66Dealings as principal

##### 66 Dealings as principal (1) Subject to subsection (5), a dealer shall not, as principal, deal in any securities with a person who is not a dealer unless he first informs the person with whom he is dealing that he is acting in the transaction as principal and not as agent. (2) A reference in this section to a dealer dealing, or entering into a transaction, as principal includes a reference to a person: (a) dealing or entering into a transaction on behalf of a person associated with him; (b) dealing in securities on behalf of a body corporate in which he has a controlling interest; or (c) where he carries on business as a dealer in partnership—dealing in securities on behalf of a body corporate in which his interest and the interests of his partners together constitute a controlling interest. (3) A dealer who, as principal, enters into a transaction of sale or purchase of securities with a person who is not a dealer shall state in the contract note that he is acting in the transaction as principal and not as agent. (4) Subject to subsections (5) and (6), a dealer who, as principal (otherwise than by reason only that he is dealing or entering into a transaction on behalf of a person associated with him), enters into a transaction of sale or purchase of securities with a person who is not a dealer shall not charge that person brokerage, commission or any other fee in respect of the transaction. (5) Subsections (1) and (4) do not apply in relation to a transaction entered into by a dealer who is a member of a securities exchange and specializes in transactions relating to odd lots of securities, being a transaction of sale or purchase of an odd lot of securities. (6) Subsection (4) does not apply to a dealer who, as principal, enters into a transaction of sale or purchase of securities under an approved deed within the meaning of Division 6 of Part IV of the Companies Act 1981 with a person who is not a dealer and charges brokerage, commission or another fee in respect of the transaction in accordance with the provisions of the approved deed. (7) Where a dealer fails to comply with subsection (1), (3) or (4) in respect of a contract for the sale of securities by him, the purchaser of the securities may, if he has not disposed of them, rescind the contract by a notice of rescission in writing given to the dealer not later than 14 days after the receipt of the contract note and, where a dealer fails to comply with subsection (1), (3) or (4) in respect of a contract for the purchase of securities by him, the vendor of the securities may, in like manner, rescind the contract. (8) Nothing in subsection (7) affects any right that a person has apart from that subsection. Penalty: $2,500 or imprisonment for 6 months, or both.