e) any other prescribed information. “(4) A copy of a proper authority of a person from the licensee that subsection (3) provides for the register to contain shall be included in the register within 2 business days after the person begins to hold that proper authority. “(5) Information that subsection (3) provides for the register to contain in relation to a person shall be entered in the register within 2 business days after: (a) the person begins to hold a proper authority from the licensee; or (b) the licensee receives the information; whichever happens later. “(6) Within 2 business days after a person ceases to hold a proper authority from the licensee, the licensee shall: (a) in any case: (i) include, in a part of the register separate from the part in which copies of proper authorities are included under subsection (4); and the copy of the proper authority that was included in the last-mentioned part; and (b) unless, at the end of those 2 business days, the person again holds a proper authority from the licensee: (i) enter, in a part of the register separate from the part in which information is entered under subsection (5); and the information that has been entered in the last-mentioned part in relation to the person. “(7) Information that has been entered under paragraph (6) (b) in a separate part of the register shall be deemed for the purposes of subsections (3) and (5) not to be contained or entered in the register. Licensee to notify Commission of location and contents of register “60f. (1) In this section: ‘register’, in relation to a licensee, means a register that the licensee keeps for the purposes of section 60e. “(2) Within 14 days after establishing a register, a licensee shall lodge written notice of where the register is kept. “(3) A licensee shall, as soon as practicable after changing the place where a register is kept, lodge written notice of the new place where the register is kept. “(4) Within 2 business days after the day on which a person begins to hold a particular proper authority from a licensee, the licensee shall, whether or not the person has previously held a proper authority from the licensee, lodge: (a) a copy of the first-mentioned proper authority; and (b) a written notice stating that the person began to hold that proper authority on that day. “(5) Within the period within which subsection 60e (5) requires a licensee to enter in a register information that the register must contain because of paragraph 60e (3) (b), (c), (d) or (e), the licensee shall lodge a written notice setting out the information and stating that the information has been, or is to be, entered in the register. “(6) Within 2 business days after a person ceases to hold a proper authority from a licensee, the licensee shall, unless at the end of those 2 business days the person again holds a proper authority from the licensee, lodge a written notice stating that the person has ceased to hold such a proper authority. Inspection and copying of register “60g. (1) In this section: ‘register’, in relation to a licensee, means a register that the licensee keeps for the purposes of section 60e. “(2) a licensee shall ensure that a register is open for inspection without charge. “(3) Where a person requests a licensee in writing to give the person a copy of the whole, or of a specified part, of a register, the licensee shall comply with the request within 2 business days after: (a) if the licensee requires the person to pay for the copy an amount of not more than the prescribed amount—receiving the amount from the person; or (b) in any other case—receiving the request. Disclosure to client by representative “60h. a person (in this section called the ‘representative’) shall not do as a representative of another person (in this section called the ‘principal’) an act by virtue of which the principal deals in securities with a non-dealer on the principal’s own account unless the representative has informed the non-dealer that the principal is acting in the transaction as principal and not as agent. Commission may require production of authority “60j. (1) Where the Commission has reason to believe that a person: (a) holds a proper authority from a licensee or recognised licensee; or (b) has done an act as a representative of another person; then, whether or not the Commission knows who the licensee, recognised licensee or other person is, it may require the first-mentioned person to produce: (c) any proper authority from a licensee or recognised licensee; or (d) any invalid authority from a person; that the first-mentioned person holds. “(2) a person shall not, without reasonable excuse, refuse or fail to comply with a requirement under this section. Commission may give licensee information about representative “60k. (1) Where the Commission believes on reasonable grounds that: (a) a person (in this section called the ‘holder’) holds, or will hold, a proper authority from a licensee; (b) having regard to that fact, the Commission should give to the licensee particular information that the Commission has about the person; and (c) the information is true; the Commission may give the information to the licensee. “(2) Where the Commission gives information under subsection (1), the licensee or an officer of the licensee may, for a purpose connected with: (a) the licensee making a decision about what action (if any) to take in relation to the holder, having regard to, or to matters including, the information; or (b) the licensee taking action pursuant to such a decision; or for 2 or more such purposes, and for no other purpose, give to another person, make use of, or make a record of, some or all of the information. “(3) A person to whom information has been given, in accordance with subsection (2) or this subsection, for a purpose or purposes may, for that purpose or one or more of those purposes, and for no other purpose, give to another person, make use of, or make a record of, that information. “(4) Subject to subsections (2) and (3), a person shall not give to another person, make use of, or make a record of, information given by the Commission under subsection (1). “(5) A person has qualified privilege in respect of an act done by the person as permitted by subsection (2) or (3). “(6) A person to whom information is given in accordance with this section shall not: (a) give any of the information to a court; or (b) produce in a court a document that sets out some or all of the information; except: (c) for a purpose connected with: (i) the licensee making a decision about what action (if any) to take in relation to the holder, having regard to, or to matters including, some or all of the information; (ii) the licensee taking action pursuant to such a decision; or (iii) proving in a proceeding in that court that particular action taken by the licensee in relation to the holder was so taken pursuant to such a decision; or for 2 or more such purposes, and for no other purpose; (d) in a proceeding in that court, in so far as the proceeding relates to an alleged contravention of this section; (e) in a proceeding in respect of an ancillary offence relating to an offence against this section; or (f) in a proceeding in respect of the giving to a court of false information being or including some or all of the first-mentioned information. “(7) A reference in this section to a person taking action in relation to another person is a reference to the first-mentioned person: (a) taking action by way of making, terminating, or varying the terms and conditions of; or (b) otherwise taking action in relation to; a relevant agreement, in so far as the relevant agreement relates to the other person being employed by, or acting for or by arrangement with, the first-mentioned person in connection with a securities business or investment advice business carried on by the first-mentioned person. “(8) In this section: Holder of authority may be required to return it “60l. (1) Where a person holds a proper authority from a licensee but is neither employed by, nor authorised to act for or by arrangement with, the licensee, the licensee may, by writing given to the person, require the person to give the proper authority to the licensee within a specified period of not less than 2 business days. “(2) Where a person holds an invalid authority from another person, the other person may, by writing given to the first-mentioned person, require the first-mentioned person to give the invalid authority to the other person within a specified period of not less than 2 business days. “(3) A person shall not, without reasonable excuse, refuse or fail to comply with a requirement made of the person in accordance with subsection (1) or (2). “Division 4—Liability of principals for representatives’ conduct Conduct engaged in as a representative “61a. Where a person engages in conduct as a representative of another person (in this section called the ‘principal’), then, as between the principal and a third person (other than the Commission), the principal is liable in respect of that conduct in the same manner, and to the same extent, as if the principal had engaged in it. Liability where identity of principal unknown “61b. (1) This section applies for the purposes of a proceeding in a court where: (a) a person (in this section called the ‘representative’) engages in particular conduct while the person is a representative of 2 or more persons (in this section called the ‘indemnifying principals’); and (b) it is proved for the purposes of the proceeding that the representative engaged in the conduct as a representative of some person (in this section called the ‘unknown principal’) but it is not proved for those purposes who the unknown principal is. “(2) If only one of the indemnifying principals is a party to the proceeding, he, she or it is liable in respect of that conduct as if he, she or it were the unknown principal. “(3) If 2 or more of the indemnifying principals are parties to the proceeding, each of those 2 or more is liable in respect of that conduct as if he, she or it were the unknown principal. Liability of principals where act done in reliance on representative’s conduct “61c. (1) This section applies where: (a) at a time when a person (in this section called the ‘representative’) is a representative of only one person (in this section called the ‘indemnifying principal’) or of 2 or more persons (in this section called the ‘indemnifying principals’), the representative: (i) engages in particular conduct; or (ii) proposes, or represents that the representative proposes, to engage in particular conduct; (b) another person (in this section called the ‘client’) does, or omits to do, a particular act because the client believes at a particular time in good faith that the representative engaged in, or proposes to engage in, as the case may be, that conduct: (i) on behalf of some person (in this section called the ‘assumed principal’) whether or not identified, or identifiable, at that time by the client; and (ii) in connection with a securities business or investment advice business carried on by the assumed principal; and (c) it is reasonable to expect that a person in the client’s circumstances would so believe and would do, or omit to do, as the case may be, that act because of that belief; whether or not that conduct is or would be within the scope of the representative’s employment by, or authority from, any person. (a) subparagraph (1) (a) (i) applies; or (b) subparagraph (1) (a) (ii) applies and the representative engages in that conduct; then: (c) as between the indemnifying principal and the client or a person claiming through the client, the indemnifying principal is liable; or (d) as between any of the indemnifying principals and the client or a person claiming through the client, each of the indemnifying principals is liable; as the case may be, in respect of that conduct in the same manner, and to the same extent, as if he, she or it had engaged in it. “(3) Without limiting the generality of subsection (2), the indemnifying principal, or each of the indemnifying principals, as the case may be, is liable to pay damages to the client in respect of any loss or damage that the client suffers as a result of doing, or omitting to do, as the case may be, the act referred to in paragraph (1) (b). “(4) If: (a) there are 2 or more indemnifying principals; (b) 2 or more of them are parties (in this subsection called the ‘indemnifying parties’) to a proceeding in a court; (c) it is proved for the purposes of the proceeding: (i) that the representative engaged in that conduct as a representative of some person; and (ii) who that person is; and (d) that person is among the indemnifying parties; subsections (2) and (3) do not apply, for the purposes of the proceeding, in relation to the indemnifying parties other than that person. “61d. (1) Where it is proved, for the purposes of a proceeding in a court, that a person (in this subsection called the ‘representative’) engaged in particular conduct while the person was a representative of: (a) only one person (in this subsection called the ‘indemnifying principal’); or (b) 2 or more persons (in this subsection called the ‘indemnifying principals’); then, unless the contrary is proved for the purposes of the proceeding, it shall be presumed for those purposes that the representative engaged in the conduct as a representative of: (c) the indemnifying principal; or (d) as a representative of some person among the indemnifying principals; “(2) Where, for the purposes of establishing in a proceeding in a court that section 61c applies, it is proved that a person did, or omitted to do, a particular act because the person believed at a particular time in good faith that certain matters were the case, then, unless the contrary is proved for those purposes, it shall be presumed for those purposes that it is reasonable to expect that a person in the first-mentioned person’s circumstances would so believe and would do, or omit to do, as the case may be, that act because of that belief. No contracting out of liability for representative’s conduct “61e. (1) For the purposes of this section, a liability of a person: (a) in respect of conduct engaged in by another person as a representative of the first-mentioned person; or (b) arising under section 61c because another person has engaged in, proposed to engage in, or represented that the other person proposed to engage in, particular conduct; is a liability of the first-mentioned person in respect of the other person. “(2) Subject to this section, an agreement is void in so far as it purports to exclude, restrict or otherwise affect a liability of a person in respect of another person, or to provide for a person to be indemnified in respect of a liability of the person in respect of another person. “(3) Subsection (2) does not apply in relation to an agreement in so far as it: (a) is a contract of insurance; (b) provides for a representative of a person to indemnify the person in respect of a liability of the person in respect of the representative; or (c) provides for a licensee from whom a person holds a proper authority to indemnify another such licensee in respect of a liability of the other licensee in respect of the person. “(4) In paragraph (3) (c): “(5) A person shall not make, offer to make, or invite another person to offer to make, in relation to a liability of the first-mentioned person in respect of a person, an agreement that is or would be void, in whole or in part, by virtue of subsection (2). “61f. (1) Where 2 or more persons are liable under this Division in respect of the same conduct or the same loss or damage, they are so liable jointly and severally. “(2) Nothing in section 61a, 61b or 61c: (a) affects a liability arising otherwise than by virtue of this Division; (b) despite paragraph (a) of this subsection, entitles a person to be compensated more than once in respect of the same loss or damage; or (c) makes a person guilty of an offence. “Division 5—Excluding persons from the securities industry Power to revoke, without a hearing, licence held by natural person “62a. The Commission may, by written order, revoke a licence held by a natural person if the person: (a) becomes an insolvent under administration; (b) is convicted of serious fraud; (c) becomes incapable, through mental or physical incapacity, of managing his or her affairs; or (d) asks the Commission to revoke the licence. Power to revoke, without a hearing, licence held by body corporate “62b. The Commission may, by written order, revoke a licence held by a body corporate if: (a) the body ceases to carry on business; (b) the body becomes an externally-administered body corporate; (c) the body asks the Commission to revoke the licence; or (d) a director, secretary or executive officer of the body contravenes this Act because: (i) he or she does not hold a licence; or (ii) a licence he or she holds is suspended. Power to revoke licence after a hearing “62c. (1) Subject to section 62p, the Commission may, by written order, revoke a licence if: (a) the application for the licence contained matter that was false in a material particular or materially misleading; (b) there was an omission of material matter from the application for the licence; (c) the licensee contravenes a securities law; (d) the licensee contravenes a condition of the licence; (e) the licensee is a natural person and the Commission has reason to believe that he or she is not of good fame and character; (f) the licensee is a body corporate and the Commission is satisfied that the educational qualifications or experience of a person who: (i) is an officer of the body; and (ii) was not an officer of the body when the licence was granted; are or is inadequate having regard to the duties that the officer performs, or will perform, in connection with the holding of the licence; (g) the licensee is a body corporate and the Commission is satisfied that: (i) an officer of the body performs, or will perform, in connection with the holding of the licence, duties that are or include duties (in this paragraph called the ‘different duties’) other than those having regard to which the Commission was satisfied, before granting the licence, that the officer’s educational qualifications and experience were adequate; and (ii) the officer’s educational qualifications or experience are or is inadequate having regard to the different duties; (h) the licensee is a body corporate and: (i) a licence or recognised licence held by a director, secretary or executive officer of the body is suspended or revoked; or (ii) an order is made against such a director, secretary or executive officer under section 62g or a provision of a law of a participating State or participating Territory that corresponds with that section; (j) the Commission has reason to believe that the licensee has not performed efficiently, honestly and fairly the duties of a holder of a dealers licence or an investment advisers licence, as the case requires; or (k) the Commission has reason to believe that the licensee will not perform those duties efficiently, honestly and fairly. “(2) In determining whether or not it has reason to believe as mentioned in paragraph (1) (e) or (k) in relation to a licensee, the Commission is not precluded from having regard to a matter that arose before the time when the licence was granted unless the Commission was aware of the matter at that time. Power to suspend licence instead of revoking it “62d. (1) Subject to section 62p, where: (a) section 62a or 62b empowers the Commission to revoke a licence otherwise than because the licensee has asked for the revocation; or (b) the Commission is empowered by virtue of paragraph 62c (1) (c), (d), (f). (g). (h), (j) or (k) to revoke a licence; the Commission may, if it considers it desirable to do so, instead: (c) by written order, suspend the licence for a specified period; or (d) by written order, prohibit the licensee, either permanently or for a specified period, from doing specified acts, being acts that section 43 or 45 would prohibit the licensee from doing if he, she or it did not hold the licence. “(2) The Commission may at any time, by written order, vary or revoke an order in force under this section. “(3) For the purposes of sections 43, 45, 60a and 60b, a licensee or recognised licensee shall be taken not to hold the licence or recognised licence at any time during a period for which the licence or recognised licence is suspended. “(4) Where an order in force under this section prohibits a licensee as mentioned in paragraph (1) (d): (a) the licensee shall not contravene the order; and (b) in relation to the doing by a person, as a representative of the licensee, of an act specified in the order, sections 60a and 60b apply, or apply during the period specified in the order, as the case requires, as if the licensee did not hold the licence. “(5) Subsection (4) applies in relation to a person who holds a licence within the meaning of a corresponding law of a participating State or participating Territory and so applies as if: (a) a reference in that subsection to a licensee were a reference to the person; and (b) a reference in that subsection to this section or to paragraph (1) (d) were a reference to a provision of a law of that State or Territory that corresponds with this section or that paragraph, as the case may be. “(6) The effect that subsection (4) has by virtue of subsection (5) is additional to, and does not prejudice, the effect subsection (4) otherwise has. “(7) A reference in this Act (other than this section) to the Commission suspending a licence includes a reference to the Commission making under paragraph (1) (d) an order relating to the licence. “(8) A reference in this Act to the Commission suspending a recognised licence includes a reference to the Commission making under a provision of a law of a participating State or participating Territory that corresponds with paragraph (1) (d) an order relating to the recognised licence. Power to make banning order where licence revoked or suspended “62e. Subject to section 62p, where the Commission: (a) revokes under section 62a; (b) revokes by virtue of paragraph 62c (1) (a), (b), (c), (d), (j) or (k); (c) revokes by virtue of paragraph 62c (1) (e); (d) suspends by virtue of paragraph 62d (1) (a); or (e) suspends by virtue of paragraph 62d (1) (b); a licence held by a natural person, it may also make a banning order against the person. Power to make banning order against unlicensed person “62f. Subject to section 62p, the Commission may make a banning order against a natural person (other than a licensee or a recognised licensee) if: (a) he or she becomes an insolvent under administration; (b) he or she is convicted of serious fraud; (c) he or she becomes incapable, through mental or physical incapacity, of managing his or her affairs; (d) he or she contravenes a securities law; (e) the Commission has reason to believe that he or she is not of good fame and character; (f) the Commission has reason to believe that he or she has not performed efficiently, honestly and fairly the duties of: (ii) a representative of an investment adviser; or (g) the Commission has reason to believe that he or she will not perform efficiently, honestly and fairly the duties of: (ii) a representative of an investment adviser. Nature of banning order “62g. (1) Where this Division empowers the Commission to make a banning order against a person, the Commission may, by written order, prohibit the person: (a) in any case—permanently; or (b) except where the Commission is empowered by virtue of paragraph 62e (c) or 62f (e) to make the order—for a specified period; from doing an act as: (c) a representative of a dealer; (d) a representative of an investment adviser; or (e) a representative of a dealer or of an investment adviser; “(2) The Commission shall not vary or revoke a banning order except under section 62h, 62j or 62k. Exceptions to banning order “62h. (1) An order made against a person under subsection 62g (1) may include a provision that permits the person, subject to such conditions (if any) as are specified, to do, or to do in specified circumstances, specified acts that the order would otherwise prohibit the person from doing. “(2) Subject to section 62p, the Commission may, at any time, by written order, vary a banning order against a person: (a) by adding a provision that permits the person as mentioned in subsection (1); (b) by varying such a provision in relation to conditions, circumstances or acts specified in the provision; (c) by omitting such a provision and substituting another such provision; or (d) by omitting such a provision. Variation or revocation of banning order on application “62j. (1) Subject to sections 62k and 62p, this section has effect where a person applies to the Commission to vary or revoke a banning order relating to the person. (a) the person is not an insolvent under administration; (b) the Commission has no reason to believe that the person is not of good fame and character; and (c) the Commission has no reason to believe that the person will not perform efficiently, honestly and fairly the duties of: (ii) a representative of an investment adviser; the Commission shall, by written order: (d) if only one of subparagraphs (c) (i) and (ii) applies—vary the banning order so that it no longer prohibits the person from doing an act as a representative of a dealer, or of an investment adviser, as the case may be; or (e) otherwise—revoke the banning order. “(4) In determining whether or not it has reason to believe as mentioned in paragraph (2) (b) or (c), the Commission shall have regard to any conviction of the person, during the 10 years ending on the day of the application, of serious fraud. “(5) Nothing in subsection (4) limits the matters to which the Commission may have regard: (a) in deciding on the application; or Revocation of banning order in certain cases “62k. Where: (a) section 62j requires the Commission to vary a banning order so that it no longer has a particular operation; and (b) the order has no other operation; the Commission shall, by written order, instead revoke the banning order. Effect and publication of orders under this Division “62l. (1) An order by the Commission under this Division takes effect when served on the person to whom the order relates. “(2) As soon as practicable on or after the day on which an order by the Commission under this Division takes effect, the Commission shall publish in the Gazette a notice that sets out a copy of: (a) if the order is made under section 62a, 62b, 62c, 62d or 62g or revokes a banning order—the first-mentioned order; or (b) if the order varies a banning order—the banning order as in force immediately after the first-mentioned order takes effect; and states that the first-mentioned order, or the banning order as so in force, as the case may be, took effect on that day. (a) but for this subsection, subsection (2) would require publication of a notice setting out a copy of a banning order as in force at a particular time; (b) the banning order as so in force includes a provision that permits a person as mentioned in subsection 62h (1); and (c) in the Commission’s opinion, the notice would be unreasonably long if it set out a copy of the whole of that provision; the notice may, instead of setting out a copy of that provision, set out a summary of the provision’s effect. Contravention of banning order “62m. A person shall not contravene a banning order or recognised banning order relating to the person. Banned person ineligible for licence “62n. The Commission shall not grant a dealers licence or an investment advisers licence to a person if a banning order or recognised banning order prohibits the person (except as permitted by the order) from doing an act as a representative of a dealer, or of an investment adviser, as the case may be. Opportunity for hearing “62p. (1) The Commission shall not: (a) refuse, otherwise than by virtue of section 62n or subsection 62r (1), an application for a licence; (b) impose conditions on a licence; (c) vary the conditions of a licence; (d) revoke or suspend a licence otherwise than by virtue of section 62a or 62b or paragraph 62d (1) (a); (e) make, otherwise than by virtue of paragraph 62e (a) or (d) or 62f (a), (b) or (c), an order under section 62g against a person; (f) make under subsection 62h (2) an order varying a banning order against a person; or (g) refuse an application by a person under section 62j; unless the Commission complies with subsection (2) of this section. “(2) The Commission shall give the applicant, licensee or person, as the case may be, an opportunity: (a) to appear at a hearing before the Commission that takes place in private; and (b) to make submissions and give evidence to the Commission in relation to the matter. Disqualification by the Court “62q. (1) Where the Commission: (a) revokes under section 62a or 62b or subsection 62c (1) a licence held by a person; or (b) makes under section 62g against a person an order that is to operate otherwise than only for a specified period; the Commission may apply to the Court for an order or orders under this section in relation to the person. “(2) On an application under subsection (1), the Court may make one or more of the following: (a) an order disqualifying the person, permanently or for a specified period, from holding: (i) a dealers licence; (ii) an investment advisers licence; or (iii) a dealers licence or an investment advisers licence; (b) an order prohibiting the person, permanently or for a specified period, from doing an act as: (i) a representative of a dealer; (ii) a representative of an investment adviser; or (iii) a representative of a dealer or of an investment adviser; (c) such other order as it thinks fit; or may refuse the application. “(3) The Court may revoke or vary an order in force under this section. Effect of order under section 62q or corresponding law “62r. (1) The Commission shall not grant a dealers licence or an investment advisers licence to a person whom an order disqualifies from holding a dealers licence or an investment advisers licence, as the case may be, under this Part or the provisions of a law of a participating State or participating Territory that correspond with this Part. “(2) A person shall not contravene an order that prohibits the person from doing an act as: (a) a representative of a dealer; (b) a representative of an investment adviser; or (c) a representative of a dealer or of an investment adviser; “(3) In this section: ‘order’ means: (a) an order in force under section 62q or a provision of a law of a participating State or participating Territory that corresponds with that section; or (b) an order as it has effect because of subsection 62s (2) or a provision of a law of a participating State or participating Territory that corresponds with that subsection. Effect of order under previous Territory law corresponding with section 62q “62s. (1) This section applies where, immediately before the commencement of section 52 of the Co-operative Scheme Legislation Amendment Act 1989, a person was disqualified, either permanently or for a period, from holding a licence because of an order that was made under subsection 60 (4) of this Act as in force before that commencement. “(2) As from that commencement, the order has effect for the purposes of this Act as if it were: (a) in force under section 62q; (b) an order disqualifying the person, permanently or for that period, as the case may be, from holding a dealers licence or an investment advisers licence; and (c) an order prohibiting the person, permanently or for that period, as the case may be, from doing an act as a representative of a dealer or of an investment adviser.”. Insertion of Division heading 53. Before section 63 of the Principal Act the following heading is inserted in Part V: “Division 1—General”. Issue of contract notes 54. Section 64 of the Principal Act is amended: (a) by inserting before subsection (1) the following subsection: “(1a) This section applies: (a) in relation to a dealer (other than an exempt dealer) in relation to a transaction of sale or purchase of securities; or (b) in relation to an exempt dealer, in relation to a transaction of sale or purchase of securities that is entered into in the course of a securities business that the exempt dealer carries on in a capacity of personal representative of a dead dealer.”; (b) by omitting from subsection (1) “(not being an exempt dealer)”. Repeal of sections 65 and 65a 55. Sections 65 and 65a of the Principal Act are repealed. Insertion of Division heading 56. Before section 68 of the Principal Act the following heading is inserted: “Division 2—Short selling of securities”. 57. After section 68a of the Principal Act the following Division is inserted in Part V: “Division 3—Recommendations about securities Recommendation made by partner or officer “68b. For the purposes of this Division (other than section 68e): (a) a recommendation made by a partner shall be deemed to have been made by each partner in the partnership; and (b) a recommendation made by a director, executive officer or secretary of a body corporate shall be deemed to have also been made by the body corporate. Client to be told if adviser’s interests may influence recommendation “68c. (1) This section applies where a securities adviser makes a securities recommendation to a person (in this section called the ‘client’) who may reasonably be expected to rely on it. “(2) The securities adviser shall: (a) if the recommendation is made orally—when making the recommendation, disclose to the client orally; or (b) if the recommendation is made in writing—set out in that writing, in such a way as to be no less legible than the other material in that writing; particulars of: (c) any commission or fee, or any other benefit or advantage, whether pecuniary or not and whether direct or indirect, that the securities adviser or an associate has received, or will or may receive, in connection with the making of the recommendation or a dealing by the client in securities as a result of the recommendation; and (d) any other pecuniary or other interest, whether direct or indirect, of the securities adviser or an associate, that may reasonably be expected to be capable of influencing the securities adviser in making the recommendation. “(3) Subsection (2) does not apply in relation to a commission or fee that the securities adviser has received, or will or may receive, from the client. “(4) A reference in subsection (2) to an associate is a reference to a person associated with the securities adviser and, for the purposes of section 6, the making of securities recommendations is the matter to which the reference relates. “(5) If by making the recommendation the securities adviser does an act as a representative of another person, then: (a) without limiting the generality of section 6, the other person is an associate for the purposes of subsection (2) of this section; and (b) subsection (2) of this section does not apply in relation to a commission or fee that the other person has received, or will or may receive, from the client. “(6) Despite section 6 and subsection (4) of this section, a person (in this subsection called the ‘alleged associate’) is not an associate for the purposes of subsection (2) of this section merely because of being: (a) a partner of the securities adviser otherwise than because of carrying on a securities business in partnership with the securities adviser; or (b) a director of 2 body corporate of which the securities adviser is also a director, whether or not the body carries on a securities business; unless the securities adviser and the alleged associate act jointly, or otherwise act together, or under an arrangement between them, in relation to making securities recommendations. Defences to alleged breach of subsection 68c (2) “68d. (1) Where: (a) a person: (i) when making a recommendation orally, fails to disclose; or (ii) when making a recommendation in writing, fails to set out in that writing; as required by subsection 68c (2), particulars of a matter; and (b) it is proved that the person was not, and could not reasonably be expected to have been, aware of that matter when making the recommendation; the failure is not a contravention of that subsection. “(2) Where: (a) a dealer or investment adviser, or a representative of a dealer or investment adviser: (i) when making a recommendation orally, fails to disclose; or (ii) when making a recommendation in writing, fails to set out in that writing; as required by subsection 68c (2), particulars of a matter; (b) in the case of a representative of a dealer or investment adviser— by making the recommendation, the representative does an act as a representative of the dealer or investment adviser; (c) it is proved that the dealer or investment adviser had in operation, throughout a period beginning before the decision to make the recommendation was made and ending after the recommendation was made, arrangements to ensure that: (i) the natural person who made the decision knew nothing about that matter before the end of that period; and (ii) no advice with respect to the making of the recommendation was given to the person by anyone who knew anything about that matter; and (d) it is also proved that: (i) the person in fact knew nothing about that matter before the end of that period; and (ii) no such advice was so given; the failure is not a contravention of that subsection. “(3) Neither of subsections (1) and (2) limits the generality of the other. Adviser must have reasonable basis for recommendation “68e. (1) A securities adviser who: (a) makes a securities recommendation to a person who may reasonably be expected to rely on it; and (b) does not have a reasonable basis for making the recommendation to the person; contravenes this section. “(2) For the purposes of subsection (1), a securities adviser does not have a reasonable basis for making a securities recommendation to a person unless: (a) in order to ascertain that the recommendation is appropriate having regard to the information the securities adviser has about the person’s investment objectives, financial situation and particular needs, the securities adviser has given such consideration to, and conducted such investigation of, the subject matter of the recommendation as is reasonable in all the circumstances; and (b) the recommendation is based on that consideration and investigation. “(3) A person who contravenes subsection (1) is not guilty of an offence by virtue of this section or section 141. Adviser who breaches this Division liable to compensate client “68f. (1) This section applies where: (a) a securities adviser contravenes section 68c or 68e in relation to a securities recommendation to a person (in this section called the ‘client’); (b) the client, in reliance on the recommendation, does, or omits to do, a particular act; (c) it is reasonable, having regard to the recommendation and all other relevant circumstances, for the client to do, or omit to do, as the case may be, that act in reliance on the recommendation; and (d) the client suffers loss or damage as a result of that act or omission. “(2) Subject to subsections (3) and (4), the securities adviser is liable to pay damages to the client in respect of that loss or damage. “(3) In the case of a contravention of section 68c, the securities adviser is not so liable if it is proved that a reasonable person in the client’s circumstances could be expected to have done, or omitted to do, as the case may be, that act in reliance on the recommendation even if the securities adviser had complied with that section in relation to the recommendation. “(4) In the case of a contravention of section 68e, the securities adviser is not so liable if it is proved that the recommendation was, in all the circumstances, appropriate having regard to the information that, when making the recommendation, the securities adviser had about the client’s investment objectives, financial situation and particular needs. Qualified privilege for adviser when complying with this Division “68g. A securities adviser who: (a) makes a securities recommendation to a person who may reasonably be expected to rely on it; and (b) in so making the recommendation, contravenes neither of subsections 68c (2) and 68e (1); has qualified privilege in respect of a statement the securities adviser makes to the person, whether orally or in writing, in the course of, or in connection with, so making the recommendation.”. 58. Section 87 of the Principal Act is amended by omitting subsections (1), (2) and (3) and substituting the following subsection: “(1) In this Part: ‘financial journalist’ means a person who is not a licensee and who, in the course of the person’s business or employment, contributes advice, or prepares analyses or reports, about securities for publication: (a) in a newspaper or periodical; (b) in the course of, or by means of, transmissions made by means of an information service; or (c) in sound recordings, video recordings or data recordings; ‘Register’, in relation to a person to whom this Part applies, means the Register required to be maintained by the person under subsection 89 (1); ‘securities’ means securities of: (a) a body corporate that is a public company under the law in force in a State or Territory; or (b) a body corporate or other person included in the official list of a securities exchange.”. 59. Section 88 of the Principal Act is repealed and the following section is substituted: Application of Part “88\. (1) This Part applies to a person who: (a) holds a licence; (b) holds a proper authority from a person who holds a licence; or (c) is a financial journalist. “(2) A person to whom this Part applies but who does not hold a licence need not maintain a Register under this Part if the person maintains a register under the provisions of a law of a participating State or participating Territory that correspond with this Part.”. 60. Sections 90 and 91 of the Principal Act are repealed and the following sections are substituted: Commission to be notified of certain matters on establishment of Register “90\. (1) An applicant for a licence shall include in the application written notice of where the applicant intends to keep the Register under subsection 89 (1). “(2) Within 14 days after beginning to maintain the Register, a person who holds a proper authority from a licensee or recognised licensee shall lodge written notice of: (a) where the Register is kept; and (b) the name and business address of each licensee, and each recognised licensee, from whom the first-mentioned person holds a proper authority. “(3) Within 14 days after beginning to maintain the Register, a financial journalist shall lodge written notice of: (a) where the Register is kept; (b) the name and business address of the financial journalist’s employer (if any); and (c) the newspapers and periodicals to which the financial journalist contributes. Commission to be notified of changes in certain matters “90a. (1) As soon as practicable after changing the place where the Register is kept, a person to whom this Part applies shall lodge written notice of the new place where the Register is kept. “(2) Where, at a particular time during the period beginning when a person complies with subsection 90 (2) and ending immediately after the person next ceases to be a person to whom this Part applies, the person begins or ceases to hold a proper authority from a particular licensee or recognised licensee, the person shall, as soon as practicable after that time, lodge written notice of that fact and of the name and business address of the licensee or recognised licensee. “(3) Where, at a particular time during the period beginning when a person complies with subsection 90 (3) and ending immediately after the person next ceases to be a person to whom this Part applies, the person: (a) begins or ceases to be employed as a financial journalist by a particular employer; or (b) begins or ceases to contribute as a financial journalist to a particular newspaper or periodical; the person shall, as soon as practicable after that time, lodge written notice of that fact and of: (c) the employer’s name and business address; or (d) the name of the newspaper or periodical; “(4) As soon as practicable after: (a) the name or business address of a licensee or recognised licensee from whom a person to whom this Part applies holds a proper authority; (b) the name or business address of an employer who employs a person to whom this Part applies as a financial journalist; or (c) the name of a newspaper or periodical to which a person to whom this Part applies contributes as a financial journalist; ceases to be the name or business address of the licensee or employer, or the name of the newspaper or periodical, as the case may be, as last notified by the person under section 90 or this section, the person shall lodge written notice of the new name or business address. Defences “91\. (1) It is a defence to a prosecution for contravening section 89, 90 or 90a if it is proved that the contravention was due to the defendant not being aware of a fact or occurrence whose existence was necessary to constitute the contravention and that: (a) the defendant was not so aware on the date of the information; (b) the defendant became so aware less than 14 days before the date of the information; or (c) the defendant became so aware not less than 14 days before the date of the information and complied with the relevant section within 14 days after becoming so aware. “(2) For the purposes of this Part, a person shall, unless the contrary is proved, be presumed to have been aware at a particular time of a fact or occurrence relating to securities if an employee or agent of the person, being an employee or agent having duties or acting in relation to the employer’s or principal’s interest in the relevant securities, was aware of that fact or occurrence at that time.”. 61. Section 93 of the Principal Act is repealed and the following section is substituted: Power of Commission to require certain information “93\. (1) The Commission may, by written notice, require a person (in this section called the ‘principal’) to supply the Commission with: (a) the name and address of the person who contributed or prepared specified advice or a specified analysis or report; or (b) the names and addresses of all persons who, during a specified period, contributed or prepared any advice, analysis or report; being advice, or an analysis or report, about securities that was published: (c) in a newspaper or periodical owned or published by the principal; (d) in the course of, or by means of, transmissions that: (i) the principal makes by means of an information service; or (ii) are made by means of an information service that the principal owns, operates or makes available; or (e) in sound recordings, video recordings, or data recordings, that the principal makes available as mentioned in paragraph 6e (5) (c). “(2) A person shall comply with a requirement made of the person under subsection (1).”. 62. Section 122aa of the Principal Act is amended by omitting subsection (5). Division 2—Amendments of Futures Industry Act 19863 63. After section 3 of the Principal Act the following heading and section are inserted: “PART Ia—INTERPRETATION Effect of this Part “3a. The provisions of this Part have effect for the purposes of this Act, except so far as the contrary intention appears in this Act.”. 64. Section 4 of the Principal Act is amended: (a) by omitting “subsection 11 (1)” from the definitions of “recognised futures adviser” and “recognised futures broker” in subsection (1) and substituting “section 11”; (b) by omitting from subsection (1) the definitions of “futures adviser”, “futures broker”, “licence” and “recognised licensee” and substituting the following definitions: “ ‘futures adviser’ means a person who carries on, or 2 or more persons who together carry on, a futures advice business; ‘futures broker’ means: (a) a person who carries on, or 2 or more persons who together carry on, a futures broking business, whether or not the person, or any of the persons, also deals in futures contracts on the person’s own account; or (b) a person who holds a futures broker’s licence under Part IV or the provisions of a law of a participating State or participating Territory that correspond with Part IV; ‘licence’ means a futures broker’s licence or a futures adviser’s licence; ‘recognised licensee’ means a recognised futures broker or a recognised futures adviser and, in relation to a recognised licence, means the person who holds the recognised licence;”; (c) by omitting from subsection (1) the definitions of “futures adviser’s representative”, “futures adviser’s representative’s licence”, “futures broker’s representative”, “futures broker’s representative’s licence”, “recognised futures adviser’s representative”, “recognised futures broker’s representative” and “representative’s licence”; (d) by inserting in subsection (1) the following definitions: “ ‘assets’, in relation to the holder of a futures broker’s licence, means all the assets of the holder, whether or not used in connection with a business of dealing in futures contracts; ‘Australian company law’ means the Companies Act 1981 or the provisions of: (a) a previous law of the Territory; or (b) a law, or a previous law, of a State or of another Territory; that correspond with that Act; ‘banning order’ means an order made under section 80g and in force under Division 5 of Part IV; ‘condition’, in relation to a licence, means a condition or restriction to which the licence is subject, or will be subject, as the case requires; ‘eligible money market dealer’ means a body corporate in respect of which a declaration is in force under paragraph 97 (7) (b) of the Companies Act 1981; ‘event’ includes any happening, circumstance or state of affairs; ‘exempt broker’ means a person who is an exempt broker by virtue of section 10; ‘exempt futures adviser’ means a person who is an exempt futures adviser by virtue of section 10; ‘exempt public authority’ means a body corporate that is incorporated within Australia and is a public authority or an instrumentality or agency of the Crown in right of the Commonwealth or of a State or Territory; ‘externally-administered body corporate’ means a body corporate: (a) that is being wound up under an Australian company law; (b) in respect of property of which a receiver, or a receiver and manager, has been appointed under an Australian company law (whether or not by a court) and is acting; (c) that is under official management under an Australian company law; or (d) that has, whether in the Territory or elsewhere, entered into a compromise or arrangement with its creditors that is still in operation; ‘futures advice business’ has the meaning given by section 10a; ‘futures broking business’, in relation to a person, means, subject to subsection 7 (4), a business of dealing in futures contracts on behalf of other persons; ‘futures law’ means a provision of this Act or a provision of a corresponding law of a participating State or participating Territory; ‘futures report’ means an analysis or report about futures contracts; ‘have’, in relation to information, includes be in possession of the information; ‘hold’, in relation to a person, in relation to a document that is, or purports to be, a copy of a licence, means have in the person’s possession; ‘information service’ means: (a) a broadcasting service; (b) an interactive or broadcast videotext or teletext service or a similar service; (c) an online database service or a similar service; or (d) any other prescribed service; ‘invalid authority’ has the meaning given by section 10b; ‘licensee’ means a person who holds a licence and, in relation to a licence, means the person who holds the last-mentioned licence; ‘liquidator’ includes a provisional liquidator; ‘lodge’ means lodge with the Commission; ‘non-broker’ means a person who is neither a futures broker nor one of 2 or more persons who together constitute a futures broker; ‘proper authority’ has the meaning given by section 10b; ‘publish’ includes issue; ‘recognised banning order’ means a banning order within the meaning of a corresponding law of a participating State or participating Territory; ‘recognised licence’ means, subject to section 11, a licence within the meaning of a corresponding law of a participating State or participating Territory; ‘representative’ has the meaning given by section 11a; ‘responsible officer’, in relation to a body corporate that applies for a licence, means an officer of the body who would perform duties in connection with the holding of the licence; ‘serious fraud’ means an offence involving fraud or dishonesty, being an offence: (a) against a law of the Commonwealth, of a State or of a Territory, or against any other law; and (b) punishable by imprisonment for life or for a period, or maximum period, of at least 3 months; ‘suspend’ has a meaning affected by subsections 80d (7) and (8); ‘transmission’ means a transmission, by means of electric or electromagnetic energy, of: (a) sounds, including speech and music; (b) visual images; (c) signals for the communication, whether as between persons and persons, persons and things or things and things, of any matter otherwise than in the form of sounds or visual images; or (d) signals for the actuation or control of machinery or apparatus.”. 65. After section 6 of the Principal Act the following sections are inserted: Businesses of a particular kind “6a. A reference to a business of a particular kind includes a reference to a business of that kind that is part of, or is carried on in conjunction with, any other business. Carrying on a business: alone or together with others “6b. A reference to a person carrying on a business, or a business of a particular kind, is a reference to the person carrying on a business, or a business of that kind, whether alone or together with any other person or persons.”. Dealing in futures contracts 66. Section 7 of the Principal Act is amended by adding at the end the following subsections: “(4) Subsection (5) has effect for the purposes of determining: (a) whether or not a person deals in a futures contract on another person’s behalf; (b) whether or not a person carries on, or holds himself, herself or itself out as carrying on, a futures broking business; and (c) what constitutes such a business carried on by the person. “(5) An act that the person does: (a) while employed by, or acting for or by arrangement with, a futures broker; (b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the broker; and (c) in connection with a business of dealing in futures contracts that the broker carries on; “(6) Subsections (3), (4) and (5) do not have effect for the purposes of sections 46 and 50.”. 67. Section 10 of the Principal Act is repealed and the following sections are substituted: Exempt brokers and exempt futures advisers “10\. (1) A body corporate is both an exempt broker and an exempt futures adviser if it is: (a) a prescribed body corporate; or (b) an exempt public authority in relation to which a declaration is in force under subsection (2). “(2) The Ministerial Council may by writing declare that paragraph (1) (b) applies in relation to specified bodies corporate. “(3) The Commission shall cause a copy of an instrument executed under subsection (2) to be published in the Gazette. “(4) Subject to this section, a person is an exempt broker or an exempt futures adviser if the person is a futures broker or futures adviser, as the case may be, but does not carry on a futures broking business or a futures advice business, as the case may be, except: (a) as an official receiver or trustee within the meaning of the Bankruptcy Act 1966; (b) as a receiver, receiver and manager, or liquidator, appointed by a court; (c) as a person appointed by a court to carry on the business concerned; (d) as a receiver, receiver and manager, or liquidator, appointed otherwise than by a court; (e) as an official manager or deputy official manager of a body corporate; (f) as a trustee or other person administering a compromise or arrangement between a body corporate and any other person or persons; (g) as a personal representative of a dead dealer or investment adviser, as the case maybe; or (h) in such other capacity, or in such other circumstances, as are prescribed. “(5) A person who carries on a futures broking business or futures advice business in a capacity referred to in any of paragraphs (4) (d) to (g), inclusive, shall be taken for the purposes of subsection (4) to carry on the business otherwise than in that capacity unless there is in force under subsection (6) an approval of the person carrying on the business in that capacity. “(6) The Commission may, on application by a person and after having regard to: (a) the prescribed matters (if any); and (b) such matters as it thinks appropriate; by writing approve of the person carrying on a specified futures broking business or futures advice business in a specified capacity, being a capacity referred to in any of paragraphs (4) (d) to (g), inclusive. “(7) A person is not an exempt broker or an exempt futures adviser except as provided by this section. “(8) At and after the commencement of section 67 of the Co-operative Scheme Legislation Amendment Act 1989, a declaration that, immediately before that commencement, was in force under subsection 10 (2) of this Act as in force before that commencement has effect as if it were a declaration made at that commencement under subsection (2) of this section. Futures advice business “10a. (1) A reference to a futures advice business, in relation to a person, is a reference to: (a) a business of advising other persons about futures contracts; or (b) a business in the course of which the person publishes futures reports. “(2) The remaining provisions of this section apply for the purposes of determining: (a) whether or not a person carries on a futures advice business; (b) what constitutes a futures advice business carried on by a person; and (c) whether or not a person holds himself, herself or itself out to be a futures adviser. “(3) The fact that the person advises other persons about futures contracts, or publishes futures reports, in some or all of the following circumstances shall be disregarded: (a) in a newspaper or periodical: (i) of which the person is the proprietor or publisher; and (ii) that is generally available to the public otherwise than only on subscription; (b) in the course of, or by means of, transmissions that: (i) the person makes by means of an information service; or (ii) are made by means of an information service that the person owns, operates or makes available; and are generally available to the public; (c) in sound recordings, video recordings, or data recordings, that the person makes generally available to the public in either or both of the following ways: (i) by supplying copies of them to the public; (ii) by causing the sound recordings to be heard by, the video recordings to be seen and heard by, or the contents of the data recordings to be displayed or reproduced for, the public, as the case may be. “(4) Subsection (3) does not apply in relation to a newspaper or periodical, or transmissions, sound recordings, video recordings or data recordings, whose sole or principal purpose is to advise other persons about futures contracts or to publish futures reports. “(5) The fact that the person holds himself, herself or itself out as advising other persons, or publishing futures reports, as mentioned in subsection (3) shall be disregarded. “(6) An act that the person does: (a) while employed by, or acting for or by arrangement with, another person; (b) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and (c) in connection with a futures advice business carried on by the other person; Proper authority; invalid authority “10b. (1) A reference, in relation to a person (in this subsection called the ‘representative’), to a proper authority from a person (in this subsection called the ‘principal’) who holds a licence is a reference to a copy of the licence on which are endorsed: (a) a statement: (i) certifying the copy to be a true copy of the licence; (ii) stating that the representative is employed by, or acts for or by arrangement with, the principal; and (iii) signed by the principal; and (b) in relation to each licensee (if any), other than the principal, of whom the representative is a representative, a statement that: (i) sets out the name of the licensee; (ii) states that the representative is employed by, or acts for or by arrangement with, the licensee; (iii) states that the licensee consents to the representative being employed by, or acting for or by arrangement with, the principal; and (iv) is signed by the licensee. “(2) A reference, in relation to a person (in this subsection called the ‘representative’), to an invalid authority from a person (in this subsection called the ‘principal’) is a reference to a document: (a) on which is endorsed a statement: (i) stating that the representative is employed by, or acts for or by arrangement with, the principal; and (ii) signed by the principal; and (b) that purports to be a copy of a licence and to be a proper authority of the representative from the principal, but is not in fact such a proper authority; whether or not: (c) the principal is, or has ever been, a licensee; or (d) the document is in fact a copy of a licence that exists or has ever existed. “(3) For the purposes of this section, a statement is signed by a person if, and only if, it is signed: (a) if the person is a natural person—by the person; or (b) if the person is a body corporate: (i) by a director or secretary; or (ii) by an executive officer who is authorised to sign the statement. ‘licence’ includes a recognised licence; ‘licensee’ includes a recognised licensee.”. 68. Section 11 of the Principal Act is repealed and the following section is substituted: Recognised licensee must be connected with State or Territory concerned “11\. Where a person holds a futures broker’s licence or futures adviser’s licence under the provisions of a law of a participating State or participating Territory that correspond with Part IV, the person is not a recognised futures broker or recognised futures adviser, as the case may be, and the licence is not a recognised licence, unless: (a) if the person is a natural person who is not a partner in a firm dealing in futures contracts or carrying on a futures advice business, as the case may be—the person is ordinarily resident in that State or Territory; (b) if the person is a natural person who is a partner in such a firm— the firm’s principal place of business is in that State or Territory; or (c) if the person is a body corporate—the body: (i) is incorporated in that State or Territory; or (ii) is incorporated outside Australia and the external Territories and is registered under the provisions of a law of that State or Territory that correspond with Division 5 of Part XIII of the Companies Act 1981”. 69. After section 11 of the Principal Act the following section is inserted: Representatives “11a. (1) Subject to subsection (2), a person is a representative of another person if, and only if, the first-mentioned person is employed by, or acts for or by arrangement with, the other person in connection with a futures broking business or futures advice business carried on by the other person. “(2) Except for the purposes of paragraph 10b (1) (b): (a) a person who holds a proper authority from a licensee or recognised licensee is a representative of the licensee or recognised licensee; and (b) a person who holds an invalid authority from another person is a representative of the other person. “(3) Subject to subsection (4), a person does an act, or engages in conduct, as a representative of another person if, and only if, the first-mentioned person does the act, or engages in the conduct: (a) in connection with a futures broking business or futures advice business carried on by the other person; (b) while the first-mentioned person is a representative of the other person; (c) as employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the other person; and (d) otherwise than in the course of work of a kind ordinarily done by accountants, clerks or cashiers. “(4) Except for the purposes of Division 4 of Part IV, a person who holds himself, herself or itself out to be a representative of another person does an act as a representative of the other person.”. Heading to Part IV 70. The heading to Part IV of the Principal Act is omitted and the following heading is substituted: “PART IV—PARTICIPANTS IN THE FUTURES INDUSTRY”. 71. Sections 60 to 71, inclusive, of the Principal Act are repealed and the following heading and sections are substituted: “Division 1—Futures brokers and futures advisers Futures brokers “61\. A person shall not: (a) deal in a futures contract on another person’s behalf; or (b) hold himself, herself or itself out as carrying on a futures broking business; unless the first-mentioned person holds a futures broker’s licence or is a recognised futures broker or an exempt broker. Penalty: $10,000 or imprisonment for 2 years, or both. Futures advisers “63\. A person shall not: (a) carry on a futures advice business; or (b) hold himself, herself or itself out to be a futures adviser; unless the person is a licensee, a recognised licensee or an exempt futures adviser. Application for a licence “65\. (1) A person may apply to the Commission, in the prescribed form and manner, for a futures broker’s licence or a futures adviser’s licence. “(2) The Commission may require an applicant for a licence to give the Commission such further information in relation to the application as the Commission thinks necessary. “(3) Subsections (1) and (2) of this section, and sections 66 to 66b (inclusive), as in force at and after the commencement of section 71 of the Co-operative Scheme Legislation Amendment Act 1989 apply in relation to an application for a futures broker’s licence or for a futures adviser’s licence that: (a) is made at or after that commencement; or (b) was made before that commencement but, as at that commencement, had been neither granted nor refused. Grant of licence to natural person “66\. (1) This section applies where a natural person applies for a licence. (a) the application was made in accordance with section 65; (b) the person is not an insolvent under administration; (c) if the application is for a futures broker’s licence—the person is a member of a relevant organisation; (d) the Commission is satisfied that the person’s educational qualifications and experience are adequate having regard to the nature of the duties of a holder of a licence of the kind applied for; (e) the Commission has no reason to believe that the person is not of good fame and character; and (f) the Commission has no reason to believe that the person will not perform those duties efficiently, honestly and fairly. “(4) In determining whether or not it has reason to believe as mentioned in paragraph (2) (e) or (f), the Commission shall have regard to any conviction of the person, during the 10 years ending on the day of the application, of serious fraud. Grant of licence to body corporate “66a. (1) This section applies where a body corporate applies for a licence. (a) the application was made in accordance with section 65; (b) the applicant is not an externally-administered body corporate; (c) if the application is for a futures broker’s licence—the applicant is a member of a relevant organisation; (d) the Commission is satisfied that the educational qualifications and experience of each responsible officer of the applicant are adequate having regard to the duties that the officer would perform in connection with the holding of the licence; and (e) the Commission has no reason to believe that the applicant will not perform efficiently, honestly and fairly the duties of a holder of a licence of the kind applied for. “(4) In determining whether or not it has reason to believe as mentioned in paragraph (2) (e), the Commission shall have regard, in relation to each responsible officer of the applicant, to: (a) whether or not the officer is an insolvent under administration; (b) any conviction of the officer, during the 10 years ending on the day of the application, of serious fraud; (c) any reason the Commission has to believe that the officer is not of good fame and character; and (d) any reason the Commission has to believe that the officer will not perform efficiently, honestly and fairly the duties that the officer would perform in connection with the holding of the licence. Effect of certain provisions “66b. (1) Sections 66 and 66a apply subject to sections 80n, 80p and 80r and the regulations. “(2) Nothing in subsection 66 (4) or 66a (4) limits the matters to which the Commission may have regard: (a) in deciding on an application for a licence; or Conditions of licence: general “69\. A licence is subject to: (a) such conditions and restrictions as are prescribed; (b) if the licence was granted before the commencement of section 71 of the Co-operative Scheme Legislation Amendment Act 1989— such of the conditions of the licence as at that commencement as were imposed by the Commission; and (c) subject to section 80p, such conditions and restrictions as the Commission imposes when granting the licence or while the licence is in force. Conditions of futures broker’s licence: membership of relevant organisation “69a. (1) A futures broker’s licence is subject to: (a) a condition that the licensee be, throughout the currency of the licence, a member of a relevant organisation; and (b) a condition that the licence is suspended throughout a period throughout which the licensee: (i) is a member of no relevant organisation; and (ii) would, but for the suspension of the licensee’s membership of a relevant organisation, be a member of the last-mentioned relevant organisation. “(2) A person whose membership of a relevant organisation is suspended for a period: (a) is, for the purposes of paragraph (1) (a), a member of that relevant organisation throughout that period; and (b) is, for the purposes of paragraph (1) (b), a member of that relevant organisation at no time during that period. Conditions of futures broker's licence: assets and liabilities “69b. (1) Without limiting the generality of section 69, one or more of the following may be imposed under that section on a futures broker’s licence: (a) a condition or restriction about limiting the liability that the licensee may incur in connection with a business of dealing in futures contracts; (b) a condition or restriction about incurring, or a condition about disclosing, liabilities of the licensee that arise otherwise than in connection with such a business; (c) a condition or restriction about the licensee’s financial position, whether or not in relation to such a business; (d) without limiting the generality of paragraph (c), a condition that the licensee’s assets include, or not include, specified assets; (e) without limiting the generality of paragraph (c), a condition that the sum of the values of specified assets included in the licensee’s assets be not less than, or not greater than, an amount ascertained in accordance with the condition. “(2) A condition imposed by virtue of paragraph (1) (e) may provide for the values of assets to be ascertained, for the purposes of applying the condition, in a manner specified in, or determined in accordance with, the condition. “(3) Without limiting the generality of paragraph (1) (e), a condition imposed by virtue of that paragraph may provide for the amount referred to in that paragraph to be a specified percentage of the sum of: (a) the values of all the licensee’s assets; (b) the values of specified assets included in the licensee’s assets; (c) the amounts of all the licensee’s liabilities; or (d) the amounts of specified liabilities included in the licensee’s liabilities. Conditions of licence: supervision of representatives “69c. Without limiting the generality of section 69, one or more of the following may be imposed under that section on a licence: (a) a condition about what the licensee is to do, by way of supervision or otherwise, in order to prevent the licensee’s representatives from contravening: (i) a futures law; or (ii) other conditions of the licence; (b) a condition about what the licensee is to do to ensure that each representative of the licensee has adequate qualifications and experience having regard to what the representative will do on the licensee’s behalf in connection with a futures broking business or futures advice business carried on by the licensee. Revocation and variation of licence conditions “69d. Subject to section 80p, the Commission may at any time revoke or vary a condition of a licence unless it was imposed by the regulations. Relevant organisations to be informed about conditions of futures broker’s licence “69e. (1) As soon as practicable after imposing a condition on, or revoking or varying a condition of, a futures broker’s licence, the Commission shall inform in writing: (a) each relevant organisation of which the licensee is a member; and (b) each body corporate that is a clearing house for a futures exchange of which the licensee is a member. “(2) A contravention of subsection (1) does not affect the validity of an act done by the Commission. Licensee to notify breach of licence condition “70\. (1) Within one business day after the happening of an event constituting a contravention of a condition of a licence, the licensee shall give to: (a) the Commission; and (b) each relevant organisation of which the licensee is a member; a written notice setting out particulars of the event. “(2) It is a defence to a prosecution for failing to give a particular notice to a person as required by this section if it is proved that: (a) when the requirement arose, the defendant was unaware of the event that gave rise to the requirement; and (b) the defendant: (i) did not become aware of the event before the date of the information; or (ii) did become so aware before that date but gave the notice to that person as soon as reasonably practicable after becoming so aware. Commission may require licensed futures broker to give information “71\. (1) The Commission may, by writing given to the holder of a futures broker’s licence, direct the holder to give the Commission specified information about, or a specified statement relating to, a business of dealing in futures contracts that the holder carries on or has carried on. “(2) A direction under subsection (1) to give a specified statement may also direct the holder to cause the statement to-be audited by a registered company auditor before it is given to the Commission. “(3) A person shall comply with a direction under this section: (a) if the direction specifies a reasonable period for compliance—within that period; or (b) in any other case—within a reasonable period; or within that period as extended, or further extended, by the Commission by writing given to the person. Penalty: $1,000.”. Register of Licence Holders 72. Section 72 of the Principal Act is amended by omitting subsections (2) and (3) and substituting the following subsections: “(1a) The Commission shall include in the Register of Licence Holders, in relation to each licence, a copy of: (a) the licence; and (b) each instrument that imposes conditions on the licence, or revokes or varies conditions of the licence, after the licence is granted. “(2) The Commission shall enter in the Register of Licence Holders, in relation to each licence: (a) the name of the licensee; (b) if the licensee is a body corporate—the name of each director, and of each secretary, of the body; (c) the day on which the licence was granted; (d) in relation to each business to which the licence relates: (i) the address of the principal place of business at which the business is carried on; (ii) the addresses of the other places (if any) at which the business is carried on; and (iii) if the business is carried on under a name or style other than the name of the licensee—the name or style; (e) in the case of a futures broker’s licence—the name, and the address of the principal place of business, of each relevant organisation of which the licensee is a member; (f) particulars of any suspension of the licence; and (g) such other matters (if any) as are prescribed. “(3) Where a person no longer holds a particular licence, the Commission shall remove from the Register of Licence Holders the documents included in it, and the particulars entered in it, in relation to that licence.”. 73. Sections 73 and 74 of the Principal Act are repealed and the following sections are substituted: Notifying change in particulars “73\. Within 21 days after: (a) the holder of a futures broker’s licence ceases to carry on the business to which the licence relates; (b) the holder of a futures adviser’s licence ceases to act as, or to hold himself, herself or itself out to be, a futures adviser; or (c) there is a change in a matter particulars of which are required by virtue of paragraph 72 (2) (a), (b), (d), (e) or (g) to be entered, in relation to a licence, in the Register of Licence Holders; the holder of the licence shall lodge written particulars, in the prescribed form, of that fact, or of that change, as the case may be. Annual statement of licensee “74\. (1) A person who is or has been a licensee shall lodge, in respect of each year or part of a year during which the licence is or was in force, a statement in the prescribed form that complies with this section. “(2) The statement shall set out the number of persons: (a) who, when the statement is lodged, hold; or (b) who, when the person last ceased to be a licensee, held; as the case may be, proper authorities from the person. “(3) The statement shall also contain such information as is prescribed.”. When annual statement to be lodged 74. Section 75 of the Principal Act is amended: (a) by omitting from paragraph (b) “granted; and” and substituting “granted.”; (b) by omitting paragraph (c). 75. Sections 77, 78, 79 and 80 of the Principal Act are repealed and the following Divisions are substituted: “Division 2—Agreements with unlicensed persons “Subdivision A—Agreements affected Excluded clients “77a. In this Division: ‘excluded client’ means a person who is: (a) a futures broker; (b) a futures adviser; or (c) one of 2 or more persons who together constitute a futures broker or futures adviser. Agreement about a dealing in breach of section 61 “77b. Where a person (in this section and Subdivision B called the ‘non-licensee’) and another person (in this section and Subdivision B called the ‘client’), not being an excluded client, enter into an agreement relating to a dealing or proposed dealing in a futures contract by the non-licensee on the client’s behalf, being a dealing or proposed dealing involving a contravention by the non-licensee of subsection 61 (1) or (2), Subdivision B applies, whether or not anyone else is a party to the agreement. Agreement with person acting in breach of section 63 “77c. Where, during a period when a person (in this section and Subdivision B called the ‘non-licensee’), in contravention of section 63, carries on a futures advice business or holds himself, herself or itself out to be a futures adviser, the non-licensee and a client (other than an excluded client) of the non-licensee enter into an agreement that relates to advising the client about futures contracts or to giving the client futures reports, Subdivision B applies, whether or not anyone else is a party to the agreement. “Subdivision B—Effect on agreements Client may give notice of rescission “77d. (1) Subject to this section, the client may, whether before or after completion of the agreement, give to the non-licensee a written notice stating that the client wishes to rescind the agreement. “(2) The client may only give a notice under this section within a reasonable period after becoming aware of the facts entitling the client to give the notice. “(3) The client is not entitled to give a notice under this section if the client engages in conduct by engaging in which the client would, if the entitlement so to give a notice were a right to rescind the agreement for misrepresentation by the non-licensee, be taken to have affirmed the agreement. “(4) The client is not entitled to give a notice under this section if, within a reasonable period before the agreement was entered into, the non-licensee informed the client (whether or not in writing) that: (a) the non-licensee did not hold a futures broker’s licence; or (b) the non-licensee did not hold a futures broker’s licence and did not hold a futures adviser’s licence; as the case requires. “(5) If, at a time when a futures broker’s licence or futures adviser’s licence held by the non-licensee was suspended, the non-licensee informed the client that the licence was suspended, the non-licensee is to be taken for the purposes of subsection (4) to have informed the client at that time that the non-licensee did not hold a futures broker’s licence or futures adviser’s licence, as the case may be. “(6) A reference in subsection (4) or (5) to a futures broker’s licence or futures adviser’s licence is a reference to a futures broker’s licence or futures adviser’s licence, as the case may be, granted under this Part or under the provisions of a law of a participating State or participating Territory that correspond with this Part. “(7) None of subsections (2), (3) and (4) limits the generality of either of the others. “(8) Subject to this section, the client may give a notice under this section whether or not: (a) the notice will result under section 77e in rescission of the agreement; or (b) the Court will, if the notice so results, be empowered to make a particular order, or any order at all, under section 77g. Effect of notice under section 77d “77e. A notice given under section 77d rescinds the agreement unless rescission of the agreement would prejudice a right, or an estate in property, acquired by a person (other than the non-licensee) in good faith, for valuable consideration and without notice of the facts entitling the client to give the notice. Client may apply to Court for partial rescission “77f. (1) If the client gives a notice under section 77d but the notice does not rescind the agreement because rescission of it would prejudice a right or estate of the kind referred to in section 77e, the client may, within a reasonable period after giving the notice, apply to the Court for an order under subsection (4) of this section. “(2) The Court may extend the period for making an application under subsection (1). “(3) If an application is made under subsection (1), the Court may make such orders expressed to have effect until the determination of the application as it would have power to make if the notice had rescinded the agreement under section 77e and the application were for orders under section 77g. “(4) On an application under subsection (1), the Court may make an order: (a) varying the agreement in such a way as to put the client in the same position, as nearly as can be done without prejudicing such a right or estate acquired before the order is made, as if the agreement had not been entered into; and (b) declaring the agreement to have had effect as so varied at and after the time when it was originally made. “(5) If the Court makes an order under subsection (4), the agreement shall be taken for the purposes of section 77g to have been rescinded under section 77e. “(6) An order under subsection (4) does not affect the application of section 77j or 77l in relation to the agreement as originally made or as varied by the order. Court may make consequential orders “77g. (1) Subject to subsection (2), on rescission of the agreement under section 77e, the Court may, on the application of the client or the non-licensee, make such orders as it would have power to make if the client had duly rescinded the agreement for misrepresentation by the non-licensee. “(2) The Court is not empowered to make a particular order under subsection (1) if the order would prejudice a right, or an estate in property, acquired by a person (other than the non-licensee) in good faith, for valuable consideration and without notice of the facts entitling the client to give the notice. Agreement unenforceable against client “77h. (1) This section: (a) applies while both of the following are the case: (i) the client is entitled to give a notice under section 77d; (ii) a notice so given will result under section 77e in rescission of the agreement; and (b) applies after the agreement is rescinded under section 77e; but does not otherwise apply. “(2) The non-licensee is not entitled, as against the client: (a) to enforce the agreement, whether directly or indirectly; or (b) to rely on the agreement, whether directly or indirectly and whether by way of defence or otherwise. Non-licensee not entitled to recover commission “77j. (1) Without limiting the generality of section 77h, this section: (a) applies while the client is entitled to give a notice under section 77d; and (b) applies after the client so gives a notice, even if the notice does not result under section 77e in rescission of the agreement; “(2) The non-licensee is not entitled to recover by any means (including, for example, set-off or a claim on a quantum meruit) any brokerage, commission or other fee for which the client would, but for this section, have been liable to the non-licensee under or in connection with the agreement. Onus of establishing non-application of section 77h or 77j “77k. For the purposes of determining in a proceeding whether or not the non-licensee is, or was at a particular time, entitled as mentioned in subsection 77h (2) or 77j (2), it shall be presumed, unless the contrary is proved, that section 77h or 77j, as the case may be, applies, or applied at that time, as the case may be. Client may recover commission paid to non-licensee “77l. (1) Without limiting the generality of section 77g, if the client gives a notice under section 77d, the client may, even if the notice does not result under section 77e in rescission of the agreement, recover from the non-licensee as a debt the amount of any brokerage, commission or other fee that the client has paid to the non-licensee under or in connection with the agreement. “(2) The Commission may, if it considers that it is in the public interest to do so, bring an action under subsection (1) in the name of, and for the benefit of, the client. Remedies under this Division additional to other remedies “77m. The client’s rights and remedies under this Division are additional to, and do not prejudice, any other right or remedy of the client. “Division 3—Representatives Representatives of futures brokers “78a. A natural person shall not do an act as a representative of a futures broker (other than an exempt broker) unless: (a) the broker holds a futures broker’s licence or is a recognised futures broker; and (b) the person holds a proper authority from the broker. Representatives of futures advisers “78b. A natural person shall not do an act as a representative of a futures adviser (other than an exempt futures adviser) unless: (a) the futures adviser: (i) is also a futures broker and either holds a futures broker’s licence or is a recognised futures broker; or (ii) holds a futures adviser’s licence or is a recognised futures adviser; and (b) the person holds a proper authority from the futures adviser. Defence “78c. It is a defence to a prosecution for a contravention of section 78a or 78b constituted by an act done by a person as a representative of another person if it is proved that: (a) but for the revocation of, or the making under section 80d or a provision of a law of a participating State or participating Territory that corresponds with that section of an order relating to, a licence or recognised licence held by the other person, the act would not have been such a contravention; (b) when he or she did the act, the first-mentioned person: (i) believed in good faith that the other person held the licence or recognised licence; and (ii) was unaware of the revocation or order; and (c) in all the circumstances it was reasonable for the first-mentioned person so to believe and to be unaware of the revocation or order. Body corporate not to act as representative “78d. A body corporate shall not do an act as a representative of a person. Licensee to keep register of holders of proper authorities “78e. (1) A licensee shall establish a register of the persons who hold proper authorities from the licensee and shall keep it in accordance with this section. “(2) The register shall be in writing or in such other form as the Commission approves. “(3) The register shall contain, in relation to each person (if any) who holds a proper authority from the licensee: (a) a copy of the proper authority; (b) the person’s name; (c) the person’s current residential address; (d) unless the person’s current business address is the same as the licensee’s—the person’s current business address; and (e) such other information (if any) as is prescribed. “(4) A copy of a proper authority of a person from the licensee that subsection (3) requires the register to contain shall be included in the register within 2 business days after the person begins to hold that proper authority. “(5) Information that subsection (3) requires the register to contain in relation to a person shall be entered in the register within 2 business days after: (a) the person begins to hold a proper authority from the licensee; or (b) the licensee receives the information; whichever happens later. “(6) Within 2 business days after a person ceases to hold a proper authority from the licensee, the licensee shall: (a) in any case: (i) include, in a part of the register separate from the part in which copies of proper authorities are included under subsection (4); and the copy of the proper authority that was included in the last-mentioned part; and (b) unless, at the end of those 2 business days, the person again holds a proper authority from the licensee: (i) enter, in a part of the register separate from the part in which information is entered under subsection (5); and the information that has been entered in the last-mentioned part in relation to the person. “(7) Information that has been entered under paragraph (6) (b) in a separate part of the register shall be deemed for the purposes of subsections (3) and (5) not to be contained or entered in the register. Licensee to notify Commission of location and contents of register “78f. (1) This section has effect where a licensee keeps a register under section 78e. “(2) Within 14 days after establishing the register, the licensee shall lodge written notice of where the register is kept. “(3) As soon as practicable after changing the place where the register is kept, the licensee shall lodge written notice of the new place where the register is kept. “(4) Within 2 business days after the day on which a person begins to hold a particular proper authority from the licensee, the licensee shall, whether or not the person has previously held a proper authority from the licensee, lodge: (a) a copy of the first-mentioned proper authority; and (b) a written notice stating that the person began to hold that proper authority on that day. “(5) Within the period within which subsection 78e (5) requires the licensee to enter in the register information that the register must contain because of paragraph 78e (3) (b), (c), (d) or (e), the licensee shall lodge a written notice setting out the information and stating that the information has been, or is to be, entered in the register. “(6) Within 2 business days after a person ceases to hold a proper authority from the licensee, the licensee shall, unless at the end of those 2 business days the person again holds a proper authority from the licensee, lodge a written notice stating that the person has ceased to hold such a proper authority. Inspection and copying of register “78g. (1) A licensee shall ensure that a register kept under section 78e by the licensee is open for inspection without charge. “(2) A person may by writing request a licensee to give the person a copy of the whole, or of a specified part, of a register kept by the licensee under section 78e. “(3) A licensee shall comply with a request under subsection (2) within 2 business days after: (a) if the licensee requires the person to pay for the copy an amount of not more than the prescribed amount—receiving the amount from the person; or (b) otherwise—receiving the request. Commission may require production of authority “78h. (1) Where the Commission has reason to believe that a person: (a) holds a proper authority from a licensee or recognised licensee; or (b) has done an act as a representative of another person; then, whether or not the Commission knows who the licensee, recognised licensee or other person is, it may require the first-mentioned person to produce: (c) any proper authority from a licensee or recognised licensee; or (d) any invalid authority from a person; that the first-mentioned person holds. “(2) A person shall not, without reasonable excuse, refuse or fail to comply with a requirement under this section. Commission may give licensee information about representative “78j. (1) Where the Commission believes on reasonable grounds that: (a) a person (in this section called the ‘holder’) holds, or will hold, a proper authority from a licensee; (b) having regard to that fact, the Commission should give to the licensee particular information that the Commission has about the person; and (c) the information is true; the Commission may give the information to the licensee. “(2) Where the Commission gives information under subsection (1), the licensee or an officer of the licensee may, for a purpose connected with: (a) the licensee making a decision about what action (if any) to take in relation to the holder, having regard to, or to matters including, the information; or (b) the licensee taking action pursuant to such a decision; or for 2 or more such purposes, and for no other purpose, give to another person, make use of, or make a record of, some or all of the information. “(3) A person to whom information has been given, in accordance with subsection (2) or this subsection, for a purpose or purposes may, for that purpose or one or more of those purposes, and for no other purpose, give to another person, make use of, or make a record of, that information. “(4) Subject to subsections (2) and (3), a person shall not give to another person, make use of, or make a record of, information given by the Commission under subsection (1). “(5) A person has qualified privilege in respect of an act done by the person as permitted by subsection (2) or (3). “(6) A person to whom information is given in accordance with this section shall not: (a) give any of the information to a court; or (b) produce in a court a document that sets out some or all of the information; except: (c) for a purpose connected with: (i) the licensee making a decision about what action (if any) to take in relation to the holder, having regard to, or to matters including, some or all of the information; (ii) the licensee taking action pursuant to such a decision; or (iii) proving in a proceeding in that court that particular action taken by the licensee in relation to the holder was so taken pursuant to such a decision; or for 2 or more such purposes, and for no other purpose; (d) in a proceeding in that court, in so far as the proceeding relates to an alleged contravention of this section; (e) in a proceeding in respect of an ancillary offence relating to an offence against this section; or (f) in a proceeding in respect of the giving to a court of false information being or including some or all of the first-mentioned information. “(7) A reference in this section to a person taking action in relation to another person is a reference to the first-mentioned person: (a) taking action by way of making, terminating, or varying the terms and conditions of; or (b) otherwise taking action in relation to; an agreement, in so far as the agreement relates to the other person being employed by, or acting for or by arrangement with, the first-mentioned person in connection with a futures broking business or futures advice business carried on by the first-mentioned person. “(8) In this section: Holder of authority may be required to return it “78k. (1) Where a person holds a proper authority from a licensee but is neither employed by, nor authorised to act for or by arrangement with, the licensee, the licensee may, by writing given to the person, require the person to give the proper authority to the licensee within a specified period of not less than 2 business days. “(2) Where a person holds an invalid authority from another person, the other person may, by writing given to the first-mentioned person, require the first-mentioned person to give the invalid authority to the other person within a specified period of not less than 2 business days. “(3) A person shall not, without reasonable excuse, refuse or fail to comply with a requirement made of the person in accordance with subsection (1) or (2). “Division 4—Liability of principals for representatives’ conduct Conduct engaged in as a representative “79a. Where a person engages in conduct as a representative of another person (in this section called the ‘principal’), then, as between the principal and a third person (other than the Commission), the principal is liable in respect of that conduct in the same manner, and to the same extent, as if the principal had engaged in it. Liability where identity of principal unknown “79b. (1) This section applies for the purposes of a proceeding in a court where: (a) a person (in this section called the ‘representative’) engages in particular conduct while the person is a representative of 2 or more persons (in this section called the ‘indemnifying principals’); and (b) it is proved for the purposes of the proceeding that the representative engaged in the conduct as a representative of some person (in this section called the ‘unknown principal’) but it is not proved for those purposes who the unknown principal is. “(2) If only one of the indemnifying principals is a party to the proceeding, he, she or it is liable in respect of that conduct as if he, she or it were the unknown principal. “(3) If 2 or more of the indemnifying principals are parties to the proceeding, each of those parties is liable in respect of that conduct as if he, she or it were the unknown principal. Liability of principals where act done in reliance on representative’s conduct “79c. (1) This section applies where: (a) at a time when a person (in this section called the ‘representative’) is a representative of only one person (in this section called the ‘indemnifying principal’) or of 2 or more persons (in this section called the ‘indemnifying principals’), the representative: (i) engages in particular conduct; or (ii) proposes, or represents that the representative proposes, to engage in particular conduct; (b) another person (in this section called the ‘client’) does, or omits to do, a particular act because the client believes at a particular time in good faith that the representative engaged in, or proposes to engage in, as the case may be, that conduct: (i) on behalf of some person (in this section called the ‘assumed principal’) whether or not identified, or identifiable, at that time by the client; and (ii) in connection with a futures broking business or futures advice business carried on by the assumed principal; and (c) it is reasonable to expect that a person in the client’s circumstances would so believe and would do, or omit to do, as the case may be, that act because of that belief; whether or not that conduct is or would be within the scope of the representative’s employment by, or authority from, any person. (a) subparagraph (1) (a) (i) applies; or (b) subparagraph (1) (a) (ii) applies and the representative engages in that conduct; then: (c) as between the indemnifying principal and the client or a person claiming through the client, the indemnifying principal is liable; or (d) as between any of the indemnifying principals and the client or a person claiming through the client, each of the indemnifying principals is liable; as the case may be, in respect of that conduct in the same manner, and to the same extent, as if he, she or it had engaged in it. “(3) Without limiting the generality of subsection (2), the indemnifying principal, or each of the indemnifying principals, as the case may be, is liable to pay damages to the client in respect of any loss or damage that the client suffers as a result of doing, or omitting to do, as the case may be, the act referred to in paragraph (1) (b). “(4) If: (a) there are 2 or more indemnifying principals; (b) 2 or more of them are parties (in this subsection called the ‘indemnifying parties’) to a proceeding in a court; (c) it is proved for the purposes of the proceeding: (i) that the representative engaged in that conduct as a representative of some person; and (ii) who that person is; and (d) that person is among the indemnifying parties; subsections (2) and (3) do not apply, for the purposes of the proceeding, in relation to the indemnifying parties other than that person. “79d. (1) Where it is proved, for the purposes of a proceeding in a court that a person (in this subsection called the ‘representative’) engaged in particular conduct while the person was a representative of: (a) only one person (in this subsection called the ‘indemnifying principal’); or (b) 2 or more persons (in this subsection called the ‘indemnifying principals’); then, unless the contrary is proved for the purposes of the proceeding, it shall be presumed for those purposes that the representative engaged in the conduct as a representative of: (c) the indemnifying principal; or (d) as a representative of some person among the indemnifying principals; as the case may be. “(2) Where, for the purposes of establishing in a proceeding in a court that section 79c applies, it is proved that a person did, or omitted to do, a particular act because the person believed at a particular time in good faith that certain matters were the case, then, unless the contrary is proved for those purposes, it shall be presumed for those purposes that it is reasonable to expect that a person in the first-mentioned person’s circumstances would so believe and would do, or omit to do, as the case may be, that act because of that belief. No contracting out of liability for representative’s conduct “79e. (1) For the purposes of this section, a liability of a person: (a) in respect of conduct engaged in by another person as a representative of the first-mentioned person; or (b) arising under section 79c because another person has engaged in, proposed to engage in, or represented that the other person proposed to engage in, particular conduct; is a liability of the first-mentioned person in respect of the other person. “(2) Subject to this section, an agreement is void in so far as it purports to exclude, restrict or otherwise affect a liability of a person in respect of another person, or to provide for a person to be indemnified in respect of a liability of the person in respect of another person. “(3) Subsection (2) does not apply in relation to an agreement in so far as it: (a) is a contract of insurance; (b) provides for a representative of a person to indemnify the person in respect of a liability of the person in respect of the representative; or (c) provides for a licensee from whom a person holds a proper authority to indemnify another such licensee in respect of a liability of the other licensee in respect of the person. “(4) In paragraph (3) (c): “(5) A person shall not make, offer to make, or invite another person to offer to make, in relation to a liability of the first-mentioned person in respect of a person, an agreement that is or would be void, in whole or in part, by virtue of subsection (2). “79f. (1) Where 2 or more persons are liable under this Division in respect of the same conduct or the same loss or damage, they are so liable jointly and severally. “(2) Nothing in section 79a, 79b or 79c: (a) affects a liability arising otherwise than by virtue of this Division; (b) despite paragraph (a) of this subsection, entitles a person to be compensated more than once in respect of the same loss or damage; or (c) makes a person guilty of an offence. “Division 5—Excluding persons from the futures industry Power to revoke, without a hearing, licence held by natural person “80a. The Commission may, by written order, revoke a licence held by a natural person if the person: (a) becomes an insolvent under administration; (b) is convicted of serious fraud; (c) becomes incapable, through mental or physical incapacity, of managing his or her affairs; or (d) asks the Commission to revoke the licence. Power to revoke, without a hearing, licence held by body corporate “80b. The Commission may, by written order, revoke a licence held by a body corporate if: (a) the body ceases to carry on business; (b) the body becomes an externally-administered body corporate; (c) the body asks the Commission to revoke the licence; or (d) a director, secretary or executive officer of the body contravenes this Act because: (i) he or she does not hold a licence; or (ii) a licence he or she holds is suspended. Power to revoke licence after a hearing “80c. (1) Subject to section 80p, the Commission may, by written order, revoke a licence if: (a) the application for the licence contained matter that was false in a material particular or materially misleading; (b) there was an omission of material matter from the application for the licence; (c) the licensee contravenes a futures law; (d) the licensee contravenes a condition of the licence; (e) the licensee is a natural person and the Commission has reason to believe that he or she is not of good fame and character; (f) the licensee is a body corporate and the Commission is satisfied that the educational qualifications or experience of a person who: (i) is an officer of the body; and (ii) was not an officer of the body when the licence was granted; are or is inadequate having regard to the duties that the officer performs, or will perform, in connection with the holding of the licence; (g) the licensee is a body corporate and the Commission is satisfied that: (i) an officer of the body performs, or will perform, in connection with the holding of the licence, duties that are or include duties (in this paragraph called the ‘different duties’) other than those having regard to which the Commission was satisfied, before granting the licence, that the officer’s educational qualifications and experience were adequate; and (ii) the officer’s educational qualifications or experience are or is inadequate having regard to the different duties; (h) the licensee is a body corporate and: (i) a licence held by a director, secretary or executive officer of the body is suspended or revoked; or (ii) an order is made under section 80g against such a director, secretary or executive officer; (j) the Commission has reason to believe that the licensee has not performed efficiently, honestly and fairly the duties of a holder of a futures broker’s licence or a futures adviser’s licence, as the case requires; or (k) the Commission has reason to believe that the licensee will not perform those duties efficiently, honestly and fairly. “(2) In determining whether or not it has reason to believe as mentioned in paragraph (1) (e) or (k) in relation to a licensee, the Commission is not precluded from having regard to a matter that arose before the time when the licence was granted unless the Commission was aware of the matter at that time. Power to suspend licence instead of revoking it “80d. (1) Subject to section 80p, where: (a) section 80a or 80b empowers the Commission to revoke a licence otherwise than because the licensee has asked for the revocation; or (b) the Commission is empowered by virtue of paragraph 80c (1) (c), (d), (f), (g), (h), (j) or (k) to revoke a licence; the Commission may, if it considers it desirable to do so, instead: (c) by written order, suspend the licence for a specified period; or (d) by written order, prohibit the licensee, either permanently or for a specified period, from doing specified acts, being acts that section 61 or 63 would prohibit the licensee from doing if it did not hold the licence. “(2) The Commission may at any time, by written order, vary or revoke an order in force under this section. “(3) For the purposes of sections 61, 63, 78a and 78b, a licensee or recognised licensee shall be taken not to hold the licence or recognised licence at any time during a period for which the licence or recognised licence is suspended. “(4) Where an order in force under this section prohibits a licensee as mentioned in paragraph (1) (d): (a) the licensee shall not contravene the order; and (b) in relation to the doing by a person, as a representative of the licensee, of an act specified in the order, sections 78a and 78b apply, or apply during the period specified in the order, as the case requires, as if the licensee did not hold the licence. “(5) Subsection (4) applies in relation to a person who holds a licence within the meaning of a corresponding law of a participating State or participating Territory and so applies as if: (a) a reference in that subsection to a licensee were a reference to the person; and (b) a reference in that subsection to this section or to paragraph (1) (d) were a reference to a provision of a law of that State or Territory that corresponds with this section or that paragraph, as the case may be. “(6) The effect that subsection (4) has by virtue of subsection (5) is additional to, and does not prejudice, the effect subsection (4) otherwise has. “(7) A reference in this Act (other than this section) to the Commission suspending a licence includes a reference to the Commission making under paragraph (1) (d) an order relating to the licence. “(8) A reference in this Act to the Commission suspending a recognised licence includes a reference to the Commission making under a provision of a law of a participating State or participating Territory that corresponds with paragraph (1) (d) an order relating to the recognised licence. Power to make banning order where licence revoked or suspended “80e. Subject to section 80p, where the Commission: (a) revokes under section 80a; (b) revokes by virtue of paragraph 80c (1) (a), (b), (c), (d), (j) or (k); (c) revokes by virtue of paragraph 80c (1) (e); (d) suspends by virtue of paragraph 80d (1) (a); or (e) suspends by virtue of paragraph 80d (1) (b); a licence held by a natural person, it may also make a banning order against the person. Power to make banning order against unlicensed person “80f. Subject to section 80p, the Commission may make a banning order against a natural person (other than a licensee or recognised licensee) if: (a) he or she becomes an insolvent under administration; (b) he or she is convicted of serious fraud; (c) he or she becomes incapable, through mental or physical incapacity, of managing his or her affairs; (d) he or she contravenes a futures law; (e) the Commission has reason to believe that he or she is not of good fame and character; (f) the Commission has reason to believe that he or she has not performed efficiently, honestly and fairly the duties of: (ii) a representative of a futures adviser; or (g) the Commission has reason to believe that he or she will not perform efficiently, honestly and fairly the duties of: (ii) a representative of a futures adviser. Nature of banning order “80g. (1) Where this Division empowers the Commission to make a banning order against a person, the Commission may, by written order, prohibit the person: (a) in any case—permanently; or (b) except where the Commission is empowered by virtue of paragraph 80e (c) or 80f (e) to make the order—for a specified period; from doing an act as: (c) a representative of a futures broker; (d) a representative of a futures adviser; or (e) a representative of a futures broker or of a futures adviser; “(2) The Commission shall not vary or revoke a banning order except under section 80h, 80j or 80k. Exceptions to banning order “80h. (1) An order made against a person under subsection 80g (1) may include a provision that permits the person, subject to such conditions (if any) as are specified, to do, or to do in specified circumstances, specified acts that the order would otherwise prohibit the person from doing. “(2) Subject to section 80p, the Commission may, at any time, by written order, vary a banning order against a person: (a) by adding a provision that permits the person as mentioned in subsection (1); (b) by varying such a provision in relation to conditions, circumstances or acts specified in the provision; (c) by omitting such a provision and substituting another such provision; or (d) by omitting such a provision. Variation or revocation of banning order on application “80j. (1) Subject to sections 80k and 80p, this section has effect where a person applies to the Commission to vary or revoke a banning order relating to the person. (a) the person is not an insolvent under administration; (b) the Commission has no reason to believe that the person is not of good fame and character; and (c) the Commission has no reason to believe that the person will not perform efficiently, honestly and fairly the duties of: (ii) a representative of a futures adviser; the Commission shall, by written order: (d) if only one of subparagraphs (c) (i) and (ii) applies—vary the banning order so that it no longer prohibits the person from doing an act as a representative of a futures broker or of a futures adviser, as the case may be; or (e) otherwise—revoke the banning order. “(4) In determining whether or not it has reason to believe as mentioned in paragraph (2) (b) or (c), the Commission shall have regard to any conviction of the person, during the 10 years ending on the day of the application, of serious fraud. “(5) Nothing in subsection (4) limits the matters to which the Commission may have regard: (a) in deciding on the application; or Revocation of banning order in certain cases “80k. Where: (a) section 80j requires the Commission to vary a banning order so that it no longer has a particular operation; and (b) the order has no other operation; the Commission shall, by written order, instead revoke the banning order. Effect and publication of orders under this Division “80l. (1) An order by the Commission under this Division takes effect when served on the person to whom the order relates. “(2) As soon as practicable on or after the day on which an order by the Commission under this Division takes effect, the Commission shall publish in the Gazette a notice that sets out a copy of: (a) if the order is made under section 80a, 80b, 80c, 80d or 80g or revokes a banning order—the first-mentioned order; or (b) if the order varies a banning order—the banning order as in force immediately after the first-mentioned order takes effect; and states that the first-mentioned order, or the banning order as so in force, as the case may be, took effect on that day. (a) but for this subsection, subsection (2) would require publication of a notice setting out a copy of a banning order as in force at a particular time; (b) the banning order as so in force includes a provision that permits a person as mentioned in subsection 80h (1); and (c) in the Commission’s opinion, the notice would be unreasonably long if it set out a copy of the whole of that provision; the notice may, instead of setting out a copy of that provision, set out a summary of the provision’s effect. Contravention of banning order “80m. A person shall not contravene a banning order or recognised banning order relating to the person. Banned person ineligible for licence “80n. The Commission shall not grant a futures broker’s licence or a futures adviser’s licence to a person if a banning order or recognised banning order prohibits the person (except as permitted by the order) from doing an act as a representative of a futures broker, or of a futures adviser, as the case may be. Opportunity for hearing “80p. (1) The Commission shall not: (a) refuse an application for a licence on the ground, or grounds including the ground, that paragraph 66 (2) (d), (e) or (f) or 66a (2) (d) or (e) does not apply in relation to the applicant; (b) impose conditions on a licence; (c) vary the conditions of a licence; (d) revoke or suspend a licence otherwise than by virtue of section 80a or 80b or paragraph 80d (1) (a); (e) make, otherwise than by virtue of paragraph 80e (a) or (d) or 80f (a), (b) or (c), an order under section 80g against a person; (f) make under subsection 80h (2) an order varying a banning order against a person; or (g) refuse an application by a person under section 80j; unless the Commission complies with subsection (2) of this section. “(2) The Commission shall give the applicant, licensee or person, as the case may be, an opportunity: (a) to appear at a hearing before the Commission that takes place in private; and (b) to make submissions and give evidence to the Commission in relation to the matter. Disqualification by the Court “80q. (1) Where the Commission: (a) revokes under section 80a or 80b or subsection 80c (1) a licence held by a person; or (b) makes under section 80g against a person an order that is to operate otherwise than only for a specified period; the Commission may apply to the Court for an order or orders under this section in relation to the person. “(2) On an application under subsection (1), the Court may make one or more of the following: (a) an order disqualifying the person, permanently or for a specified period, from holding: (i) a futures broker’s licence; (ii) a futures adviser’s licence; or (iii) a futures broker’s licence or a futures adviser’s licence; (b) an order prohibiting the person, permanently or for a specified period, from doing an act as: (i) a representative of a futures broker; (ii) a representative of a futures adviser; or (iii) a representative of a futures broker or of a futures adviser; (c) such other order as it thinks fit; or may refuse the application. “(3) The Court may revoke or vary an order in force under this section. Effect of order under section 80q or corresponding law “80r. (1) The Commission shall not grant a futures broker’s licence or a futures adviser’s licence to a person whom an order disqualifies from holding a futures broker’s licence or a futures adviser’s licence, as the case may be, under this Part or the provisions of a law of a participating State or participating Territory that correspond with this Part. “(2) A person shall not contravene an order that prohibits the person from doing an act as: (a) a representative of a futures broker; (b) a representative of a futures adviser; or (c) a representative of a futures broker or of a futures adviser; “(3) In this section: ‘order’ means: (a) an order in force under section 80q or a provision of a law of a participating State or participating Territory that corresponds with that section; or (b) an order as it has effect because of subsection 80s (2) or a provision of a law of a participating State or participating Territory that corresponds with that subsection. Effect of order under previous Territory law corresponding with section 80q “80s. (1) This section applies where, immediately before the commencement of section 75 of the Co-operative Scheme Legislation Amendment Act 1989, a person was disqualified, either permanently or for a period, because of an order that was made under subsection 78 (4) of this Act as in force before that commencement, from holding: (a) a futures broker’s licence; (b) a futures adviser’s licence; (c) a futures broker’s representative’s licence; or (d) a futures adviser’s representative’s licence. “(2) As from that commencement, the order has effect for the purposes of this Act as if it were an order in force under section 80q: (a) disqualifying the person, permanently or for that period, as the case may be, from holding: (i) if paragraph (1) (a) applies—a futures broker’s licence; or (ii) if paragraph (1) (b) applies—a futures adviser’s licence; or (b) prohibiting the person, permanently or for that period, as the case may be, from doing an act as: (i) if paragraph (1) (c) applies—a representative of a futures broker; or (ii) if paragraph (1) (d) applies—a representative of a futures adviser; as the case requires.”. Division 3—Consequential amendments of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 19804 Definitions 76\. Section 9 of the Principal Act is amended by inserting the following definitions: “ ‘ancillary offence’ means an offence constituted by: (a) aiding, abetting, counselling or procuring the commission of an offence; (b) being, by act or omission, in any way, directly or indirectly, knowingly concerned in, or party to, the commission of an offence; (c) receiving or assisting a person who is, to the offender’s knowledge, guilty of an offence, in order to enable the person to escape punishment or to dispose of the proceeds of the last-mentioned offence; (d) attempting or conspiring to commit an offence; or (e) inciting, urging, aiding or encouraging, or printing or publishing any writing that incites, urges, aids or encourages, the commission of an offence or the carrying on of any operations for or by the commission of an offence; ‘qualified privilege’ has the meaning given by section 38c;”. 77\. After section 38b of the Principal Act the following section is inserted in Part III: Qualified privilege “38c. (1) This section applies where a provision of a relevant Act provides that a person has qualified privilege in respect of an act, matter or thing. “(2) The person is not, in the absence of malice on the person’s part, liable to an action for defamation, at the suit of a person, in respect of that act, matter or thing. “(3) Neither that provision nor this section limits or affects any right, privilege or immunity that a person has, apart from that provision or this section, as defendant in an action for defamation.”. PART 9—AMENDMENTS OF CO-OPERATIVE SCHEME FEES ACTS Division 1—Amendment of Companies (Fees) Act 19805 78\. Sections 3, 4 and 5 of the Principal Act are repealed and the following sections are substituted: “(2) Subject to subsection (1), an expression has the same meaning in this Act as in the Companies Act 1981. (a) the lodgment of documents under the Companies Act 1981; (d) the making available by the Commission, under that Act, of information (whether in the form of a document or otherwise); (f) the issuing of documents or copies of documents, the granting of licences, consents or approvals, or the doing of other acts, by the Ministerial Council or the Commission under that Act; (g) the making of inquiries of, or applications to, the Ministerial Council or the Commission in relation to matters arising under that Act; and “(2) The power conferred by subsection (1) extends, by virtue of this subsection but not otherwise, to prescribing fees that, but for subsection 6 (2), could not be prescribed under this Act unless it were a law imposing taxation but that could be if it were. “(3) The Governor-General’s power to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council. “5\. (1) The regulations may be of general or specially limited application or may differ according to differences in time, locality, place or circumstance. “(2) The regulations may provide for a fee for a chargeable matter to be determined by reference to a prescribed matter or prescribed matters, whether or not the prescribed matter, or any of the prescribed matters, has a direct or indirect connection with the chargeable matter. “6\. (1) Subject to subsection (2), where the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter. “(2) Despite subsection (1), where, by virtue of subsection 4 (2), the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter if, and only if, the fee is imposed by another Act. “7\. Despite section 6, where but for this section the fee, or the total of the fees, payable under that section for a chargeable matter would exceed $25,000, so much of that fee, or of that total, as exceeds $25,000 is not payable. Fee where document taken to be lodged “8\. (1) This section applies where: (a) because of section 265a of the Companies Act 1981, a company is taken, for the purposes of that Act, to lodge a document at a particular time; and (b) if the company had in fact lodged the document at that time, a fee would have been payable under section 6 of this Act for the lodgment. “(2) The company shall be taken, for the purposes of this Act (other than section 9), to lodge the document at that time. “(3) As from that time, the fee that, because of subsection (2) of this section, is payable under section 6 for the lodgment of the document is a debt due to the Commonwealth and payable by the company. “9\. (1) Where: “(2) Subsection (1) does not apply where, at the time when the document is submitted for lodgment, the amount of the fee cannot be ascertained, but if the Commission, before or at that time, requires under section 12 the payment of a deposit on account of the fee, the document shall be taken not to have been lodged until the deposit or the fee has been paid. “10\. (1) Where a fee is payable under section 6 for a matter involving the doing of an act by the Ministerial Council or the Commission, the Ministerial Council or the Commission shall not do that act until the fee is paid. (b) if the Commission has required under section 12 the payment of a deposit on account of the fee—the deposit has been paid. Effect of sections 9 and 10 “11\. Sections 9 and 10 have effect despite anything in the Companies Act 1981. “12\. Where the amount of a fee payable under section 6 for: as the case may be, require the payment to the Commission, on account of the fee, of a deposit of a specified amount that the Commission considers it reasonable to expect will be the amount of the fee. “13\. (1) This section applies where the amount of a fee payable under section 6 cannot be ascertained when the fee becomes payable, but at a later time becomes able to be ascertained. “(2) If a person has paid a deposit on account of the fee, the Commission shall apply towards payment of the fee so much of the deposit as does not exceed the amount of the fee and: (a) if the amount of the deposit exceeds the amount of the fee—the Commission shall refund to the person the amount of the excess; or (b) if the amount of the fee exceeds the amount of the deposit—as from the later time, so much of the fee as exceeds the amount of the deposit is a debt due to the Commonwealth and payable by the person. “(3) Otherwise, the fee is, as from the later time, a debt due to the Commonwealth and payable by the person whom the Commission determines in writing to be the person who it is reasonable to expect would have paid the fee had the fee been able to be ascertained when it became payable. “14\. Nothing in this Act prevents the Commonwealth from: (a) waiving or reducing, in a particular case or in particular classes of cases, fees that would otherwise be payable under this Act; or “15\. The Commission may recover in a court of competent jurisdiction a debt due under this Act. “16\. Nothing in this Act shall be taken to impose taxation. “17\. To avoid doubt, nothing in this Act or in the Companies (Fees: Taxation Component) Act 1989, and nothing done under this Act: (a) imposes on the Commission a duty to allow the inspection or search of a register or document, or to make available information; or except so far as such a duty or right would exist under some other law but for the effect of section 10.”. Division 2—Amendment of Companies (Acquisition of Shares—Fees) Act 19806 79. Sections 3, 4 and 5 of the Principal Act are repealed and the following sections are substituted: “(2) Subject to subsection (1), an expression has the same meaning in this Act as in the Companies (Acquisition of Shares) Act 1980. (a) the lodgment of documents under the Companies (Acquisition of Shares) Act 1980; (d) the making available by the Commission, under that Act, of information (whether in the form of a document or otherwise); (f) the issuing of documents or copies of documents, the granting of licences, consents or approvals, or the doing of other acts, by the Ministerial Council or the Commission under that Act; (g) the making of inquiries of, or applications to, the Ministerial Council or the Commission in relation to matters arising under that Act; and “(2) The power conferred by subsection (1) extends, by virtue of this subsection but not otherwise, to prescribing fees that, but for subsection 6 (2), could not be prescribed under this Act unless it were a law imposing taxation but that could be if it were. “(3) The Governor-General’s power to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council. “5\. (1) The regulations may be of general or specially limited application or may differ according to differences in time, locality, place or circumstance. “(2) The regulations may provide for a fee for a chargeable matter to be determined by reference to a prescribed matter or prescribed matters, whether or not the prescribed matter, or any of the prescribed matters, has a direct or indirect connection with the chargeable matter. “6\. (1) Subject to subsection (2), where the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter. “(2) Despite subsection (1), where, by virtue of subsection 4 (2), the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter if, and only if, the fee is imposed by another Act. “7\. Despite section 6, where but for this section the fee, or the total of the fees, payable under that section for a chargeable matter would exceed $25,000, so much of that fee, or of that total, as exceeds $25,000 is not payable. “(2) Subsection (1) does not apply where, at the time when the document is submitted for lodgment, the amount of the fee cannot be ascertained, but if the Commission, before or at that time, requires under section 11 the payment of a deposit on account of the fee, the document shall be taken not to have been lodged until the deposit or the fee has been paid. “9\. (1) Where a fee is payable under section 6 for a matter involving the doing of an act by the Ministerial Council or the Commission, the Ministerial Council or the Commission shall not do that act until the fee is paid. (b) if the Commission has required under section 11 the payment of a deposit on account of the fee—the deposit has been paid. “10\. Sections 8 and 9 have effect despite anything in the Companies (Acquisition of Shares) Act 1980. as the case may be, require the payment to the Commission, on account of the fee, of a deposit of a specified amount that the Commission considers it reasonable to expect will be the amount of the fee. “12\. (1) This section applies where the amount of a fee payable under section 6 cannot be ascertained when the fee becomes payable, but at a later time becomes able to be ascertained. “(2) If a person has paid a deposit on account of the fee, the Commission shall apply towards payment of the fee so much of the deposit as does not exceed the amount of the fee and: (a) if the amount of the deposit exceeds the amount of the fee—the Commission shall refund to the person the amount of the excess; or (b) if the amount of the fee exceeds the amount of the deposit—as from the later time, so much of the fee as exceeds the amount of the deposit is a debt due to the Commonwealth and payable by the person. “(3) Otherwise, the fee is, as from the later time, a debt due to the Commonwealth and payable by the person whom the Commission determines in writing to be the person who it is reasonable to expect would have paid the fee had the fee been able to be ascertained when it became payable. (a) waiving or reducing, in a particular case or in particular classes of cases, fees that would otherwise be payable under this Act; or “16\. To avoid doubt, nothing in this Act or in the Companies (Acquisition of Shares—Fees: Taxation Component) Act 1989, and nothing done under this Act: (a) imposes on the Commission a duty to allow the inspection or search of a register or document, or to make available information; or Division 3—Amendment of Securities Industry (Fees) Act 19807 80\. Sections 3, 4 and 5 of the Principal Act are repealed and the following sections are substituted: “3\. (1) In this Act, unless the contrary intention appears: ‘act’ includes thing; “(2) Subject to subsection (1), an expression has the same meaning in this Act as in the Securities Industry Act 1980. (a) the lodgment of documents under the Securities Industry Act 1980; (d) the making available by the Commission, under that Act, of information (whether in the form of a document or otherwise); (f) the issuing of documents or copies of documents, the granting of licences, consents or approvals, or the doing of other acts, by the Ministerial Council or the Commission under that Act; (g) the making of inquiries of, or applications to, the Ministerial Council or the Commission in relation to matters arising under that Act; and “(2) The power conferred by subsection (1) extends, by virtue of this subsection but not otherwise, to prescribing fees that, but for subsection 6 (2), could not be prescribed under this Act unless it were a law imposing taxation but that could be if it were. “(3) The Governor-General’s power to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council. “5\. (1) The regulations may be of general or specially limited application or may differ according to differences in time, locality, place or circumstance. “(2) The regulations may provide for a fee for a chargeable matter to be determined by reference to a prescribed matter or prescribed matters, whether or not the prescribed matter, or any of the prescribed matters, has a direct or indirect connection with the chargeable matter. “6\. (1) Subject to subsection (2), where the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter. “(2) Despite subsection (1), where, by virtue of subsection 4 (2), the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter if, and only if, the fee is imposed by another Act. “7\. Despite section 6, where but for this section the fee, or the total of the fees, payable under that section for a chargeable matter would exceed $25,000, so much of that fee, or of that total, as exceeds $25,000 is not payable. “(2) Subsection (1) does not apply where, at the time when the document is submitted for lodgment, the amount of the fee cannot be ascertained, but if the Commission, before or at that time, requires under section 11 the payment of a deposit on account of the fee, the document shall be taken not to have been lodged until the deposit or the fee has been paid. “9\. (1) Where a fee is payable under section 6 for a matter involving the doing of an act by the Ministerial Council or the Commission, the Ministerial Council or the Commission shall not do that act until the fee is paid. (b) if the Commission has required under section 11 the payment of a deposit on account of the fee—the deposit has been paid. “10\. Sections 8 and 9 have effect despite anything in the Securities Industry Act 1980. as the case may be, require the payment to the Commission, on account of the fee, of a deposit of a specified amount that the Commission considers it reasonable to expect will be the amount of the fee. “12\. (1) This section applies where the amount of a fee payable under section 6 cannot be ascertained when the fee becomes payable, but at a later time becomes able to be ascertained. “(2) If a person has paid a deposit on account of the fee, the Commission shall apply towards payment of the fee so much of the deposit as does not exceed the amount of the fee and: (a) if the amount of the deposit exceeds the amount of the fee—the Commission shall refund to the person the amount of the excess; or (b) if the amount of the fee exceeds the amount of the deposit—as from the later time, so much of the fee as exceeds the amount of the deposit is a debt due to the Commonwealth and payable by the person. “(3) Otherwise, the fee is, as from the later time, a debt due to the Commonwealth and payable by the person whom the Commission determines in writing to be the person who it is reasonable to expect would have paid the fee had the fee been able to be ascertained when it became payable. (a) waiving or reducing, in a particular case or in particular classes of cases, fees that would otherwise be payable under this Act; or “16\. To avoid doubt, nothing in this Act or in the Securities Industry (Fees: Taxation Component) Act 1989, and nothing done under this Act: (a) imposes on the Commission a duty to allow the inspection or search of a register or document, or to make available information; or Division 4—Amendment of Futures Industry (Fees) Act 19868 81\. Sections 3, 4 and 5 of the Principal Act are repealed and the following sections are substituted: “(2) Subject to subsection (1), an expression has the same meaning in this Act as in the Futures Industry Act 1986. (a) the lodgment of documents under the Futures Industry Act 1986; (d) the making available by the Commission, under that Act, of information (whether in the form of a document or otherwise); (f) the issuing of documents or copies of documents, the granting of licences, consents or approvals, or the doing of other acts, by the Ministerial Council or the Commission under that Act; (g) the making of inquiries of, or applications to, the Ministerial Council or the Commission in relation to matters arising under that Act; and “(2) The power conferred by subsection (1) extends, by virtue of this subsection but not otherwise, to prescribing fees that, but for subsection 6 (2), could not be prescribed under this Act unless it were a law imposing taxation but that could be if it were. “(3) The Governor-General’s power to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council. “5\. (1) The regulations may be of general or specially limited application or may differ according to differences in time, locality, place or circumstance. “(2) The regulations may provide for a fee for a chargeable matter to be determined by reference to a prescribed matter or prescribed matters, whether or not the prescribed matter, or any of the prescribed matters, has a direct or indirect connection with the chargeable matter. “6\. (1) Subject to subsection (2), where the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter. “(2) Despite subsection (1), where, by virtue of subsection 4 (2), the regulations prescribe a fee for a chargeable matter, the fee shall be paid to the Commonwealth for that matter if, and only if, the fee is imposed by another Act. “7\. Despite section 6, where but for this section the fee, or the total of the fees, payable under that section for a chargeable matter would exceed $25,000, so much of that fee, or of that total, as exceeds $25,000 is not payable. “(2) Subsection (1) does not apply where, at the time when the document is submitted for lodgment, the amount of the fee cannot be ascertained, but if the Commission, before or at that time, requires under section 11 the payment of a deposit on account of the fee, the document shall be taken not to have been lodged until the deposit or the fee has been paid. “9\. (1) Where a fee is payable under section 6 for a matter involving the doing of an act by the Ministerial Council or the Commission, the Ministerial Council or the Commission shall not do that act until the fee is paid. (b) if the Commission has required under section 11 the payment of a deposit on account of the fee—the deposit has been paid. “10\. Sections 8 and 9 have effect despite anything in the Futures Industry Act 1986. as the case may be, require the payment to the Commission, on account of the fee, of a deposit of a specified amount that the Commission considers it reasonable to expect will be the amount of the fee. “12\. (1) This section applies where the amount of a fee payable under section 6 cannot be ascertained when the fee becomes payable, but at a later time becomes able to be ascertained. “(2) If a person has paid a deposit on account of the fee, the Commission shall apply towards payment of the fee so much of the deposit as does not exceed the amount of the fee and: (a) if the amount of the deposit exceeds the amount of the fee—the Commission shall refund to the person the amount of the excess; or (b) if the amount of the fee exceeds the amount of the deposit—as from the later time, so much of the fee as exceeds the amount of the deposit is a debt due to the Commonwealth and payable by the person. “(3) Otherwise, the fee is, as from the later time, a debt due to the Commonwealth and payable by the person whom the Commission determines in writing to be the person who it is reasonable to expect would have paid the fee had the fee been able to be ascertained when it became payable. (a) waiving or reducing, in a particular case or in particular classes of cases, fees that would otherwise be payable under this Act; or “16\. To avoid doubt, nothing in this Act or in the Futures Industry (Fees: Taxation Component) Act 1989, and nothing done under this Act: (a) imposes on the Commission a duty to allow the inspection or search of a register or document, or to make available information; or Division 5—Saving of existing Fees Regulations Effect of regulations after commencement of this section 82\. At and after the commencement of this section, the regulations that, immediately before that commencement, were in force under each of the Acts amended by Divisions 1, 2, 3 and 4 have effect as if they were regulations made at that commencement under that Act as amended by this Act. NOTES 1\. No. 89, 1981, as amended. For previous amendments, see No. 153, 1981; Nos. 26 and 80, 1982; No. 108, 1983; No. 13, 1984; Nos. 140, 192 and 193, 1985; Nos. 68 and 163, 1986; and Nos. 6 and 99, 1987. 2\. No. 66, 1980, as amended. For previous amendments, see Nos. 3, 96 and 153, 1981; No. 26, 1982; No. 108, 1983; No. 13, 1984; No. 192, 1985; No. 74, 1986; and No. 6, 1987. 3\. No. 72, 1986. 4\. No. 68, 1980, as amended. For previous amendments, see Nos. 4, 98 and 153, 1981; No. 108, 1983; No. 13, 1984; No. 192, 1985; and No. 6, 1987. 5\. No. 90, 1981, as amended. For previous amendments, see No. 153, 1981; and No. 120, 1985. 6\. No. 65, 1980, as amended. For previous amendments, see No. 95, 1981. 7\. No. 67, 1980, as amended. For previous amendments, see Nos. 97 and 153, 1981. 8\. No. 73, 1986. \[Minister’s second reading speech made in— House of Representatives on 12 April 1989 Senate on 26 May 1989\]