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Commonwealth act
This Act has been repealed and is no longer in force. It is retained for historical reference.
This Act sets up a regulatory framework for the futures industry in the Australian Capital Territory. It creates licensing and conduct requirements for brokers, advisers and their representatives; approves and supervises exchanges, clearing houses and associations; empowers a Commission and Ministerial Council to inspect books, order market restrictions and pursue civil or criminal remedies; and establishes member-funded fidelity funds to compensate clients for fraud or defalcation.
Brokers, exchanges, clearing houses and their members bear compliance costs, levies and potential penalties. The law changes behaviour by restricting who may deal or advise, imposing disclosure, reporting and audit duties, and outlawing insider trading and market manipulation.
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Direct links to the current provisions in Futures Industry Act 1986.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Futures Industry Act 1986
No. 72 of 1986
TABLE OF PROVISIONS
PART I—PRELIMINARY
Clause
Short title
Commencement
Object
Interpretation
Agreements
Associated persons
Dealing in futures contracts
Dealings and transactions on a person’s own account
Discretionary accounts
Exempt brokers
Certain persons not to be taken to be recognised licensees
PART II—ADMINISTRATION
Division 1—General
Interpretation
Power of Commission to require production of books
Power of magistrate to issue warrant to seize books
Offences
Copies or extracts to be admitted in evidence
Privilege
Disclosure to Commission
Investigation of certain matters
Power of Court to make certain orders
TABLE OF PROVISIONS—continued
Clause
Division 2—Investigations
Interpretation
Investigations
Conduct of investigations
Powers of Commission and inspectors appointed under corresponding laws
Powers of inspectors
Investigation deemed to be a proceeding
Record of examination
Record to accompany report
Admissibility of record of examination in evidence in proceedings against person examined
Admissibility in other proceedings of statements made at an examination
Weight of evidence
Credibility of person who made statements
Determination of objection to admissibility of statements
Delegation by inspector
Reports of investigations
Report of inspector
Commission’s powers in respect of books
Privileged communications
Expenses of investigation
Concealing, &c, of books relating to futures contracts
Power of Commission to make certain orders
Certain powers not to be delegated
Division 3—Futures Consultative Committee
Constitution and functions of Futures Consultative Committee
Meetings of Futures Consultative Committee
PART III—FUTURES EXCHANGES, CLEARING HOUSES AND FUTURES ASSOCIATIONS
Establishment of futures markets
Power of Ministerial Council to approve futures exchange
Provision of clearing house facilities
Power of Ministerial Council to approve clearing house
Publication of instruments executed under section 40, 41 and 43
Power of Ministerial Council to approve futures association
Suspension or cancellation of approval
Notification of approval, &c, of futures association
Appeal to the Court against certain decisions of futures exchanges and futures associations
Commission to be notified of amendments of business rules
Orderly markets in futures contracts—functions and powers of futures exchanges and clearing houses
Orderly markets in futures contracts—powers of Commission
Futures exchanges and others to assist Commission
Power of Court to order observance or enforcement of business rules of futures exchange, clearing house or futures association
Effect of certain laws on certain agreements
PART IV—LICENCES
Proclaimed day
Futures broker’s licence
Futures broker’s representatives
Futures advisers
Futures adviser’s representatives
Application for grant of licence
Grant of futures broker’s licence or futures adviser’s licence
Grant of representative’s licence
TABLE OF PROVISIONS—continued
Clause
Change of principals of representative
Conditions to which licence is subject
Holder of licence to notify prescribed bodies of breach of condition or restriction applicable to licence
Furnishing of information and statements to Commission
Register of Licence Holders
Notification of change in particulars
Annual statement to be lodged with Commission
Time for lodging annual statement
Commission may extend period for lodging statement
Revocation and suspension of licences
Further provisions relating to revocation and suspension of licences
Holder of licence to be deemed not to be holder while licence suspended
Opportunity for hearing
PART V—CONDUCT OF FUTURES BUSINESS
Certain representations prohibited
Undesirable advertising
Issue of contract notes
Futures broker to furnish monthly statement to client
Dealings by futures broker on own account
Segregation of client money and property
Futures broker to give certain information to prospective clients
PART VI—ACCOUNTS AND AUDIT
Interpretation
Application of Part
Accounts to be kept by futures brokers
Property in custody of futures broker
Appointment of auditor by futures broker
Removal and resignation of auditors
Fees and expenses of auditors
Futures brokers’ accounts
Auditor’s right of access to records, information, &c.
Auditor to report to Commission in certain cases
Certain matters to be reported to Commission
Defamation
This Part not to affect right of futures exchange or futures association to impose obligations, &c, on members
Power of Court to restrain dealings with futures broker’s accounts
Duty of banker or body corporate to make full disclosure
Power of Court to make further orders and give directions
Power of Court to make order relating to payment of money
PART VII—FIDELITY FUNDS
Interpretation
Establishment of fidelity funds
Money constituting fidelity fund
Fund to be kept in separate bank account
Payments out of fund
Accounts of fund
Management sub-committee
Contribution to fund
Levy in addition to annual contributions
Power of relevant organisation to make advances to fund
Investment of fund
Application of fund
Claims against fund
Rights of innocent partner in relation to fund
TABLE OF PROVISIONS—continued
Clause
Notice calling for claims against fund
Power of Board to settle claims
Form of order of Court establishing claim
Power of Board to require production of documents, &c.
Subrogation of relevant organisation to rights, &c, of claimant on payment from fund
Payment of claims only from fund
Provisions where fund insufficient to meet claims or where claims exceed total amount payable
Power of relevant organisation to enter into contracts of insurance or indemnity
Application of insurance money
PART VIII—OFFENCES
Dealings by futures broker on behalf of others
Prohibition of dealings by insiders in futures contracts relating to securities
Futures market manipulation
False trading and market rigging
False or misleading statements, &c.
Fraudulently inducing person to deal in futures contracts
Dissemination of information about illegal transactions
Fraud in connection with dealings in futures contracts
Penalties
Compensation for loss, &c.
Sequence of transmission and execution of orders
Dealings by employees of licence holders
PART IX—MISCELLANEOUS
Restrictions on use of titles “futures broker”, “futures exchange”, &c.
Appeal
False or misleading statements
Preservation and disposal of records, &c.
Concealing, &c, books relating to futures contracts
Falsification of records
Precautions against falsification of records
Obstructing or hindering Commission, &c.
General penalty provisions
Penalty notices
Continuing offences
Offences by bodies corporate
Certain persons to assist in prosecutions
Reciprocity in relation to offences
Offences committed partly in and partly out of the Territory
Power of Court to prohibit payment or transfer of moneys, futures contracts or other property
Power of Commission to intervene in proceedings
Injunctions
Power of Court to punish for contempt of Court
Rules of court
Regulations
Futures Industry Act 1986
No. 72 of 1986
An Act relating to the futures industry in the Australian Capital Territory
[Assented to 24 June 1986]
BE IT ENACTED by the Queen, and the Senate and the House of Representatives of the Commonwealth of Australia, as follows:
PART I—PRELIMINARY
Short title
Commencement
Object
(2) The Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 applies to this Act.
Interpretation
4. (1) In this Act, unless the contrary intention appears—
“accounting records” includes invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes, vouchers and other documents of prime entry and also includes such working papers and other documents as are necessary to explain the methods and calculations by which accounts are made up;
“acquire”, in relation to a futures contract, means—
(a) except in the case of a futures option or of a prescribed exchange-traded option—enter into, or take an assignment of, the futures contract; or
(b) in the case of a futures option or of a prescribed exchange-traded option—take, or take an assignment of, the futures option or prescribed exchange-traded option,
whether or not on behalf of another person;
“adjustment agreement” means a standardised agreement the effect of which is that—
(a) a particular person will either be under an obligation to pay, or will have a right to receive, an amount of money;
(b) whether the person will be under an obligation to pay, or will have a right to receive, the amount of money will depend on a particular state of affairs existing at a particular future time, including, without limiting the generality of the foregoing, a state of affairs that relates to fluctuations in the value or price of a commodity or other property, or in an index or other factor; and
(c) the amount of money will be calculated in a particular manner by reference to that state of affairs,
whether or not the agreement has any other effect or is capable of being varied or discharged before that future time;
“amount” includes a nil amount;
“banker’s books” means—
(a) books of a banking corporation, including any documents used in the ordinary business of a banking corporation;
(b) cheques, orders for the payment of money, bills of exchange and promissory notes in the possession or under the control of a banking corporation; and
(c) documents that create or evidence futures contracts and are in the possession, or under the control, of a banking corporation;
“banking corporation” means—
(a) a bank as defined in section 5 of the Banking Act 1959; or
(b) a bank constituted under a law of a State or Territory;
“Board”, in relation to a body corporate, means the board of directors, committee of management, council or other governing body of the body corporate;
“books” includes any register or other record of information and any accounts or accounting records, however compiled, recorded or stored and also includes any document;
“bought position” means—
(a) in relation to a commodity agreement, or in relation to a futures contract, being a commodity agreement—the position of a person who, by virtue of the agreement, is under an obligation to accept delivery in accordance with the agreement; or
(b) in relation to a futures contract, being an adjustment agreement—the position of a person who, by virtue of the agreement—
(i) will, if the value or worth of the agreement (as determined in accordance with the agreement) as at a particular future time is less by a particular amount than the value or worth of the agreement (as so determined) as at a particular earlier time, be under an obligation to pay that amount; and
(ii) will, if the value or worth of the agreement (as so determined) as at a particular future time exceeds by a particular amount the value or worth of the agreement (as so determined) as at a particular earlier time, have a right to receive that amount;
“broker” means futures broker;
“business day” means a day that is not a Saturday, a Sunday or a public holiday or bank holiday in the Territory;
“business rules”, in relation to a body corporate, means—
(a) in the case of a body corporate that provides, or proposes to provide, clearing house facilities for a futures market—rules, regulations and by-laws governing—
(i) the activities and conduct of the body corporate and its members; and
(ii) the activities and conduct of other persons in relation to the provision by the body corporate of clearing house facilities for a futures market,
being rules, regulations and by-laws made by the body corporate or contained in its constituent documents;
(b) in the case of a body corporate that operates, or proposes to operate, as a futures association—rules, regulations and bylaws governing the activities and conduct of the body corporate and its members in relation to the operation of the body corporate as a futures association, being rules, regulations
and by-laws made by the body corporate or contained in its constituent documents; or
(c) in the case of a body corporate that maintains or provides, or proposes to maintain or provide, a futures market—rules, regulations and by-laws governing—
(i) the activities and conduct of the body corporate and its members;
(ii) the activities and conduct of each clearing house for the body corporate; and
(iii) the activities and conduct of other persons in relation to each futures market maintained or provided by the body corporate,
being rules, regulations and by-laws made by the body corporate or contained in its constituent documents;
“clearing house”, except in Division 1 of Part II, means—
(a) in relation to a body corporate—
(i) in any case—a person who provides, or proposes to provide, clearing house facilities for a futures market maintained or provided by that body corporate; or
(ii) in the case of a futures exchange—a body corporate in relation to which an approval as a clearing house for that futures exchange is in force under sub-section 48 (1); and
(b) in relation to a futures market—
(i) in any case—a person who provides, or proposes to provide, clearing house facilities for that futures market; or
(ii) in the case of a futures market of a futures exchange— a body corporate in relation to which an approval as a clearing house for that futures exchange is in force under sub-section 48 (1);
“clearing house facilities”, in relation to a futures market, means facilities for the registration of futures contracts made on that futures market;
“client”, in relation to a futures broker, means a person on behalf of whom the broker deals, or from whom the broker accepts instructions to deal, in futures contracts;
“close out”, in relation to a futures contract, means—
(a) discharge the obligations of the person in the bought position, or sold position, under the futures contract as a result of the matching up of the futures contract with a futures contract of the same kind under which the person has assumed an offsetting sold position, or offsetting bought position, as the case may be; or
(b) otherwise discharge the obligations of a party to the futures contract;
“commodity” means—
(a) any thing that is capable of delivery pursuant to an agreement for its delivery; or
(b) without limiting the generality of paragraph (a), an instrument creating or evidencing a thing in action;
“commodity agreement” means a standardised agreement the effect of which is that—
(a) a person is under an obligation to make delivery; or
(b) a person is under an obligation to accept delivery,
at a particular future time of a particular quantity of a p
This is an opening excerpt, not the complete document.