This Act has been repealed and is no longer in force. It is retained for historical reference.
Jurisdiction
Commonwealth
Act Number
72 of 1986
Collection
act
Plain English Summary
8/10 complexity
This Act creates a comprehensive regulatory scheme for the futures trading industry in the Australian Capital Territory. It establishes a licensing system for anyone who wants to trade futures contracts on behalf of others or give advice about futures, while protecting investors from fraud and market misconduct.
Who does this affect?
Futures brokers: People or companies that buy/sell futures contracts for clients must hold a licence and meet strict qualification and character requirements.
Futures advisers: People who give advice or publish reports about futures contracts must also be licensed.
Representatives: Employees who act on behalf of licensed brokers or advisers need their own specific licences.
Exchanges and clearing houses: Bodies that operate futures markets or provide settlement services must be approved by the Ministerial Council and follow strict business rules.
Clients: Anyone who invests through a futures broker receives protections including segregated accounts (client money kept separate from the broker's own funds) and access to fidelity funds if a broker defrauds them.
Key protections and rules
Segregation of client money: Brokers must keep client funds in separate bank accounts and cannot use them to pay their own debts.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Fidelity funds: Industry-funded compensation schemes that pay out if a broker commits fraud or steals client money (up to $500,000 per claim).
Market integrity: Prohibitions on insider trading, market manipulation, false trading, and fraud.
Investigation powers: The Commission can compel documents, conduct examinations on oath, and seize books with court warrants.
Orderly markets: The Commission can intervene in emergencies to close markets, suspend trading, or force settlement of contracts to prevent market collapse.
Strict record keeping: Brokers must maintain detailed accounts for 5-7 years and submit to annual audits.
Why this matters
The Act ensures that futures markets operate fairly and honestly, protecting investors from fraud while maintaining confidence in the financial system. It creates a safety net for clients if their broker becomes insolvent or acts dishonestly, and gives regulators powerful tools to detect and punish market misconduct.