Part XTrading in securities

An Act relating to the securities industry in the Australian Capital Territory ## Part I—Preliminary ##### 1 Short title \[see Note 1\] This Act may be cited as the Securities Industry Act 1980. ##### 2 Commencement \[see Note 1\] This Act shall come into operation on a date to be fixed by Proclamation. ##### 3 Object (1) The object of this Act is to regulate the securities industry in the Australian Capital Territory and this Act has effect, and shall be construed accordingly. (2) The Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980 applies to this Act. ## Part IA—Interpretation ##### 3A Effect of this Part The provisions of this Part have effect for the purposes of this Act, except so far as the contrary intention appears in this Act. ##### 4 Interpretation (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. > approved securities organisation means a body corporate that is approved by the Ministerial Council under section 38A. > arbitrage transaction means a purchase or sale of securities effected in the ordinary course of trading on a stock market together with an offsetting sale or purchase of those securities effected at the same time, or at as nearly the same time as practicable, in the ordinary course of trading on another stock market for the purpose of obtaining a profit from the difference between the prices of those securities in the 2 stock markets. > articles means articles of association. > 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. > 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) securities or documents of title to securities in the possession or under the control of a banking corporation whether by way of pledge or otherwise. > banking corporation means: (a) a bank as defined in section 5 of the Banking Act 1959; or (c) a bank constituted under a law of a State or Territory. > banning order means an order made under section 62G and in force under Division 5 of Part IV. > 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. > business rules, in relation to a body corporate, means: (a) in the case of a body corporate that maintains or provides, or proposes to maintain or provide, a stock market—the provisions of the constituent documents of the body corporate and any other rules, regulations or by‑laws made by the body corporate, other than rules, regulations or by‑laws that are listing rules of the body corporate; and (b) in any other case—the provisions of the constituent documents of the body corporate and any other rules, regulations or by‑laws made by the body corporate. > committee, in relation to a body corporate, means the committee of management, board of directors, council or other governing authority of the body corporate. > 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. > Corporation means a body corporate in relation to which a nomination as the National Securities Exchanges Guarantee Corporation is in force under subsection 122BA(1). > dealer means: (a) a person who carries on a securities business; or (b) 2 or more persons who together carry on a securities business. > dealers licence means a dealers licence granted under Part IV. > dealing, in relation to securities, means (whether as principal or agent) acquiring, disposing of, subscribing for or underwriting the securities, or making or offering to make, or inducing or attempting to induce a person to make or to offer to make, an agreement: (a) for or with respect to acquiring, disposing of, subscribing for or underwriting the securities; or (b) the purpose or purported purpose of which is to secure a profit or gain to a person who acquires, disposes of, subscribes for or underwrites the securities or to any of the parties to the agreement in relation to the securities. > director, in relation to a body corporate, includes: (a) any person occupying or acting in the position of director of the body corporate, by whatever name called and whether or not validly appointed to occupy or duly authorized to act in the position; (b) any person in accordance with whose directions or instructions the directors of the body corporate are accustomed to act; and (c) in the case of a body corporate incorporated or formed outside the Territory: (i) a member of the committee of management, council or other governing body of the body corporate; (ii) any person occupying or acting in the position of member of the committee of management, council or other governing body of the body corporate, by whatever name called and whether or not validly appointed to occupy or duly authorised to act in the position; and (iii) any person in accordance with whose instructions the members of the committee of management, council or other governing body of the body corporate are accustomed to act. > 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. > Exchange means Australian Stock Exchange Limited. > Exchange subsidiary means a securities exchange, or a recognised securities exchange, that is a subsidiary of the Exchange. > executive officer, in relation to a body corporate, means any person, by whatever name called and whether or not he is a director of the body corporate, who is concerned, or takes part, in the management of the body corporate. > exempt dealer has the meaning given by section 6C. > 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. > exempt stock market means a stock market in relation to which, or a stock market included in a class of stock markets, being a class in relation to which, a declaration under subsection 37(1A) is in force. > 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. > fidelity fund, in relation to a securities exchange, means the fidelity fund (if any) that section 100 requires or required the securities exchange to establish and keep. > function includes a duty. > Fund means the National Guarantee Fund established under subsection 122CA(1). > 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. > insolvent under administration means a person who: (a) under the Bankruptcy Act 1966 or the law of an external Territory, is a bankrupt in respect of a bankruptcy from which he has not been discharged; or (b) under the law of a country other than Australia or the law of an external Territory, has the status of an undischarged bankrupt; and includes: (c) a person who has executed a deed of arrangement under Part X of the Bankruptcy Act 1966 or the corresponding provisions of the law of an external Territory or of the law of a country other than Australia where the terms of the deed have not been fully complied with; and (d) a person whose creditors have accepted a composition under Part X of the Bankruptcy Act 1966 or the corresponding provisions of the law of an external Territory or of the law of a country other than Australia where a final payment has not been made under that composition. > invalid authority has the meaning given by subsection 6F(2). > investment advice business has the meaning given by section 6E. > investment adviser means a person who carries on, or 2 or more persons who together carry on, an investment advice business. > investment advisers licence means an investment advisers licence granted under Part IV. > investment contract means any contract, scheme or arrangement that, in substance and irrespective of the form of the contract, scheme or arrangement, involves the investment of money in or under such circumstances that the investor acquires or may acquire an interest in or right in respect of property, whether in the Territory or elsewhere, that, under, or in accordance with, the terms of investment will, or may at the option of the investor, be used or employed in common with any other interest in or right in respect of property, whether in the Territory or elsewhere, acquired in or under like circumstances. > licence means a dealers licence or an investment advisers licence. > 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. > listing rules, in relation to a body corporate that maintains or provides, or proposes to maintain or provide, a stock market, means rules, regulations or by‑laws governing or relating to: (a) the admission to, or removal from, the official list of the body corporate of bodies corporate, governments, unincorporate bodies or other persons for the purpose of the quotation on the stock market of the body corporate of securities of, or made available by, bodies corporate, governments, unincorporate bodies or other persons and for other purposes; or (b) the activities or conduct of bodies corporate, governments, unincorporate bodies and other persons who are admitted to that list; whether those rules, regulations or by‑laws: (c) are made by the body corporate or are contained in any of the constituent documents of the body corporate; or (d) are made by another person and adopted by the body corporate. > local Exchange subsidiary means a securities exchange that is an Exchange subsidiary. > lodge means lodge with the Commission. > marketable parcel, in relation to securities that are listed for quotation on the stock market of a securities exchange, means a marketable parcel of those securities within the meaning of the relevant business rules or listing rules of that securities exchange. > member, in relation to a securities exchange or a recognised securities exchange, means, except in the definition of member organisation and in Part IIA, a person who is, or who is a partner in, a member organisation of the securities exchange or recognised securities exchange. > member firm, in relation to a securities exchange or a recognised securities exchange, means a partnership that is a member organisation of the securities exchange or recognised securities exchange. > member organisation, in relation to a securities exchange or a recognised securities exchange, means: (a) a member of the securities exchange or recognised securities exchange who or that carries on a business of dealing in securities on his, her or its own account and not in partnership; or (b) a partnership that carries on a business of dealing in securities and is recognised by the securities exchange or recognised securities exchange as a member organisation or member firm. > memorandum means memorandum of association. > non‑dealer means a person who is neither a dealer nor one of 2 or more persons who together constitute a dealer. > officer, in relation to a body corporate, includes: (a) a director, secretary, executive officer or employee of the body corporate; (b) a receiver and manager of property of the body corporate appointed under a power contained in an instrument; (c) an official manager or deputy official manager of the body corporate; (d) a liquidator of the body corporate appointed in a voluntary winding up of the body corporate; and (e) a trustee or other person administering a compromise or arrangement made between the body corporate and another person or other persons; but does not include: (f) a receiver who is not also a manager; (g) a receiver and manager appointed by a court; or (h) a liquidator appointed by a court. > on, in relation to a stock market, includes at or by means of. > participation interest means any right to participate, or any interest: (a) in any profits, assets or realisation of any financial or business undertaking or scheme whether in the Territory or elsewhere; (b) in any common enterprise, whether in the Territory or elsewhere, in relation to which the holder of the right or interest is led to expect profits, rent or interest from the efforts of the promoter of the enterprise or a third party; or (c) in any investment contract; whether or not the right or interest is enforceable, whether the right or interest is actual, prospective or contingent, whether or not the right or interest is evidenced by a formal document and whether or not the right or interest relates to a physical asset, but does not include: (d) such a right that is a right to participate in a time‑sharing scheme; (e) any share in, or debenture of, a corporation; (f) any interest in, or arising out of, a policy of life insurance; or (g) an interest in a partnership agreement, unless the agreement or proposed agreement: (i) relates to an undertaking, scheme, enterprise or investment contract promoted by or on behalf of a person whose ordinary business is or includes the promotion of similar undertakings, schemes, enterprises or investment contracts, whether or not that person is, or is to become, a party to the agreement or proposed agreement; or (ii) is or would be an agreement, or is or would be within a class of agreements, prescribed by the regulations for the purposes of this paragraph. > prescribed interest means: (a) a participation interest; or (b) a right, whether enforceable or not, whether actual, prospective or contingent and whether or not evidenced by a formal document, to participate in a time‑sharing scheme; but does not include a right or interest, or a right or interest included in a class or kind of rights or interests, declared by the regulations to be an exempt right or interest, or a class or kind of exempt rights or interests. > proper authority has the meaning given by section 6F. > publish includes issue. > quarter day means 31 March, 30 June, 30 September or 31 December. > quotation, in relation to securities, in relation to a stock market of a securities exchange, includes the displaying or providing, on a stock market of the securities exchange, of information concerning: (a) in a case where offers to sell, purchase or exchange the securities at particular prices, or for particular consideration, are made or accepted on that stock market—those prices or that consideration; (b) in a case where offers or invitations are made on that stock market, being offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange the securities at particular prices or for particular consideration—those prices or that consideration; or (c) in any case—the price at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange the securities. > recognised banning order means a banning order within the meaning of a corresponding law of a participating State or participating Territory. > recognized dealer means, subject to section 6G, a person who is the holder of a dealers licence under the provisions of the law of a participating State or participating Territory that correspond with Part IV. > recognized investment adviser means, subject to section 6G, a person who is the holder of an investment advisers licence under the provisions of the law of a participating State or participating Territory that correspond with Part IV. > recognised licence means, subject to section 6G, a licence within the meaning of a corresponding law of a participating State or participating Territory. > 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. > recognised securities exchange means a body corporate that is a securities exchange for the purposes of a corresponding law of a participating State or participating Territory. > recognised stock exchange means a body corporate that is a stock exchange for the purposes of a corresponding law of a participating State or participating Territory. > registered company auditor has the same meaning as in the Companies Act 1981. > 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. > retirement village scheme means a scheme, undertaking or enterprise (in this definition referred to as the relevant scheme), whether in the Territory or elsewhere, that is being, or is proposed to be, carried out or undertaken with the intention that the participants, or a majority of the participants, in the relevant scheme be provided, in connection with the relevant scheme, with residential accommodation within a retirement community, whether or not the entitlement of a participant to be provided with such accommodation derives from a proprietary interest held by the participant in the premises where the accommodation is provided, but does not include a time‑sharing scheme. > securities means: (a) debentures, stocks or bonds issued or proposed to be issued by a government; (b) debentures, stocks, shares, bonds or notes issued or proposed to be issued by a body corporate or unincorporate; (c) an option contract to which this Act applies; or (d) a prescribed interest; but does not include: (e) bills of exchange; (ea) a futures contract within the meaning of the Futures Industry Act 1986 or of the provisions of a law of a participating State or participating Territory that correspond with that Act; (f) promissory notes; (g) certificates of deposit issued by a banking corporation; (h) in a case where: (i) there is attached to a share or debenture a right to participate in a retirement village scheme; and (ii) each of the other rights, and each interest (if any), attached to that share or debenture is a right or interest that is merely incidental to the right referred to in subparagraph (i); that share or debenture; or (j) a prescribed interest that is constituted by a right to participate in a retirement village scheme. > 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 exchange means a stock exchange or an approved securities organisation. > 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. > share means share in the share capital of a body corporate, and includes stock except where a distinction between stock and shares is expressed or implied. > sole trader means a person who is a member organisation of a securities exchange or of a recognised securities exchange. > stock exchange means: (a) the Exchange; or (b) a body corporate that is approved by the Ministerial Council under section 38. > stock market means a market, exchange or other place at which, or a facility by means of which: (a) offers to sell, purchase or exchange securities are regularly made or accepted; (b) offers or invitations are regularly made, being offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange securities; or (c) information is regularly provided concerning the prices at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange securities. > suspend has a meaning affected by subsections 62D(7) and (8). > time‑sharing scheme means a scheme, undertaking or enterprise, whether in the Territory or elsewhere: (a) participants in which are, or may become, entitled to use, occupy or possess, for 2 or more periods during the period for which the scheme, undertaking or enterprise is to operate, property to which the scheme, undertaking or enterprise relates; and (b) that is to operate for a period of not less than 3 years. > trading, in relation to securities, in relation to a stock market, includes: (a) making or accepting on that stock market offers to sell, purchase or exchange the securities; and (b) making on that stock market offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange the securities. > 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. > trust account means a trust account opened and maintained under section 73. > underwrite includes sub‑underwrite. > voting share, in relation to a body corporate, means an issued share in the body corporate that confers a right to vote, not being a right to vote that is exercisable only in one or more of the following circumstances: (a) during a period during which a dividend (or part of a dividend) in respect of the share is in arrears; (b) upon a proposal to reduce the share capital of the body corporate; (c) upon a proposal that affects rights attached to the share; (d) upon a proposal to wind up the body corporate; (e) upon a proposal for the disposal of the whole of the property, business and undertaking of the body corporate; (f) during the winding up of the body corporate. (1A) Where a person is, for the purposes of the Companies (Acquisition of Shares) Act 1980, taken to acquire shares in a company, the person shall, for the purposes of the definition of dealing in subsection (1), be taken to acquire those shares. (1B) For the purposes of this Act, a person shall not be regarded as a person in accordance with whose directions or instructions the directors of a body corporate are accustomed to act by reason only that the directors act on advice given by that person in the proper performance of the functions attaching to his professional capacity or to his business relationship with the directors or the body corporate. (2) A person who, but for this subsection, would be an exempt dealer by reason that he does not carry on a business of dealing in securities except in his capacity as a personal representative of a deceased dealer ceases to be an exempt dealer at the expiration of the period of 6 months after the date of the death of the dealer or upon his being discharged or removed as such a personal representative or upon the final distribution of the estate of the dealer, whichever first occurs. (5B) In determining for the purposes of this Act whether a market, exchange, place or facility is a stock market, regard shall not be had to the making at that market, exchange or other place, or by means of that facility, as the case may be, of futures contracts within the meaning of the Futures Industry Act 1986 or the provisions of a law of a participating State or participating Territory that correspond with that Act. (6) A reference in this Act to a securities exchange permitting trading in securities on the stock market of the securities exchange includes a reference to the securities exchange listing the securities for quotation, or otherwise permitting the securities to be quoted, on the stock market of the securities exchange. (7) For the purposes of this Act, the question whether bodies corporate are related to each other shall be determined in the same manner as the question whether corporations within the meaning of the Companies Act 1981 are related to each other would be determined under that Act. (7A) A regulation made for the purposes of subparagraph (g)(ii) of the definition of participation interest in subsection (1) does not apply to an agreement or a class of agreements relating to a partnership: (a) being a partnership for the carrying on of a profession or trade where a person carrying on that profession or trade is required by any law of the Commonwealth, of a State or of a Territory to be registered, licensed or otherwise authorised in order to do so; and (b) the business of which does not include any business other than the business of a partnership referred to in paragraph (a). (8) For the purposes of this Act: (a) a parcel of securities constitutes an odd lot if the number of securities in that parcel is less than one marketable parcel of those securities; and (b) if the number of securities in a parcel of securities is greater than one marketable parcel of those securities and, after excluding so many of the securities in that parcel as constitute a marketable parcel or marketable parcels of those securities, a number of securities remains, that remaining number of securities constitutes an odd lot. (8A) A reference in this Act to an option contract to which this Act applies is a reference to: (a) a contract under which a party to the contract acquires from another party to the contract an option or right, exercisable at or before a specified time, to purchase from, or to sell to, that other party a specified number of specified securities, or of securities included in a specified class of securities, at a price specified in, or to be determined in accordance with, the contract; or (b) a contract entered into on a stock market of a securities exchange or on an exempt stock market, being a contract under which a party to the contract acquires from another party to the contract an option or right, exercisable at or before a specified time: (i) to purchase from, or to sell to, that other party a specified amount of a specified foreign currency, or a specified quantity of a specified commodity, at a price specified in, or to be determined in accordance with, the contract; or (ii) to be paid by that other party an amount of money to be determined by reference to the amount by which a specified number is greater or less than the number of a specified index, being the Australian Stock Exchanges All Ordinaries Price Index or a prescribed index, as at the time when the option or right is exercised. (9) In this Act a reference to a body corporate, in relation to securities, includes a reference to a government, unincorporate body or other person that issues or makes available those securities. ##### 5 Relevant interests in securities (1) Subject to this section, a person has a relevant interest in securities if: (a) in the case of securities that carry a right to vote at a meeting of a body corporate or unincorporate, that person has power: (i) to exercise, or to control the exercise of, that right to vote; or (ii) to dispose of, or to exercise control over the disposal of, those securities; and (b) in the case of securities to which paragraph (a) does not apply—that person has power to dispose of, or to exercise control over the disposal of, those securities. (2) It is immaterial for the purposes of this section whether the power of a person: (a) to exercise, or to control the exercise of, a right to vote carried by securities; or (b) to dispose of, or to exercise control over the disposal of, securities; is express or implied or formal or informal, is exercisable alone or jointly with another person or other persons, cannot be related to a particular security, or is, or is capable of being made, subject to restraint or restriction, and any such power exercisable jointly with another person or other persons shall, for those purposes, be deemed to be exercisable by either or any of those persons. (3) A reference in this section to power or control includes a reference to power or control that is direct or indirect or is, or is capable of being, exercised as a result of, or by means of, or in breach of, or by revocation of, trusts, agreements, arrangements, understandings and practices or any of them, whether or not they are enforceable, and a reference in this section to a controlling interest includes a reference to such an interest as gives control. (4) Without limiting the generality of subsections (1), (2) and (3), where a body corporate has, or is by virtue of this section to be deemed to have, power: (a) to exercise, or to control the exercise of, a right to vote carried by securities; or (b) to dispose of, or to exercise control over the disposal of, securities; and: (c) the body corporate is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of a person in relation to the exercise of the power; or (d) a person has a controlling interest in the body corporate; that person shall, for the purposes of this section, be deemed to have the same power in relation to those securities as the body corporate has or is to be deemed to have. (5) Where a body corporate has, or is by virtue of this section (other than this subsection) to be deemed to have, power: (a) to exercise, or to control the exercise of, the right to vote carried by securities; or (b) to dispose of, or to exercise control over the disposal of, securities; a person (in this subsection referred to as the relevant person) shall, for the purposes of this section, be deemed to have the same power in relation to those securities as the body corporate has, or is to be deemed to have, if: (c) the relevant person has; (d) a person associated with the relevant person has; (e) persons associated with the relevant person together have; or (f) the relevant person and a person or persons associated with the relevant person together have; the power to exercise, or to control the exercise of, the voting power attached to not less than the prescribed percentage of the voting shares in the body corporate. (6) Where a person: (a) has entered into an agreement with respect to securities; (b) has a right relating to securities, whether the right is enforceable presently or in the future and whether on the fulfilment of a condition or not; or (c) has an option with respect to securities; and, on performance of the agreement, enforcement of the right or exercise of the option, that person would have a relevant interest in those securities, he shall, for the purposes of this section, be deemed to have that relevant interest in those securities. (7) For the purposes of this section, where a body corporate is to be deemed, by virtue of subsection (6), to have a relevant interest in securities and: (a) the body corporate is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of a person in relation to the exercise of, or the control of the exercise of, any right to vote attached to those securities, or in relation to the disposal of, or the exercise of control over the disposal of, those securities; (b) a person has a controlling interest in the body corporate; or (c) a person has power to exercise, or to control the exercise of, the voting power attached to not less than the prescribed percentage of the voting shares in the body corporate; that person shall be deemed to have a relevant interest in those securities. (8) A relevant interest in securities shall be disregarded if: (a) the ordinary business of the person who has the relevant interest includes the lending of money and he has authority to exercise his powers as the holder of the relevant interest only by reason of a security given for the purposes of a transaction entered into in the ordinary course of business in connection with the lending of money, not being a transaction entered into with a person associated with the first‑mentioned person; (b) the relevant interest is that of a person who has it by reason of his holding a prescribed office; (c) the securities are subject to a trust, the relevant interest is that of a trustee and: (i) a beneficiary is to be deemed, by virtue of subsection (6), to have a relevant interest in the securities by virtue of a presently enforceable and unconditional right referred to in paragraph (b) of that subsection; or (ii) the trustee is a bare trustee; (d) the ordinary business of the person who has the relevant interest includes dealing in securities and he has authority to exercise his powers as the holder of the relevant interest only by reason of instructions given to him by or on behalf of another person to dispose of those securities on behalf of the other person in the ordinary course of business; or (e) the relevant interest is that of a person who has it by reason only of his having been appointed as a proxy or representative to vote at a particular meeting of members, or of a class of members, of a body corporate or unincorporate, not being an appointment in return for the making of which the person or a person associated with the person provided valuable consideration. (9) For the purposes of subparagraph (8)(c)(ii), a trustee shall not be taken not to be a bare trustee by reason only of the fact that the trustee is entitled in his capacity as a trustee to be remunerated out of the income or property of the trust. (9A) A person may, by virtue of this section, be taken or deemed, for the purposes of this Act, to have a relevant interest in securities issued or made available by the person. (10) A relevant interest in securities shall not be disregarded by reason only of: (a) its remoteness; or (b) the manner in which it arose. (11) The regulations may provide that relevant interests or particular classes of relevant interests, or relevant interests held by particular persons or by particular classes of persons, in securities, or in particular classes of securities, shall, in such circumstances and subject to such conditions (if any) as are specified in the regulations, be disregarded for the purposes of the provisions of this Act or for the purposes of such of those provisions as are specified in the regulations. (12) A reference in this section to the prescribed percentage is a reference to 20% or, where a lesser percentage is prescribed by regulations in force for the time being for the purposes of section 11 of the Companies (Acquisition of Shares) Act 1980, a reference to that lesser percentage. ##### 6 Associated persons (1) A reference in this Act to a person associated with another person shall be construed as a reference to: (a) if the other person is a body corporate: (i) a director or secretary of the body corporate; (ii) a body corporate that is related to the other person; or (iii) a director or secretary of such a related body corporate; (b) where the matter to which the reference relates is the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a body corporate (including, in a case where the other person is a body corporate, the other person)—a person (including the body corporate) with whom the other person has, or proposes to enter into, an agreement, arrangement, understanding or undertaking, whether formal or informal and whether express or implied: (i) by reason of which the first‑mentioned person, or the other person, may exercise, may directly or indirectly control the exercise of, or may substantially influence the exercise of, any voting power attached to a share in the body corporate; (ii) with a view to controlling or influencing the composition of the board of directors, or the conduct of affairs, of the body corporate; (iii) under which the first‑mentioned person may acquire from the other person, or the other person may acquire from the first‑mentioned person, shares in the body corporate; or (iv) under which the first‑mentioned person, or the other person, may be required to dispose of shares in the body corporate in accordance with the directions of the other person, or of the first‑mentioned person, as the case may be; (c) a person in concert with whom the other person is acting, or proposes to act, in relation to the matter to which the reference relates; (d) where the matter to which the reference relates is a matter other than the extent of a power to exercise, or to control the exercise of, the voting power attached to voting shares in a body corporate: (i) a person who carries on a business of dealing in securities in partnership with the other person; (ii) subject to subsection (2), a person who is a partner of the other person otherwise than by reason that he carries on a business of dealing in securities in partnership with the other person; (iii) a trustee of a trust in relation to which the other person benefits or is capable of benefiting otherwise than by reason of transactions entered into in the ordinary course of business in connection with the lending of money; (iv) a person who is a director of a body corporate that carries on a business of dealing in securities and of which the other person is also a director; or (v) subject to subsection (2), a person who is a director of a body corporate of which the other person is a director, not being a body corporate that carries on a business of dealing in securities; (e) a person with whom the other person is, by virtue of the regulations, to be regarded as associated in respect of the matter to which the reference relates; (f) a person with whom the other person is, or proposes to become, associated, whether formally or informally, in any other way in respect of the matter to which the reference relates; or (g) if the other person has entered into, or proposes to enter into, a transaction, or has done, or proposes to do, any other act or thing, with a view to becoming associated with a person as mentioned in any of the preceding paragraphs—that last‑mentioned person. (2) Where, in proceedings under this Act, it is alleged that a person referred to in subparagraph (1)(d)(ii) or (v) was associated with another person at a particular time, that person shall be deemed not to have been so associated in relation to a matter to which the proceedings relate unless the person alleging the association proves that the first‑mentioned person at that time knew or ought reasonably to have known the material particulars of that matter. (3) For the purposes of this Act, where 2 or more persons constitute a dealer or an investment adviser, a person is associated with the dealer or with the investment adviser, as the case may be, if he is associated with either or any of those persons. (4) A person shall not be taken to be associated with another person by virtue of paragraph (1)(b), (c), (e) or (f) by reason only that one of those persons furnishes advice to, or acts on behalf of, the other person, in the proper performance of the functions attaching to his professional capacity or to his business relationship with the other person. ##### 6A Businesses of a particular kind 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. ##### 6B Carrying on a business: alone or together with others 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. ##### 6C Exempt dealers and exempt investment advisers (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. ##### 6D Inclusion in official list 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. ##### 6E Investment advice business (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; shall be disregarded. ##### 6F Proper authority; invalid authority (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. (4) In this section: > licence includes a recognised licence. > licensee includes a recognised licensee. ##### 6G Recognised licensee must be connected with State or Territory concerned 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. ##### 6H Representatives (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. ##### 6J Securities business (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. ## Part II—Administration ### Division 1—General ##### 7 Interpretation In this Division, books includes banker’s books. ##### 8 Power of Commission to require production of books (1A) The powers of the Commission under subsection (1), or the powers of an authorized person under subsection (2), to make a requirement of a corporation or person shall not be exercised except: (a) for the purpose of: (i) the performance of a function, or the exercise of a power, by the Commission under a relevant Act (other than the exercise of a power of the Commission under subsection 6(3) of the National Companies and Securities Commission Act 1979); or (ii) ensuring compliance with the provisions of a relevant Act; or (b) where the requirement relates to a matter that constitutes or may constitute: (i) a contravention of, or failure to comply with, a provision of such a relevant Act; or (ii) an offence relating to securities that involves fraud or dishonesty. (1B) A reference in subsection (1A) to a relevant Act includes a reference to the provisions of a law of a participating State or participating Territory that correspond with a relevant Act. (1) The Commission may, at any time, by notice in writing: (a) give a direction to: (i) a securities exchange; (ii) a member of the committee of a securities exchange; (iii) a person who is or has been (either alone or together with another person or other persons) a dealer or an investment adviser or is or has been a dealer’s representative or an investment representative; (iv) a nominee controlled by a person referred to in subparagraph (iii) or jointly controlled by 2 or more persons at least one of whom is a person referred to in that subparagraph; (v) a person who is or has been an officer or employee of, or an agent, banker, solicitor, auditor or other person acting in any capacity for or on behalf of, a securities exchange or a person referred to in subparagraph (ii), (iii) or (iv); or (va) any other person who, in the opinion of the Commission, has been a party to any dealing in securities; requiring the production, to a person authorized by the Commission to receive them, at such time and place as are specified in the direction, of such books as are so specified, being books relating to: (vi) the business or affairs of a securities exchange; (vii) any dealing in securities; (viii) any advice concerning securities or the issuing or publication of a report or analysis concerning securities; (ix) the character or financial position of, or any business carried on by, a person referred to in subparagraph (iii) or (iv); or (x) an audit of, or any report of an auditor concerning, a dealing in securities or any accounts or records of a dealer or of an investment adviser; or (b) give a direction to any person requiring the production, to a person authorized by the Commission to receive them, at such time and place as are specified in the direction, of any books relating to matters mentioned in subparagraph (a)(vi), (vii), (viii), (ix) or (x) that are in the custody or under the control of the person. (2) The Commission may from time to time authorize a person, on producing (if required to do so) such evidence of his authority as is prescribed: (a) to require by notice in writing a securities exchange or a person referred to in subparagraph (1)(a)(ii), (iii), (iv), (v) or (va) to produce to the authorized person forthwith or, if a time and place at which the books are to be produced are specified in the notice, at that time and place, such books relating to matters mentioned in subparagraph (1)(a)(vi), (vii), (viii), (ix) or (x) as are specified by the authorized person and are in the custody or under the control of the securities exchange or person of whom the requirement is made; or (b) to require by notice in writing a securities exchange or any other person to produce to the authorized person forthwith or, if a time and place at which the books are to be produced are specified in the notice, at that time and place, any books relating to matters mentioned in subparagraphs (1)(a)(vi), (vii), (viii), (ix) and (x) that are in the custody or under the control of the securities exchange or other person. (3) A reference in subsection (1) to a dealing in securities or to a business carried on by a person includes a reference to a dealing in securities by a person as a trustee or to a business carried on by a person as a trustee, as the case may be. (4) An authorization under subsection (2) may be of general application or may be limited to making requirements of a particular securities exchange or other person or particular securities exchanges or other persons. (5) Where the Commission, or a person authorized by the Commission, requires the production of any books under this section and a person has a lien on the books, the production of the books does not prejudice the lien. (6) Where the Commission, or a person authorized by the Commission, exercises a power under this section to require another person to produce books: (a) if the books are produced, the person to whom the books are produced: (i) may take possession of the books and make copies of, or take extracts from, the books; (ii) may require the other person, or any person who was party to the compilation of the books, to make a statement providing any explanation that the person concerned is able to provide as to any matter relating to the compilation of the books or as to any matter to which the books relate; (iii) may retain possession of the books for such period as is necessary to enable the books to be inspected, and copies of, or extracts from, the books to be made or taken, by or on behalf of the Commission; and (iv) during that period shall permit a person who would be entitled to inspect any one or more of the books if they were not in the possession of the person to whom the books were produced to inspect at all reasonable times such of the books as that person would be so entitled to inspect; or (b) if the books are not produced, the Commission or the authorized person may require the other person: (i) to state, to the best of his knowledge and belief, where the books may be found; and (ii) to identify the person who, to the best of his knowledge and belief, last had custody of the books and to state, to the best of his knowledge and belief, where that last‑mentioned person may be found. (6A) A person shall not be subject to any liability by reason that the person complies with a direction given or purporting to have been given under subsection (1), or a requirement made or purporting to have been made under subsection (2). (7) A power conferred by this section to make a requirement of a person extends, if the person is a body corporate, including a body corporate that is in the course of being wound up, or was a body corporate, being a body corporate that has been dissolved, to making that requirement of any person who is or has been an officer of the body corporate. (8) For the purposes of subsection (7), officer, in relation to a body corporate, includes: (a) a director, secretary, executive officer or employee of the body corporate; (b) a receiver, or a receiver and manager, of property of the body corporate; (c) an official manager or a deputy official manager of the body corporate; (d) a liquidator or provisional liquidator of the body corporate; and (e) a trustee or other person administering a compromise or arrangement made between the body corporate and another person or other persons. ##### 9 Power of Magistrate to issue a warrant to seize books (1) If a magistrate is satisfied, on information on oath or affirmation laid by an employee of the Commission, or by another person authorized in writing by the Commission, that there are reasonable grounds for suspecting that there are on particular premises in the Territory any books the production of which has been required by virtue of section 8 or by virtue of a provision of a law of a participating State or of a participating Territory that corresponds with section 8 and which have not been produced in compliance with that requirement, the magistrate may issue a warrant authorizing any member of the Australian Federal Police, together with any other person named in the warrant: (a) to enter those premises (using such force as is necessary for the purpose); (b) to search the premises and to break open and search any cupboard, drawer, chest, trunk, box, package or other receptacle, whether a fixture or not, in the premises; (c) to take possession of, or secure against interference, any books that appear to be books the production of which was so required; and (d) to deliver any books possession of which is so taken into the possession of a person authorized by the Commission to receive them. (2) The information laid for the purposes of subsection (1) shall state that the person laying the information suspects that there are on particular premises in the Territory books the production of which has been required under section 8 or under a provision of a law of a participating State or of a participating Territory that corresponds with section 8 and which have not been produced in compliance with that requirement and shall specify the grounds on which the person so suspects. (2A) Where a magistrate issues a warrant under subsection (1), he shall state on the information laid under that subsection: (a) which of the grounds set out in the information as required by subsection (2) he has relied on to justify the issue of the warrant; and (b) particulars of any other grounds relied on by him to justify the issue of the warrant. (2B) There shall be stated in a warrant issued under this section: (a) whether entry is authorized to be made at any time of the day or night or during specified hours of the day or night; and (b) a date, being a date not later than 7 days after the date of issue of the warrant, upon which the warrant ceases to have effect. (3) Where, under this section, a person takes possession of, or secures against interference, any books, and a person has a lien on the books, the taking of possession of the books or the securing of the books against interference does not prejudice the lien. (4) Where, under this section, a person takes possession of, or secures against interference, any books, that person or any person to whose possession the books were delivered under paragraph (1)(d): (a) may make copies of, or take extracts from, the books; (b) may require any person who was a party to the compilation of the books to make a statement providing any explanation that that person is able to provide as to any matter relating to the compilation of the books or as to any matter to which the books relate; (c) may retain possession of the books for such period as is necessary to enable the books to be inspected, and copies of, or extracts from, the books to be made or taken, by or on behalf of the Commission; and (d) during that period shall permit a person who would be entitled to inspect any one or more of the books if they were not in the possession of the first‑mentioned person to inspect at all reasonable times such of the books as that person would be so entitled to inspect. (5) The powers conferred by this section are in addition to, and not in derogation of, any other powers conferred by law. (6) In this section, premises includes any structure, building, aircraft, vehicle, vessel or place (whether built upon or not) and any part of such a structure, building, aircraft, vehicle, vessel or place. ##### 10 Offences (1) A person shall not, without reasonable excuse, refuse or fail to comply with a requirement made under section 8 or 9. Penalty: $10,000 or imprisonment for 2 years, or both. (2) A person shall not, in purported compliance with a requirement made under section 8 or 9, furnish information or make a statement that is false or misleading in a material particular. Penalty: $10,000 or imprisonment for 2 years, or both. (2A) It is a defence to a prosecution for an offence against subsection (2) if the defendant proves that he believed on reasonable grounds that the information or statement was true and was not misleading. (3) A person shall not, without reasonable excuse, obstruct or hinder: (a) the Commission or another person in the exercise of any power under section 8; or (b) a person executing a warrant issued under section 9. Penalty: $10,000 or imprisonment for 2 years, or both. (4) The occupier or person in charge of any premises that a person enters pursuant to a warrant referred to in subsection 9(1) shall provide the last‑mentioned person with all reasonable facilities and assistance for the effective exercise of his powers under the warrant. Penalty: $2,500 or imprisonment for 6 months, or both. (5) A person is not excused from making a statement providing an explanation as to any matter relating to the compilation of any books or as to any matter to which any books relate pursuant to a requirement made of him in accordance with section 8 or 9 on the ground that the statement might tend to incriminate him but, where the person claims before making a statement that the statement might tend to incriminate him, the statement is not admissible in evidence against him in criminal proceedings other than proceedings under this section. (6) Subject to subsection (5), a statement made by a person in compliance with a requirement made under section 8 or 9 may be used in evidence in any criminal or civil proceedings against the person. ##### 10A Copies or extracts of books to be admitted in evidence (1) Subject to this section, in any legal proceedings (whether proceedings under this Act or otherwise), a copy of or extract from a book relating to a matter mentioned in subparagraph 8(1)(a)(vi), (vii), (viii), (ix) or (x) is admissible in evidence as if it were the original book or the relevant part of the original book. (2) A copy of or extract from a book is not admissible in evidence under subsection (1) unless it is proved that the copy or extract is a true copy of the book or of the relevant part of the book. (3) For the purposes of subsection (2), evidence that a copy of or extract from a book is a true copy of the book or of a part of the book may be given by a person who has compared the copy or extract with the book or the relevant part of the book and may be given either orally or by an affidavit sworn, or by a declaration made, before a person authorized to take affidavits or statutory declarations. ##### 11 Privilege (1) Where: (a) the Commission, or a person authorized by the Commission, makes a requirement under section 8 or 9 of a duly qualified legal practitioner in respect of a book; and (b) the book contains a privileged communication made by or on behalf of or to the legal practitioner in his capacity as a legal practitioner; the legal practitioner is entitled to refuse to comply with the requirement unless the person to whom or by or on behalf of whom the communication was made or, if the person is a body corporate that is under official management or is in the course of being wound up, the official manager or the liquidator, as the case may be, agrees to the legal practitioner complying with the requirement but, where the legal practitioner so refuses to comply with a requirement, he shall forthwith furnish, in writing, to the Commission or authorized person: (c) if he knows the name and address of the person to whom or by or on behalf of whom the communication was made—that name and address; and (d) sufficient particulars to identify the book, or the part of the book, containing the communication. (2) Where: (a) under section 8 or 9, the Commission, or a person authorized by the Commission, requires a duly qualified legal practitioner to make a statement providing an explanation as to any matter relating to the compilation of books or as to any matter to which books relate; and (b) the legal practitioner is not able to make that statement without disclosing a privileged communication made by or on behalf of or to the legal practitioner in his capacity as a legal practitioner; the legal practitioner is entitled to refuse to comply with the requirement, except to the extent that he is able to comply with the requirement without disclosing any privileged communication referred to in paragraph (b), unless the person to whom or by or on behalf of whom the communication was made or, if the person is a body corporate that is under official management or is in the course of being wound up, the official manager or the liquidator, as the case may be, agrees to the legal practitioner complying with the requirement but, where the legal practitioner so refuses to comply with a requirement, he shall forthwith furnish, in writing, to the Commission or authorized person: (c) if he knows the name and address of the person to whom or by or on behalf of whom the communication was made—that name and address; and (d) if the communication was made in writing—sufficient particulars to identify the document containing the communication. Penalty: $1,000 or imprisonment for 3 months, or both. ##### 12 Disclosure to Commission (1) The Commission may require a dealer to disclose to the Commission, in relation to any acquisition or disposal of securities, the name of the person from or through whom or on whose behalf the securities were acquired or to or through whom or on whose behalf the securities were disposed of and the nature of the instructions given to the dealer in respect of the acquisition or disposal. (2) The Commission may require a person who has acquired or disposed of securities to disclose to the Commission whether he acquired or disposed of those securities, as the case may be, as trustee for, or for or on behalf of, another person and, if he acquired or disposed of those securities as trustee for, or for or on behalf of, another person, to disclose the name of that other person and the nature of any instructions given to the first‑mentioned person in respect of the acquisition or disposal. (3) The Commission may require a securities exchange to disclose to the Commission, in relation to an acquisition or disposal of securities on the stock market of that securities exchange, the names of the members of that securities exchange who acted in the acquisition or disposal. (3A) Where the Commission considers: (a) that it may be necessary to prohibit trading in securities of, or made available by, a body corporate; (b) that a person may have contravened section 123, 124, 125, 126, 127, 128 or 132 in relation to securities of, or made available by, a body corporate; (c) that a person may have contravened a provision of Division 4 of Part IV of the Companies Act 1981 in relation to shares in a body corporate; (d) that an acquisition of shares in a body corporate may have occurred in circumstances of a kind referred to in subsection 60(1) of the Companies (Acquisition of Shares) Act 1980; or (e) that a person may have engaged in conduct that has had a result of a kind referred to in subsection 60(3) of the Companies (Acquisition of Shares) Act 1980; the Commission: (f) may require: (i) in a case to which paragraph (a), (b), (c) or (d) applies—a director, secretary or executive officer of the body corporate referred to in that paragraph; or (ii) in a case to which paragraph (e) applies—a director, secretary or executive officer of a body corporate in relation to shares in which, or affairs of which, that conduct was engaged in; to disclose to the Commission any information of which he is aware, being information that might have affected any dealing that has taken place, or that might affect any dealing that may take place, in securities of, or made available by, the body corporate of which he is the director, secretary or executive officer, as the case may be; and (g) may require a person whom the Commission believes on reasonable grounds to be capable of giving information concerning: (i) any dealing in relevant securities; (ii) any advice given by a dealer, an investment adviser, a dealer’s representative or an investment representative concerning relevant securities; (iii) the issuing or publication of a report or analysis by a dealer, an investment adviser, a dealer’s representative or an investment representative concerning relevant securities; (iv) the financial position of any business carried on by a person who is or has been (either alone or together with another person or other persons) a dealer or an investment adviser and has dealt in, or given advice concerning, as the case may be, relevant securities; (v) the financial position of any business carried on by a nominee controlled by a person referred to in subparagraph (iii) or jointly controlled by 2 or more persons at least one of whom is a person referred to in that subparagraph; or (vi) an audit of, or any report of an auditor concerning, any accounts or records of a dealer or of an investment adviser, being accounts or records relating to dealings in relevant securities; to disclose to the Commission the information that the person has in relation to the matters concerning which the Commission believes that the person is capable of giving information. (3B) For the purposes of paragraph (3A)(g), relevant securities means: (a) in a case to which paragraph (3A)(a), (b), (c) or (d) applies—securities of, or made available by, the body corporate referred to in that paragraph; and (b) in a case to which paragraph (3A)(e) applies—securities of, or made available by, the body corporate in relation to shares in which, or affairs of which, the conduct referred to in that paragraph was engaged in. (3C) A person is not excused from disclosing information to the Commission pursuant to a requirement made of him under subsection (3A) on the ground that the disclosure of the information might tend to incriminate him. (3CA) Where a person claims, before making an oral statement disclosing information that he is required to disclose by a requirement made of him under subsection (3A), that the statement might tend to incriminate him, evidence of that statement is not admissible in evidence against him in criminal proceedings other than proceedings under this section. (3D) Where, pursuant to paragraph (3A)(f) or (g), the Commission requires a person to disclose information to the Commission, the Commission shall give, or cause to be given, to the person, at the time when the requirement is made, a notice in the prescribed form. (4) A person shall not, without reasonable excuse, fail to comply with a requirement of the Commission under subsection (1), (2), (3) or (3A). Penalty: $5,000 or imprisonment for 1 year, or both. (5) A person shall not, in purported compliance with a requirement of the Commission under subsection (1), (2), (3) or (3A), disclose information, or make a statement, that is false or misleading in a material particular. Penalty: $10,000 or imprisonment for 2 years. (6) It is a defence to a prosecution for an offence against subsection (5) if the defendant proves that he believed on reasonable grounds that the information or statement was true and was not misleading. (7) In this section: (a) a reference to disclosing information includes, in relation to information that is contained in a document, a reference to furnishing the document; and (b) a reference to an acquisition of securities includes, where a person is, for the purposes of the Companies (Acquisition of Shares) Act 1980, taken to acquire shares in a company, a reference to the acquisition of the shares. (8) A person shall not be subject to any liability by reason that the person complies with a requirement made or purporting to have been made under this section. ##### 13 Investigation of certain matters Where the Commission has reason to suspect that: (a) an offence under a provision of a relevant Act or against any other law with respect to dealing in securities; or (b) an offence relating to securities that involves fraud or dishonesty; may have been committed, the Commission may make such investigation as the Commission thinks expedient for the due administration of a relevant Act. ##### 14 Power of Court to make certain orders (1) Where: (a) on the application of the Commission, it appears to the Court that a person has contravened this Act, or any other law in force in the Territory relating to trading or dealing in securities, or has contravened the conditions or restrictions of a licence or the business rules or listing rules of a securities exchange or is about to do an act with respect to trading or dealing in securities that, if done, would be such a contravention; or (b) on the application of a securities exchange, it appears to the Court that a person has contravened the business rules or listing rules of the securities exchange; the Court may make such order or orders as it thinks fit, including, but without limiting the generality of the foregoing, one or more of the following orders, namely: (c) in the case of persistent or continuing breaches of this Act, or of any other law in force in the Territory relating to trading or dealing in securities, of the conditions or restrictions of a licence, or of the business rules or listing rules of a securities exchange—an order restraining a person from carrying on a business of dealing in securities, acting as an investment adviser or as a dealer’s representative or investment representative, or from holding himself out as so carrying on business or so acting; (d) an order restraining a person from acquiring, disposing of or otherwise dealing with any securities that are specified in the order; (e) an order appointing a receiver of the property of a dealer or of property that is held by a dealer for or on behalf of another person, whether on trust or otherwise; (f) an order declaring a contract relating to securities to be void or voidable; (g) for the purpose of securing compliance with any other order under this section, an order directing a person to do or refrain from doing a specified act; (h) any ancillary order deemed to be desirable in consequence of the making of an order under any of the preceding provisions of this subsection. (1A) Where an application is made to the Court for an order under subsection (1), the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application. (1B) Where the Commission makes an application to the Court for the making of an order under subsection (1), the Court shall not require the Commission or any other person, as a condition of granting an interim order under subsection (1A), to give any undertakings as to damages. (2) The Court shall not make an order under subsection (1) if it is satisfied that the order would unfairly prejudice any person. (3) The Court may, before making an order under subsection (1), direct that notice of the application be given to such persons as it thinks fit or direct that notice of the application be published in such manner as it thinks fit, or both. (4) A person appointed by order of the Court under subsection (1) as a receiver of the property of a dealer: (a) may require the dealer to deliver to the receiver any property of which he has been appointed receiver or to give to the receiver all information concerning that property that may reasonably be required; (b) may acquire and take possession of any property of which he has been appointed receiver; (c) may deal with any property that he has acquired or of which he has taken possession in any manner in which the dealer might lawfully have dealt with the property; and (d) has such other powers in respect of the property as the Court specifies in the order. (5) In paragraph (1)(e) and subsection (4), property, in relation to a dealer, includes money, securities and documents of title to securities or other property entrusted to or received on behalf of any other person by the dealer or another person in the course of or in connection with a business of dealing in securities carried on by the dealer. (6) A person shall not, without reasonable excuse, contravene or fail to comply with: (a) an order under this section that is applicable to him; or (b) a requirement of a receiver appointed by order of the Court under subsection (1). Penalty: $10,000 or imprisonment for 2 years, or both. (8) The Court may rescind, vary or discharge an order made by it under this section or suspend the operation of such an order. ### Division 2—Investigations ##### 15 Interpretation (1) In this Division, unless the contrary intention appears: > direction means a direction given to the Commission in the exercise of a power under subsection 16(1), (2) or (3) in relation to the carrying out of an investigation into matters relating to dealing in securities. > inspector means an inspector appointed under this Division. > prescribed direction means a direction given in the exercise of a power under subsection 16(1) or (2) otherwise than in response to a request made by the Commission under subsection 16(4), not being a direction that has been approved by the Ministerial Council under subsection 16(6). > prescribed person means a person suspected or believed by an inspector, on reasonable grounds, to be capable of giving information concerning any matter being, or to be, investigated by the inspector pursuant to this Division. > relevant authority, in relation to a direction or in relation to an investigation that is carried out, or is to be carried out, pursuant to a direction, means: (a) in the case of a direction given by the Minister other than a direction that has been approved by the Ministerial Council under subsection 16(6)—the Minister; or (b) in the case of a direction given by the Ministerial Council or approved by the Ministerial Council under subsection 16(6)—the Ministerial Council. (1A) In this Division, a reference to a statement made at an examination includes a reference to a question asked, an answer given, or any other comment or remark made, at the examination. (2) Where 2 or more inspectors have been appointed under this Division to investigate particular matters relating to dealing in securities, each of those inspectors may exercise his powers or perform his functions under this Division independently of the other inspector or inspectors. (3) In relation to an investigation carried out by the Commission into matters relating to dealing in securities: (a) a reference in section 19, 21, 32 or 35 to an inspector shall be read as a reference to a member of the Commission or to an authorized agent of the Commission; and (b) the reference in section 34 to an inspector shall be read as a reference to the Commission. (4) The reference in subsection (3) to an authorized agent of the Commission shall be read as a reference to: (a) an employee of the Commission; (b) a person whose services are available to the Commission by virtue of arrangements made under subsection 24(1) or (2) of the National Companies and Securities Commission Act 1979; or (c) a person engaged under subsection 25(1) of that Act, who is authorized by the Commission to act on behalf of the Commission in connection with the investigation concerned. (5) In relation to an investigation carried out pursuant to a prescribed direction into matters relating to dealing in securities, a reference in section 21, 30 (other than subsection (4)) or 35 to the Commission shall be read as a reference to the relevant authority. ##### 16 Investigations (1) Where it appears to the Minister that it is in the public interest in respect of the Territory that an investigation be carried out into any matters relating to dealing in securities, the Minister may, by instrument in writing, direct the Commission to arrange for an investigation into those matters. (2) Where it appears to the Minister that it is in the national interest that an investigation be carried out into any matters relating to dealing in securities, the Minister may, by instrument in writing, direct the Commission to arrange for an investigation into those matters. (3) The Ministerial Council may, by instrument in writing, direct the Commission to arrange for an investigation into any matters relating to dealing in securities. (4) The Commission may request the Minister in writing to exercise his powers under subsection (1) or (2) to direct the Commission to arrange for an investigation into any matters relating to dealing in securities. (5) The Commission may request the Ministerial Council in writing to exercise its powers under subsection (3) to direct the Commission to arrange for an investigation into any matters relating to dealing in securities. (6) Where a direction is given by the Minister under subsection (1) or (2), the Ministerial Council may approve the direction. ##### 17 Conduct of investigations (1) An instrument containing a prescribed direction: (a) shall specify the matters that are to be investigated; (b) may require the investigation to be carried out by the Commission or require it to be carried out by an inspector to be appointed by the Commission; and (c) in the case of an investigation that is to be carried out by an inspector appointed by the Commission—may require a specified person to be appointed as the inspector and may require him to be appointed on specified terms and conditions. (2) An instrument containing a direction other than a prescribed direction: (a) shall specify the matters that are to be investigated; and (b) may be accompanied by a statement in writing setting out the views of the relevant authority as to: (i) whether the investigation should be carried out by the Commission or by an inspector appointed by the Commission; and (ii) if the Commission decides to appoint an inspector to carry out the investigation—the person who should be appointed and the terms and conditions of his appointment. (3) Where the Commission receives a direction, the Commission shall: (a) in the case of a prescribed direction—comply with any requirements specified in the direction; and (b) in the case of any other direction: (i) take into account any views expressed by the relevant authority in a statement accompanying the direction; (ii) if the Commission decides to arrange for the investigation to which the direction relates to be carried out contrary to the wishes of the relevant authority—notify the relevant authority accordingly; and (iii) if, after the Commission so notifies the relevant authority, the Ministerial Council gives any instructions to the Commission in relation to the investigation—comply with those instructions. (4) Where the Commission receives a direction, the Commission shall: (a) arrange for an investigation to be carried out into the matters specified in the instrument containing the direction; and (b) subject to subsection (3): (i) decide whether the investigation is to be carried out by the Commission or by an inspector to be appointed by the Commission; and (ii) if it decides that the investigation should be carried out by an inspector—appoint the inspector on such terms and conditions as the Commission determines. (5) Where, pursuant to a direction, an investigation is being carried out by the Commission or by an inspector appointed by the Commission, the Commission shall, if, and only if, it is so directed by the relevant authority: (a) arrange for the investigation to be extended to additional matters; (b) terminate the investigation, or terminate the investigation in so far as it relates to particular matters; or (c) in the case of an investigation that is being carried out by an inspector—terminate, or vary the terms and conditions of, the appointment of the inspector; before the completion of the investigation. (6) Where the Commission is directed under subsection 16(1), (2) or (3) to arrange for an investigation into matters relating to securities, the Commission shall cause to be published in the Gazette a notice stating that the direction has been given and specifying the matters concerned. (7) A notice referred to in subsection (6) shall: (a) if the investigation is being or is to be carried out by the Commission—state that fact; or (b) if the investigation is being or is to be carried out by an inspector—state that fact and specify the name of the inspector. (8) Where the Commission ceases to carry out an investigation or the appointment of an inspector to carry out an investigation is terminated, the Commission shall cause notice of the cessation or termination to be published in the Gazette. (9) A certificate by the Commission stating that: (a) an investigation into a matter specified in the certificate, being a matter relating to dealing in securities, is being or is to be carried out by the Commission; or (b) an investigation into a matter specified in the certificate, being a matter relating to dealing in securities, is being or is to be carried out by an inspector named in the certificate; is prima facie evidence of the matters stated in the certificate and, in the case of an investigation by an inspector, that the inspector has been duly appointed. ##### 18 Powers of Commission and inspectors appointed under corresponding laws (1) Where, pursuant to a direction given to the Commission under the provisions of a law of a participating State or of a participating Territory that correspond with this Division, the Commission is carrying out an investigation into any matters, the Commission may exercise, in relation to those matters, the powers that it would have if it were carrying out an investigation into those matters under this Division. (2) Where, pursuant to a direction given to the Commission under the provisions of a law of a participating State or of a participating Territory that correspond with this Division, a person has been appointed as an inspector to carry out an investigation into any matters, that person may exercise, in relation to those matters, the powers of an inspector under this Division that he would have if he had been appointed as an inspector under this Division to investigate those matters. ##### 19 Powers of inspectors (1) An inspector may, by notice containing the prescribed matters given in the prescribed manner, require a prescribed person: (a) to produce to the inspector such books relating to a matter to which his investigation relates as are in the custody or under the control of that person; (b) to give to the inspector all reasonable assistance in connection with the investigation; and (c) to appear before the inspector for examination on oath or affirmation and to answer questions put to him; and may administer an oath or affirmation to that person. (1A) A notice given pursuant to paragraph (1)(c) shall set out the provisions of subsections (8) and (9). (2) An examination under this section shall, for the purposes of Part III of the Crimes Act 1914, be deemed to be a judicial proceeding. (3) Where books are produced to an inspector under this section, the inspector may take possession of the books for such period as he considers necessary for the purposes of his investigation, and during that period he shall permit a person who would be entitled to inspect any of those books if they were not in the possession of the inspector to inspect at all reasonable times such of those books as that person would be so entitled to inspect. (4) A prescribed person shall not, without reasonable excuse, refuse or fail to comply with a requirement made under subsection (1). Penalty: $10,000 or imprisonment for 2 years, or both. (5) A prescribed person shall not, in purported compliance with a requirement made under subsection (1), furnish information that is false or misleading in a material particular. Penalty: $10,000 or imprisonment for 2 years, or both. (6) A prescribed person shall not, when appearing before an inspector for examination pursuant to a requirement made under subsection (1), make a statement that is false or misleading in a material particular. Penalty: $10,000 or imprisonment for 2 years, or both. (7) A prescribed person shall not, when appearing before an inspector for examination pursuant to a requirement made under subsection (1), refuse or fail to take an oath or make an affirmation. Penalty: $1,000 or imprisonment for 3 months, or both. (8) A duly qualified legal practitioner acting for a prescribed person: (a) may attend an examination of that person; and (b) may, at such times during the examination as the inspector determines: (i) address the inspector; and (ii) examine that person; in relation to matters in respect of which the inspector has questioned that person. (9) A prescribed person is not excused from answering a question put to him by an inspector on the ground that the answer might tend to incriminate him but, where that person claims, before answering the question, that the answer might tend to incriminate him, the answer is not admissible in evidence against him in criminal proceedings other than proceedings under this section or other proceedings in respect of the falsity of the answer. (10) A person who complies with a requirement of an inspector under subsection (1) does not incur a liability to any person by reason only of that compliance. (11) A person who is required to attend for examination under this section is entitled to such allowances and expenses as are prescribed. (12) The Commission may, in its discretion, pay, on account of the costs and expenses incurred by a person in complying with a requirement under subsection (1), such amount as it thinks reasonable. (12A) Where, in the opinion of an inspector, a legal practitioner acting for a prescribed person is attempting to obstruct the examination of the prescribed person by the exercise of the rights conferred on him under subsection (8) to address the inspector or to examine the prescribed person, the inspector may require the legal practitioner to cease to address him or to cease to examine the prescribed person, as the case may be. (12B) Where an inspector makes a requirement of a legal practitioner under subsection (12A), the legal practitioner shall not refuse or fail to comply with that requirement. (13) Where an inspector is satisfied that a prescribed person has failed, without reasonable excuse, to comply with a requirement of the inspector, the inspector may, by writing signed by him, certify the failure to the Court. (14) Where an inspector gives a certificate under subsection (13), the Court may inquire into the case and: (a) order the prescribed person to comply with the requirement of the inspector within such period as is fixed by the Court; or (b) if the Court is satisfied that the prescribed person failed, without reasonable excuse, to comply with the requirement of the inspector, punish him in like manner as if he had been guilty of contempt of the Court and, if it sees fit, also make an order pursuant to paragraph (a). (15) The powers of the Court under this section may be exercised in relation to a person notwithstanding that the person has been convicted of an offence in relation to the matter in respect of which the powers are to be exercised. ##### 20 Investigation deemed to be a proceeding An investigation under this Division shall, for the purposes of Part V of the Evidence Ordinance 1971, be deemed to be a proceeding. ##### 21 Record of examination (1) An inspector may cause to be made a record of the statements made at an examination under this Division. (2) Where a record of the statements made at an examination under this Division is in writing or is reduced to writing: (a) the inspector may require the person to read the written record or have the written record read to him and may require him to sign the written record; and (b) if the person requests the inspector in writing to furnish him with a copy of the written record, the inspector shall furnish the copy to the person without charge but subject to such conditions (if any) as the inspector imposes. (3) A written record of the examination of a person under this Division that is signed by the person as mentioned in subsection (2) or is authenticated in any other prescribed manner is prima facie evidence of the statements made at the examination. (4) A person to whom a copy of a written record of an examination is given under paragraph (2)(b) and any person who comes into possession of the copy or a copy of the copy shall comply with any conditions imposed by the inspector under that paragraph. (5) Nothing in this section affects or limits the admissibility in any criminal or civil proceedings of other evidence of the statements made at an examination under this Part. (6) The Commission may give a copy of a written record made of an examination under this Division and a copy of any related book to a duly qualified legal practitioner who satisfies the Commission that he is acting for a person who is conducting, or is, in good faith, contemplating, criminal or civil proceedings in respect of any matters into which an investigation has been or is being made by an inspector under this Division. (7) A duly qualified legal practitioner to whom a copy of a written record of an examination or of a related book is given under subsection (6) or any other person who comes into possession of the copy shall not use the copy otherwise than in connection with the institution or preparation of, or in the course of, criminal or civil proceedings and shall not publish or communicate for any other purpose the copy or any part of the contents of the copy to any other person. (8) The Commission may if it thinks fit give a copy of a written record made of an examination under this Division and of any related book to any other person subject to such conditions as the Commission imposes. (9) A person to whom a copy of a written record of an examination or of a related book is given under subsection (8) and any person who comes into possession of the copy or a copy of the copy shall comply with any conditions imposed by the Commission under that subsection. Penalty: $1,000 or imprisonment for 3 months, or both. ##### 22 Record to accompany report When a final report is made in respect of an investigation under this Division, any record made of statements made at an examination relating to the investigation shall be furnished with the report. ##### 23 Admissibility of record of examination in evidence in proceedings against person examined (1) Except as provided by subsection (2), any statements made at an examination of a person under this Division are admissible in evidence in any criminal or civil proceedings against the person. (2) Evidence of a statement made by a person at an examination under this Division shall not be admitted in evidence in criminal or civil proceedings against a person if: (a) where the statement is an answer given by the person to a question—the proceedings are criminal proceedings (other than proceedings for an offence against subsection 19(4) or other proceedings in respect of the falsity of the answer) and, before answering the question, the person claimed that the answer might tend to incriminate him; (b) the statement is not relevant to the proceedings and the person objects to the admission of the evidence; (c) the statement is qualified or explained by some other statement made at the examination, evidence of the other statement is not tendered in the proceedings and the person objects to the admission of the evidence of the first‑mentioned statement; or (d) the statement discloses matter in respect of which a claim of legal professional privilege could be made by the person in the proceedings if the provision of this Division did not apply in relation to that evidence, and the person objects to the admission of the evidence. (3) This section applies whether the proceedings against the person examined are heard alone or together with proceedings against another person. ##### 24 Admissibility in other proceedings of statements at an examination Where, in any criminal or civil proceedings, direct evidence by a person of a matter would be admissible, a statement made by the person at an examination under this Division that tends to establish that matter is admissible in those proceedings as evidence of that matter: (a) if it appears to the court in which the proceedings are instituted: (i) that the person examined is dead or is unfit, by reason of any physical or mental incapacity, to attend as a witness; (ii) that the person is outside the Territory and it is not reasonably practicable to secure his attendance; or (iii) that all reasonable steps have been taken to find the person and he cannot be found; or (b) in a case to which paragraph (a) does not apply—unless a party to the proceedings, other than the party tendering evidence of the statement, requires the tendering party to call a person as a witness in the proceedings and the tendering party does not call the person as a witness in the proceedings. ##### 25 Weight of evidence In ascertaining the weight (if any) to be attached to evidence of statements admitted under section 24 in any proceedings, regard shall be had to all the circumstances from which an inference can reasonably be drawn as to the accuracy or otherwise of the evidence, including: (a) the recency or otherwise at the time when the examination concerned took place of any relevant matter dealt with at the examination; and (b) the presence and nature, or the absence, of any incentive for the person examined to conceal or misrepresent any relevant matter in his statements. ##### 26 Credibility of person who made statements (1) Where evidence of statements is admitted under section 24 in any proceedings and the person examined is not called as a witness in the proceedings, evidence is admissible where, if the person examined had been called as a witness, the evidence would have been admissible for the purpose of destroying or supporting his credibility. (2) Evidence is admissible to show that a statement made by a person referred to in subsection (1) is inconsistent with another statement made by him at any time. (3) Notwithstanding subsections (1) and (2), evidence is not admissible of any matter of which, if the person referred to in subsection (1) had been called as a witness and denied the matter in cross‑examination, evidence would not be admissible if adduced by the cross‑examining party. ##### 27 Determination of objection to admissibility of statement (1) A party to any criminal or civil proceedings may, not later than 14 days before the commencement of the hearing of the proceedings, serve upon another party notice that the first‑mentioned party proposes to tender as evidence in the proceedings the written record of an examination under this Division or a specified part of the written record of such an examination. (2) Where a notice is served under subsection (1), the other party may, within 14 days after service of the notice or within such longer period as is agreed by the parties or allowed by the court or tribunal in which the proceedings are brought, give notice to the tendering party stating that he objects to the admission in evidence of all or any of the statements contained in the written record or the part of the written record proposed to be tendered and, if he objects to the admission of some only of the statements, specifying the statements concerned. (3) A notice under subsection (2) shall, in relation to each statement objected to, specify the grounds upon which the objection is taken. (4) Upon receipt of a notice under subsection (2), the tendering party shall send a copy of the notice to the court or tribunal in which the proceedings are brought. (5) Upon receipt of the copy of a notice, the court or tribunal in which the proceedings are brought may, in its discretion, either determine the objections specified in the notice as a preliminary point of law before the commencement of the hearing of the proceedings or defer the determination of the objections until the hearing of the proceedings. (6) At the hearing of the proceedings, a party is not entitled, without the leave of the court or tribunal hearing the proceedings, to take any objection to the admission in evidence of the written record, or a part of the written record, of an examination under this Division in respect of which a notice was given to him under subsection (1) if he could have objected to the tender of the written record or of that part of the written record by a notice under subsection (2) but did not so object. (7) Nothing in this section renders inadmissible in any criminal or civil proceedings any evidence that would have been admissible if this section had not been enacted. ##### 28 Delegation by inspector (1) An inspector may, either generally or as otherwise provided by the instrument of delegation, by writing signed by him, delegate to a person any of his powers or functions under this Division other than this power of delegation. (2) The power of delegation conferred on an inspector under subsection (1) does not, except in the case of an inspector being a body corporate that is an authority of a State or Territory, extend to delegating the power to administer oaths or affirmations or the power to examine on oath or affirmation. (3) Any act or thing done in the exercise of a power or the performance of a function by a person to whom that power or function has been delegated by an inspector under subsection (1) has the same force and effect as if it had been done by the inspector. (4) A delegate shall, at the request of a prescribed person, produce the instrument of delegation for inspection. (5) A delegation under this section by an inspector does not prevent the exercise or performance of a power or function by the inspector. ##### 29 Reports of investigations (1) Where an investigation is being carried out by an inspector appointed pursuant to a direction other than a prescribed direction, the inspector may, and if so directed by the Commission shall, make interim reports to the Commission, and, on the completion or termination of the investigation, the inspector shall report to the Commission his opinion on or in relation to the matters that he has investigated, together with the facts on which his opinion is based. (2) Where an investigation is being carried out by an inspector appointed pursuant to a prescribed direction, the inspector may, and if so directed by the relevant authority shall, make interim reports to the relevant authority and, on the completion or termination of the investigation, the inspector shall report to the relevant authority his opinion on or in relation to the matters that he has investigated, together with the facts on which his opinion is based. (3) Where an investigation is being carried out by the Commission, the Commission may, and if so directed by the relevant authority shall, make interim reports to the relevant authority and, on the completion or termination of the investigation, the Commission shall report to the relevant authority its opinion on or in relation to the matters that it has investigated, together with the facts upon which its opinion is based. ##### 30 Provisions relating to reports (1) Subject to subsection (2), where, in the opinion of the Commission, the whole or any part of a report made under this Division ought to be given to a person by reason that it relates to the affairs of that person to a material extent, the Commission shall, unless in its opinion there is good reason for not divulging the contents of the report or of that part of the report, give to that person a copy of the report or of that part of the report, as the case requires. (2) Subject to subsection (3), the Commission shall not give a copy of a report or of a part of a report under this Division to a person if the Commission believes that legal proceedings that have been, or that in its opinion might be, instituted might be unduly prejudiced by giving the copy of the report or of that part of the report to that person. (3) A court before which legal proceedings are brought against a person for or in respect of matters dealt with in a report under this Division may order that a copy of the report or of a part of the report be given to that person. (4) Subject to subsection (5): (a) the Ministerial Council may cause to be printed and published the whole or any part of a report under this Division that relates to an investigation the expenses of which are, under the Agreement, to be borne by the Commission; and (b) the Minister may cause to be printed and published the whole or any part of a report under this Division that relates to an investigation the expenses of which are, under the Agreement, to be borne by the Commonwealth. (5) Where: (a) the Ministerial Council or the Minister would, but for this subsection have power to publish a report; (b) the Ministerial Council or the Minister, as the case may be, receives: (i) a certificate of the Attorney‑General of a State stating that the publication of the report would be prejudicial to the administration of justice in that State; (ii) a certificate of the Attorney‑General of the Commonwealth stating that the publication of the report would be prejudicial to the administration of justice in a Territory (not being the Northern Territory) specified in the certificate; or (iii) a certificate of the Attorney‑General of the Northern Territory stating that the publication of the report would be prejudicial to the administration of justice in that Territory; and (c) the Ministerial Council or the Minister, as the case may be, has not received a further certificate of that Attorney‑General stating that the publication of the report would no longer be prejudicial to the administration of justice in the relevant State or Territory; the Ministerial Council or the Minister, as the case may be, shall not cause or permit that report to be published in whole or in part. (6) If from a report under this Division or from the record of an examination under this Division it appears to the Commission that an offence may have been committed by a person and that a prosecution ought to be instituted, the Commission shall cause a prosecution to be instituted and prosecuted. (7) Where it appears to the Commission that a prosecution ought to be instituted, it may, by notice in writing given before or after the institution of a prosecution in accordance with subsection (6), require a person whom it suspects or believes on reasonable grounds to be capable of giving information concerning any matter to which the prosecution relates (not being a person who is or, in the opinion of the Commission, is likely to be a defendant in the proceedings or is or has been a duly qualified legal practitioner acting for such a person) to give all assistance in connection with the prosecution or proposed prosecution that he is reasonably able to give. (8) Where a person to whom a notice has been given under subsection (7) fails to comply with a requirement specified in the notice, the Court may, on the application of the Commission, direct that person to comply with the requirement. (9) If from a report under this Division, or from the record of an examination under this Division, the Commission is of the opinion that proceedings ought in the public interest to be brought by a person for the recovery of damages in respect of fraud, negligence, default, breach of duty, breach of trust or other misconduct in connection with the matters to which the investigation relates or for the recovery of property of that person, the Commission may cause proceedings to be brought accordingly in the name of that person. (9A) A copy of a report of an inspector under this Division purporting to be certified as such a report by the Commission is admissible in civil proceedings as evidence of any facts or matters stated in the report to have been found to exist by the inspector. (9B) A copy of a report of the Commission under this Division purporting to be certified as such a report by the Commission is admissible in civil proceedings as evidence of any facts or matters stated in the report to have been found to exist by the Commission. ##### 31 Commission’s powers in respect of books (1) An inspector may, when making a report under this Division, give to the Commission books of which he has taken possession under section 19 and the Commission: (a) may retain the books for such period as it considers to be necessary to enable a decision to be made as to whether or not legal proceedings ought to be instituted as a result of the investigation; (b) may retain the books for such further period as it considers to be necessary to enable any such proceedings to be instituted and prosecuted; (c) may permit other persons to inspect the books while they are in its possession; (d) may permit the use of the books for the purposes of legal proceedings instituted as a result of the investigation; and (e) shall permit a person who would be entitled to inspect any one or more of the books if they were not in the possession of the Commission to inspect at all reasonable times such of the books as that person would be so entitled to inspect. (2) Where the Commission takes possession of books under section 19, the Commission has such powers and obligations with respect to those books as it would have if it had been given those books by an inspector pursuant to subsection (1). ##### 32 Privileged communications Where in the exercise of his powers under section 19 an inspector requires a duly qualified legal practitioner to disclose a privileged communication made by or on behalf of or to that legal practitioner in his capacity as a legal practitioner, the legal practitioner is entitled to refuse to comply with the requirement unless the person to whom or by or on behalf of whom the communication was made or, if the person is a body corporate that is under official management or in the course of being wound up, the official manager or the liquidator, as the case may be, agrees to the legal practitioner complying with the requirement but, where the legal practitioner so refuses to comply with the requirement, he shall, if he knows the name and address of the person to whom or by or on behalf of whom the communication was made, forthwith furnish that name and address in writing to the inspector. Penalty: $1,000 or imprisonment for 3 months, or both. ##### 33 Expenses of investigation (1) Subject to this section and to clause 18 of the Agreement, the expenses of and incidental to an investigation shall be paid by the Commission. (2) For the purposes of this section, the expenses of and incidental to an investigation under this Division include: (a) the expenses incurred in any proceedings brought in the name of a person under subsection 30(9); and (b) in the case of an investigation carried out pursuant to a direction that is approved by the Ministerial Council pursuant to subsection 16(6)—the expenses (if any) incurred before the direction is so approved. (3) Where an investigation has been carried out under this Division and proceedings are instituted under subsection 30(9) or otherwise as a result of that investigation, the Commission may make one or more of the following orders, namely: (a) that a specified person pay, within the time and in the manner specified in the order, the whole, or a specified part, of the expenses of and incidental to the investigation; (b) where expenses have been paid by the Commission, that a specified person reimburse the Commission, within the time and in the manner specified in the order, to the extent of the payment; (c) that a specified person, within the time and in the manner specified in the order, pay, or reimburse the Commission in respect of, the whole, or a specified part, of the cost to the Commission of carrying out the investigation, including the remuneration of any employee of the Commission concerned with the investigation. (4) Where the Commission is of the opinion that the whole or any part of the expenses of or incidental to an investigation under this Division should be paid by a person to whose affairs the investigation relates, the Commission may by order in writing direct that person to pay a specified amount, being the whole or part of the expenses, within the time and in the manner specified. (5) Where a person has failed to comply with an order of the Commission under subsection (3) or (4), proceedings may be taken in a court of competent jurisdiction to recover the amount in question as a debt due to the Commission. (6) An inspector may include in his report a recommendation whether an order under subsection (3) or (4) should be made or whether orders under both those subsections should be made. (7) Where, in a case where the expenses of and incidental to an investigation or part of those expenses have been or are to be borne by a party to the Agreement, the expenses or part of the expenses borne or to be borne by that party are recovered by the Commission pursuant to this section, the Commission shall, to the extent of the amount recovered, reimburse or credit that party. ##### 34 Concealing etc. of books relating to securities (1) A person who: (a) conceals, destroys, mutilates or alters a book relating to a matter that is the subject of investigation by an inspector under this Division; (b) where such a book is in the Territory—sends the book out of the Territory; or (c) where such a book is outside the Territory but is within Australia—sends the book out of Australia; is guilty of an offence. Penalty: $20,000 or imprisonment for 5 years, or both. (2) It is a defence to a prosecution for an offence against subsection (1) if the defendant proves that he did not act with intent to defeat the purposes of this Division or to delay or obstruct the carrying out of an investigation under this Division. ##### 35 Power of Commission to make certain orders (1) Where an investigation is being made under this Division and it appears to the Commission that facts concerning securities to which the investigation relates cannot be ascertained because a prescribed person has failed or refused to comply with a requirement of an inspector, the Commission may, by instrument in writing published in the Gazette, make one or more of the following orders: (a) an order restraining a specified person from disposing of any interest in specified securities; (b) an order restraining a specified person from acquiring any interest in specified securities; (c) an order restraining the exercise of voting or other rights attached to specified securities; (d) an order directing a person who is registered as the holder of securities in respect of which an order under this section is in force to give notice in writing of that order to any person whom he knows to be entitled to exercise a right to vote attached to those securities; (e) an order directing a body corporate not to make payment, except in the course of winding up, of a sum due from the body corporate in respect of specified securities; (f) an order directing a body corporate not to register the transfer or transmission of specified securities; (g) an order directing a body corporate not to issue shares to a person who holds shares in the body corporate, being shares that were proposed to be issued to the person by reason of his holding shares in the body corporate or pursuant to an offer or invitation made or issued to him by reason of his holding shares in the body corporate. (2) The Commission may, by instrument in writing published in the Gazette, vary or revoke an order made under subsection (1). (3) A copy of an order under subsection (1) and of any order by which it is revoked or varied shall be served: (a) on any person to whom the order is directed; and (b) where it relates to specified securities: (i) on the body corporate by which the securities were issued or made available; (ii) where the securities are rights or options, on the body corporate against which the right or option is, or would be, enforceable; or (iii) on the body corporate that will issue or make available the securities. (4) Where an order made under subsection (1) is in force, a person aggrieved by the order may apply to the Court for variation or revocation of the order, and the Court may, if it is satisfied that it is reasonable to do so, vary the order or revoke the order and any order by which it has been varied. (5) A person who contravenes or fails to comply with an order under subsection (1) is guilty of an offence. ##### 36 Certain powers not to be delegated The Commission shall not delegate to any person its power under this Division to appoint an inspector to carry out an investigation, to determine the terms and conditions of such an appointment or to terminate such an appointment or to make orders under section 35. ## Part IIA—Australian Stock Exchange Limited ##### 36A Interpretation (1) In this Part: > AASE means Australian Associated Stock Exchanges. > nominated exchange means the stock exchange (if any) nominated by AASE, for the purposes of this Part, by notice in writing lodged with the Commission before the relevant commencement. > relevant commencement means the commencement of section 5 of the Australian Stock Exchange and National Guarantee Fund Act 1987. (2) A person who contravenes a provision of this Part is guilty of an offence neither by virtue of that provision nor by virtue of section 141. ##### 36B Incorporation (1) A body corporate by the name of Australian Stock Exchange Limited is incorporated in the Australian Capital Territory. (2) Subject to this Part, the Exchange shall be deemed for the purposes of a relevant Act to be incorporated under the Companies Act 1981 and to be a company limited by guarantee. (3) Notwithstanding anything in this Act, the Exchange shall not be taken for the purposes of a law of the Commonwealth, of a State or of a Territory to have been incorporated or established for a public purpose or for a purpose of the Commonwealth. ##### 36C Names of Exchange and Exchange subsidiaries (1) The name Australian Stock Exchange Limited shall be deemed to have been registered at the relevant commencement, in respect of the Exchange, under subsection 40(4) of the Companies Act 1981. (2) The names: (a) Australian Stock Exchange (Adelaide) Limited; (b) Australian Stock Exchange (Brisbane) Limited; (c) Australian Stock Exchange (Hobart) Limited; (d) Australian Stock Exchange (Melbourne) Limited; (e) Australian Stock Exchange (Perth) Limited; and (f) Australian Stock Exchange (Sydney) Limited; shall be deemed to have been registered at the relevant commencement under section 45 of the Companies Act 1981 in respect of: (g) The Stock Exchange of Adelaide Limited; (h) The Brisbane Stock Exchange Limited; (j) The Hobart Stock Exchange Limited; (k) The Stock Exchange of Melbourne Limited; (m) The Stock Exchange of Perth Limited; and (n) The Sydney Stock Exchange Limited; respectively. (3) The registration, under Division 2 of Part III of the Companies Act 1981, of each of the names referred to in paragraphs (2)(g) to (n), inclusive, shall be deemed to have been cancelled at the relevant commencement under that Division. (4) This section has effect notwithstanding anything in Division 2 of Part III of the Companies Act 1981, but nothing in this section prevents the cancellation, in accordance with that Division, of the registration of a name. ##### 36D Additional functions and powers (1) In addition to the legal capacity and powers that it has by virtue of section 67 of the Companies Act 1981, the Exchange: (a) has such functions and powers as are conferred on it by a relevant Act; and (b) shall perform any functions, and may exercise any powers, that are conferred, or expressed to be conferred, on it by a State Act or by a regulation or other instrument made under, or by virtue of, a State Act. (2) Section 68 of the Companies Act 1981 does not apply in relation to a function or power conferred, or expressed to be conferred, as mentioned in paragraph (1)(a) or (b) of this section. (3) Except so far as the contrary intention appears, a reference in this Act to functions or powers of the Exchange includes a reference to functions or powers conferred, or expressed to be conferred, as mentioned in paragraph (1)(a) or (b). ##### 36E Memorandum, articles, listing rules and business rules of Exchange (1) The memorandum of the Exchange is the proposed memorandum of the Exchange that AASE lodged with the Commission before the relevant commencement. (2) The articles of the Exchange are the proposed articles of the Exchange that AASE lodged with the Commission before the relevant commencement. (3) The memorandum and articles of the Exchange shall be deemed to have been registered at the relevant commencement under the Companies Act 1981 and that Act has effect accordingly. (4) As from the relevant commencement, the proposed listing rules, and the proposed business rules, of the Exchange that AASE lodged with the Commission before that commencement shall be deemed for the purposes of a relevant Act to be rules made by the Exchange at that commencement under its articles. ##### 36F New memorandum and articles of nominated exchange (1) As from the relevant commencement, the memorandum of the nominated exchange is the proposed new memorandum of the nominated exchange that AASE lodged with the Commission before that commencement. (2) As from the relevant commencement, the articles of the nominated exchange are the proposed new articles of the nominated exchange that AASE lodged with the Commission before that commencement. (3) This section has effect notwithstanding anything in the Companies Act 1981 but, as from the relevant commencement, that Act applies in relation to the memorandum and articles of the nominated exchange as if they had been registered as such under that Act. ##### 36G Membership of Exchange (1) A person who immediately before the relevant commencement was a member of the nominated exchange otherwise than by reason only of being, for the purposes of the nominated exchange’s articles, a Registered Options Member becomes at that commencement a member of the Exchange. (2) A person of a kind declared, by a provision of a law of a participating State or participating Territory that corresponds with subsection (1), to become at the relevant commencement a member of the Exchange becomes at that commencement a member of the Exchange. (3) Subject to this Act, a person of a kind referred to in subsection (1) or (2) is, in respect of membership of the Exchange, entitled to the same rights, privileges and benefits, and subject to the same duties, liabilities and obligations, as if the person had become a member of the Exchange in accordance with the Exchange’s business rules. ##### 36H Membership of nominated exchange (1) A person who immediately before the relevant commencement was a member of the nominated exchange ceases at that commencement to be such a member. (2) Notwithstanding section 360 of the Companies Act 1981, a person who ceases by virtue of subsection (1) of this section to be a member of the nominated exchange is not by virtue of having been such a member liable to contribute to the property of the nominated exchange if the nominated exchange is wound up. (3) The Exchange becomes at the relevant commencement a member of the nominated exchange. (4) The Exchange becomes at the relevant commencement a member of each body corporate of which the Exchange is declared, by a provision of a law of a participating State or participating Territory that corresponds with subsection (3), to become a member at that commencement. (5) In respect of membership of the nominated exchange, the Exchange is entitled to the same rights, privileges and benefits, and subject to the same duties, liabilities and obligations, as if the Exchange had become a member of the nominated exchange in accordance with the nominated exchange’s business rules. (6) After the relevant commencement, a person other than the Exchange is not capable of being a member of the nominated exchange. (7) Subsection 82(1) of the Companies Act 1981 does not apply in relation to a company within the meaning of that Act if, and for so long only as, the company is an Exchange subsidiary. (8) A body corporate that is at a particular time: (a) a company within the meaning of the Companies Act 1981; and (b) an Exchange subsidiary; shall be deemed, for the purposes only of section 250 of that Act, to be at that time an exempt proprietary company. (9) A person who immediately before the relevant commencement was a director of the nominated exchange ceases at that commencement to be such a director. (10) Subsection 219(1) of the Companies Act 1981 does not, at any time during the period of 14 days beginning at the relevant commencement, apply in relation to a company within the meaning of that Act that is an Exchange subsidiary. ##### 36J Disciplinary proceedings in respect of past conduct of nominated exchange members (1) In this section, unless the contrary intention appears: > AASE exchange means: (a) the nominated exchange; or (b) a body corporate that is the nominated exchange for the purposes of the provisions of a law of a participating State or participating Territory that correspond with this Part. > applied rules means the former rules as they have effect by virtue of this section. > corresponding provision means a provision of a law of a participating State or participating Territory that corresponds with this section. > disciplinary proceeding means: (a) a proceeding that was begun under the former rules and might, if this Part had not been enacted, have resulted in the disciplining of a member for past conduct; (b) a proceeding that is begun under the applied rules and may result in the disciplining of a member for past conduct; (c) an appeal begun under the former rules, or the applied rules, from a proceeding of the kind referred to in paragraph (a); (d) an appeal begun under the applied rules from a proceeding of a kind referred to in paragraph (b); or (e) a proceeding in a court, whenever begun, arising out of, or otherwise connected with, a proceeding or appeal of a kind referred to in paragraph (a), (b), (c) or (d). > disciplining, in relation to a member, includes expulsion from, or suspension of, membership of the nominated exchange or the Exchange. > former rules means the nominated exchange’s business rules as in force at any time before the relevant commencement. > member means a person who is or has been: (a) a member of the nominated exchange; or (b) under an obligation to comply with, observe, enforce, or give effect to, the former rules. > past conduct means an act done, or omitted to be done, before the relevant commencement. > relevant time means the time immediately before the relevant commencement. (2) This section has effect notwithstanding section 36F. (3) The former rules continue after the relevant commencement to have in relation to past conduct the effect that, at the relevant time, they had in relation to that past conduct. (4) For the purposes of a disciplinary proceeding begun before the relevant commencement, the former rules continue after that commencement to have the effect that, at the relevant time, they had for the purposes of that disciplinary proceeding. (5) For the purposes of a disciplinary proceeding begun after the relevant commencement, the former rules have the effect that, if that disciplinary proceeding had begun at the relevant time, they would have had at that time for the purposes of that disciplinary proceeding. (6) The former rules have effect by virtue of subsections (3), (4) and (5): (a) subject to paragraph (b) of this subsection, as if a reference in the former rules to the nominated exchange or to an AASE exchange were, except in relation to a time before the relevant commencement, a reference to the Exchange; (b) as if a reference in the former rules to the former rules, or to a provision of the former rules, were, except in relation to a time before that commencement, a reference to the former rules as they have effect, or to that provision as it has effect, as the case may be, by virtue of this section; and (c) with such other modifications as the circumstances require. (7) The applied rules within the meaning of this section or of a corresponding provision bind an eligible person to the same extent, and in the same manner, as if they were contained in the Exchange’s business rules. (8) In subsection (7), eligible person means the Exchange or a person who is or has been: (a) a member of the Exchange; or (b) under an obligation to comply with, observe, enforce, or give effect to, the Exchange’s business rules. (9) Without limiting the generality of subsection (7), section 42 applies in relation to the applied rules within the meaning of this section or of a corresponding provision as if they were contained in the Exchange’s business rules. (10) At the relevant commencement, the Exchange is substituted for the nominated exchange as a party to each disciplinary proceeding. (11) As from the relevant commencement, the Exchange has, subject to this section, the same rights in a disciplinary proceeding as the party for which it was substituted by virtue of subsection (10). (12) Where: (a) under an AASE exchange’s business rules as in force at any time before the relevant commencement, a person was: (i) suspended for a specified period from some or all of the rights of membership of that AASE exchange; or (ii) prohibited for a specified period from transacting business with or through a member or member organisation of an AASE exchange; and (b) as at that commencement, the specified period has not ended; then, as from that commencement: (c) the person is, throughout the remainder of the specified period, suspended from the corresponding rights of membership of the Exchange, or prohibited from transacting business with or through a member or member organisation of the Exchange, as the case may be; and (d) the suspension or prohibition referred to in paragraph (c) is subject to the terms and conditions (if any), with such modifications as the circumstances require, to which the suspension or prohibition referred to in paragraph (a) was subject immediately before the relevant commencement. ##### 36K Seat redemption scheme (1) In this section: > available money means: (a) if the Commission determines an amount in writing for the purposes of this paragraph—so much of the amount that the nominated exchange pays to the Exchange under subsection 36M(3) as does not exceed the amount that the Commission so determines; (b) amounts of levies imposed: (i) under the Exchange’s business rules; (ii) on local members; and (iii) for the purposes of enabling the Exchange to comply with the Scheme; (c) fees payable, in respect of their admission to membership of the Exchange, by persons who immediately after their admission are local members; and (d) the interest and profits accruing from the investment of money that is available money by virtue of a previous application or previous applications of this definition. > eligible person means a person who was throughout the relevant period a member of the nominated exchange. > local member means a member of the Exchange whose Home Jurisdiction for the purposes of the Exchange’s articles is the Territory. > relevant period means the period commencing immediately before 1 July 1983 and ending immediately before the relevant commencement. > Scheme means the seat redemption scheme (if any) of the nominated exchange, being the scheme particulars of which are set out in the notice referred to in the definition of nominated exchange in subsection 36A(1). (2) After the relevant commencement, the Scheme has effect, with such modifications as the circumstances require, as if the Exchange were substituted for the nominated exchange as a party to the Scheme and, except in relation to a time before that commencement: (a) a reference in the provisions of the Scheme to the nominated exchange or to the committee of the nominated exchange were a reference to the Exchange, or to the committee of the Exchange, as the case may be; and (b) a reference in the provisions of the Scheme to a person ceasing to be a member of the nominated exchange were a reference to an eligible person ceasing to be a member of the Exchange. (3) An eligible person shall not, by reason only of ceasing by virtue of subsection 36H(1) to be a member of the nominated exchange, be taken for the purposes of the Scheme to have ceased to be a member of the nominated exchange. (4) Notwithstanding anything in the Scheme, amounts that the Exchange becomes liable to pay under the Scheme shall be paid only out of available money. ##### 36L Exchange to take over main board listing agreements (1) In this section: > listed body means a body corporate, government, unincorporated body or other person. > main board listing agreement means an agreement: (a) that is or has been in force between the nominated exchange and a listed body; (b) that relates or related to the admission of the listed body to the official list of the nominated exchange; and (c) under or by virtue of which the listed body is or was under an obligation to comply with, observe, or give effect to, the Listing Requirements of AASE, as adopted as listing rules of the nominated exchange. (2) After the relevant commencement, a main board listing agreement in force immediately before that commencement has effect, with such modifications as the circumstances require, as if the Exchange were substituted for the nominated exchange as a party to the agreement and, except in relation to a time before that commencement: (a) a reference in the provisions of the agreement to the nominated exchange were a reference to the Exchange; (b) a reference in the provisions of the agreement to the Listing Requirements of AASE, or to listing rules of the nominated exchange, were a reference to the listing rules of the Exchange; and (c) a reference in the provisions of the agreement to the official list of the nominated exchange were a reference to the official list of the Exchange. (3) Where, immediately before the relevant commencement, proceedings: (a) to which the nominated exchange was a party; and (b) that arose out of, or were otherwise connected with, a main board listing agreement; were pending in a court or tribunal, the Exchange shall indemnify the nominated exchange in respect of all liabilities, expenses, costs or charges incurred by the nominated exchange: (c) as a party to the proceedings; (d) in complying with a judgment or other order given in the proceedings; or (e) otherwise in connection with the proceedings. ##### 36M Transfer of certain assets of nominated exchange (1) Within 3 months after the relevant commencement, the Commission shall, after consulting with the Exchange, determine in writing an amount for the purposes of this section. (2) The Commission shall: (a) give to the Exchange and to the nominated exchange a copy of its determination under this section; and (b) cause a copy of the determination to be published in the Gazette; but failure by the Commission to comply with this subsection does not affect the validity of the determination. (3) The nominated exchange shall, within 14 days after receiving the Commission’s determination under this section, pay to the Exchange the amount specified in the determination. ##### 36N Transfer of Part VIII deposits held by nominated exchange (1) In this section: > outstanding deposit, in relation to a relevant member, means a deposit that: (a) the relevant member lodged under Part VIII with the nominated exchange before the relevant commencement; and (b) the nominated exchange held, immediately before that commencement, on trust for the relevant member. > relevant member means a member organisation of the Exchange that was, immediately before the relevant commencement, a member organisation of the nominated exchange. (2) An outstanding deposit in relation to a relevant member: (a) vests in the Exchange at the relevant commencement; and (b) as from that commencement, is held on trust by the Exchange for the relevant member as if the relevant member had lodged the deposit with the Exchange under Part VIII. (3) Property in which an outstanding deposit in relation to a relevant member has, before the relevant commencement, been invested by the nominated exchange and that was held by the nominated exchange immediately before that commencement vests at that commencement in the Exchange. (4) For the purposes of the application of Part VIII after the relevant commencement in relation to an outstanding deposit in relation to a relevant member, the relevant member shall be deemed to have lodged and maintained the deposit with the Exchange under that Part. ##### 36P How Parts VIII and IX apply in relation to a local Exchange subsidiary (1) Subsections (2) and (3) have effect throughout the period beginning at the relevant commencement and ending on the day on which the Ministerial Council first makes a nomination under subsection 122BA(1). (2) The Exchange shall pay money received by way of interest in respect of amounts invested by it under subsection 97(1) into the fidelity fund of a local Exchange subsidiary. (3) The fidelity fund of a local Exchange subsidiary shall guarantee the repayment by the Exchange of the amount of a deposit received by the Exchange under Part VIII. (4) After the relevant commencement, Part IX applies in relation to a local Exchange subsidiary, with such modifications as the circumstances require, as if: (a) subject to this subsection, a reference in that Part (other than section 99A, 100 or 112) to a securities exchange were a reference to that subsidiary; (b) a reference in paragraph 101(c) or (e) or section 109 to a securities exchange included a reference to the Exchange; (c) a reference in that Part to a member of a securities exchange were a reference to a person who is, or who is a partner in, a local member organisation; (d) a reference in that Part to a member firm, in relation to a securities exchange, were a reference to a partnership that is a local member organisation; (e) a reference in that Part to a sole trader were a reference to a person who is a local member organisation; and (f) a reference in subsection 106(1) to a person being admitted to membership of a securities exchange were a reference to a person becoming at a particular time (otherwise than by virtue of section 36G or a provision of a law of a participating State or participating Territory that corresponds with that section) a member of the Exchange in circumstances where, immediately after that time, the person’s Home Jurisdiction for the purposes of the Exchange’s articles is the Territory. (5) In subsection (4), local member organisation means a member organisation of the Exchange whose Home Jurisdiction for the purposes of the Exchange’s articles is the Territory. (6) In addition to the effect that sections 111 to 120, inclusive, have in relation to a local Exchange subsidiary by virtue of subsection (4) of this section, those sections continue after the relevant commencement to have in relation to that subsidiary the effect they would so have if that subsection had not been enacted. ##### 36Q Appointment of new trustees of certain trusts (1) In this section: > eligible body means: (a) AASE; (b) the nominated exchange; (c) a body corporate that is the nominated exchange for the purposes of the provisions of a law of a participating State or participating Territory that correspond with this Part; or (d) a subsidiary of AASE, of the nominated exchange or of a body corporate of a kind referred to in paragraph (c). > eligible employee means an employee of an eligible body. > eligible trust means: (a) a trust established in connection with the affairs of an eligible body; or (b) a trust that is a provident, benefit, superannuation or retirement fund established for the benefit of a class of eligible employees. > trustee has the same meaning as that expression has in the law in force in the Territory relating to trustees, but includes: (a) a nominee; (b) a custodian trustee; and (c) a person charged with the management or administration of property. (2) Where, immediately before the relevant commencement, a person (in this section referred to as the retiring trustee) was a trustee of an eligible trust, the Exchange may, within 12 months after that commencement, appoint in writing a person as a trustee, or persons as trustees, of the trust in place of the retiring trustee and, if the Exchange does so, subsections (3) and (4) have effect. (3) The Exchange shall give a copy of the appointment to the Commission and the Commission shall cause such a copy to be published in the Gazette. (4) Upon publication under subsection (3) of a copy of the appointment, subsections (5), (6), (7) and (8) have effect, notwithstanding any instrument or any other law. (5) The retiring trustee ceases to be a trustee of the trust and is wholly discharged from his, her or its duties and obligations relating to the trust. (6) The person appointed becomes a trustee, or the persons appointed become trustees, as the case may be, of the trust in place of the retiring trustee and has or have in relation to the trust the same powers, authorities, discretions, duties and obligations as the retiring trustee had in relation to the trust immediately before his, her or its discharge. (7) Property that immediately before the retiring trustee’s discharge was vested in the retiring trustee in his, her or its capacity as trustee of the trust vests in the person appointed, or in the persons appointed as joint tenants, as the case may be. (8) Property that immediately before the retiring trustee’s discharge was vested in the retiring trustee and another person or other persons as joint tenants in their capacity as trustees of the trust vests in the person or persons appointed and the other person or other persons as joint tenants. ##### 36R Transfer of assets and liabilities of AASE (1) At the relevant commencement: (a) the rights, property and assets that immediately before that commencement were vested in AASE vest in the Exchange; and (b) the Exchange becomes liable to pay and discharge the debts, liabilities and obligations of AASE that existed immediately before that commencement. (2) After the relevant commencement, an agreement or arrangement entered into by or on behalf of AASE as a party and in force immediately before that commencement has effect, with such modifications as the circumstances require, as if: (a) the Exchange were substituted for AASE as a party to the agreement or arrangement; and (b) a reference to AASE in the provisions of the agreement or arrangement were, except in relation to a time before that commencement, a reference to the Exchange. (3) Where, immediately before the relevant commencement, proceedings to which AASE was a party were pending in any court or tribunal, the Exchange is substituted at that commencement for AASE as a party to the proceedings and has the same rights in the proceedings as the party for which it was substituted. ##### 36S Transfer of AASE employees (1) In this section, transferred employee means a person who becomes an employee of the Exchange by virtue of subsection (2). (2) At the relevant commencement, an employee of AASE ceases to be an employee of AASE and becomes an employee of the Exchange. (3) A transferred employee’s terms and conditions of employment as an employee of the Exchange: (a) are, until varied, the same as the terms and conditions on which he or she was employed as an employee of AASE immediately before the relevant commencement; (b) may be varied to the extent to which, and in the manner in which, the terms and conditions referred to in paragraph (a) could, immediately before that commencement, be varied; and (c) may also be varied to the extent to which, and in the manner in which, the general terms and conditions of persons as employees of the Exchange may be varied. (4) For the purposes of the application of a law, award, determination, contract or agreement in relation to the employment of a transferred employee as an employee of the Exchange: (a) his or her contract of employment shall not be taken to have been broken by the operation of subsection (2); and (b) his or her period as an employee of AASE shall be deemed to be a period as an employee of the Exchange. (5) A transferred employee is not entitled to receive a payment or other benefit by reason only of ceasing by virtue of subsection (2) to be an employee of AASE. (6) Nothing in this section (other than subsection (5)) affects a person’s rights or liabilities under any provident, benefit, superannuation or retirement fund or scheme relating to, or to persons including, employees of AASE. (7) A director, secretary or auditor of AASE does not, by virtue of this section, become a director, secretary or auditor of the Exchange. (8) This section has effect notwithstanding subsections 36R(1) and (2). ##### 36T Part not to prejudice corresponding provisions (1) In this section, corresponding provision means a provision of a law of a participating State or participating Territory that corresponds with a provision of this Part. (2) Nothing in this Part limits or otherwise prejudices a corresponding provision. (3) Without limiting the generality of subsection (2), nothing in this Part prevents a corresponding provision from vesting property in, conferring a right, privilege or benefit on, or imposing a debt, duty, liability or obligation on, the Exchange. (4) Nothing in this Part prevents a law of a participating State or participating Territory from imposing on the Exchange, or on the body corporate that is the nominated exchange for the purposes of the provisions of a law of such a State or Territory that correspond with this Part, a liability (whether by way of a tax or otherwise) to pay an amount calculated by reference to, or to matters including, the total of the amounts of stamp duty that would have become payable by the Exchange or AASE, or by that body corporate, as the case may be, under a law of the first‑mentioned State or Territory if: (a) this Part had not been enacted; (b) the Exchange had been incorporated under the Companies Act 1981 as a company limited by guarantee; and (c) to the extent that it would have been possible to make under applicable laws the arrangements made by this Part and the corresponding provisions, those arrangements had been made under those applicable laws. ## Part III—Securities exchanges ##### 37 Establishment etc. of stock markets (1) A person shall not establish, maintain or provide, or assist in establishing, maintaining or providing, or hold himself out as maintaining or providing, a stock market that is neither a stock market of a securities exchange nor an exempt stock market. Penalty: $5,000 or imprisonment for 1 year, or both. (1A) The Ministerial Council may, by instrument in writing, declare that a specified stock market, or a stock market included in a specified class of stock markets, is, subject to any specified conditions, an exempt stock market for the purposes of this Act. (1B) Without limiting the matters to which the Ministerial Council may have regard in considering whether to vary or revoke a declaration in force under subsection (1A), the Ministerial Council may, in so considering, have regard to a breach of a condition specified in the declaration. (2) A person who, being the holder of a licence under a law relating to the licensing of auctioneers, conducts an auction of forfeited shares at a place at which, or by a facility by means of which, a securities exchange maintains or provides a stock market, shall not be taken to contravene this section by reason of his conducting that auction. ##### 38 Power of Ministerial Council to approve stock exchange (1) A body corporate that proposes to establish, maintain or provide a stock market may lodge with the Commission an application in writing for approval by the Ministerial Council as a stock exchange. (2) The Ministerial Council may, by instrument in writing, approve as a stock exchange a body corporate that makes an application under subsection (1) if it is satisfied: (a) that the business rules of the body corporate make satisfactory provision: (i) for the exclusion from membership of: (A) any person who is not of good character and high business integrity; and (B) any body corporate a director of which is not of good character and high business integrity; (ii) for the expulsion, suspension or disciplining of members for conduct inconsistent with just and equitable principles in the transaction of business or for a contravention of or failure to comply with the business rules of the proposed stock exchange or the provisions of this Act; (iii) with respect to the conditions under which securities may be listed for trading on the stock market of the proposed stock exchange; (iv) with respect to the conditions governing dealings in securities by members; (v) with respect to the class or classes of securities that may be dealt with by members; and (vi) generally for the carrying on of the business of the proposed stock exchange with due regard to the interests of the public; (b) that the body corporate has made or adopted listing rules and, where the listing rules are adopted, has made provision to the effect that an amendment to the rules so adopted made by another person is of no effect until the body corporate adopts the amendment; (c) that the listing rules made or adopted by the body corporate make satisfactory provision: (i) with respect to conditions under which securities may be traded on the stock market of the proposed stock exchange; and (ii) generally for the protection of the interests of the public; and (d) that the interests of the public will be served by the granting of its approval. ##### 38A Power of Ministerial Council to approve body corporate as approved securities organisation (1) A body corporate that proposes to establish, maintain or provide a stock market may lodge with the Commission an application in writing for approval by the Ministerial Council as an approved securities organisation. (2) The Ministerial Council may, by instrument in writing, approve as an approved securities organisation a body corporate that makes an application under subsection (1) if it is satisfied: (a) that the business rules of the body corporate make satisfactory provision: (i) for efficient, honest, fair, competitive and informed trading in securities on the stock market or stock markets of the proposed approved securities organisation (in this subsection referred to as the organisation); and (ii) generally for the carrying on of the business of the organisation with due regard to the interests of the public; and, without limiting the generality of the foregoing, make satisfactory provision in relation to such of the following matters as appear to the Ministerial Council to be relevant in relation to the application: (iii) the admission, suspension, expulsion and discipline of members; (iv) dealings in securities by members; (v) the listing of securities for trading on the stock market or stock markets of the organisation; (vi) trading in securities on the stock market or stock markets of the organisation; (vii) the clearing and settlement of dealings in securities that result from trading in securities on the stock market or stock markets of the organisation; (viii) the quotation of securities on, and the reporting of trading in securities on, the stock market or stock markets of the organisation; (ix) the monitoring of compliance with, and the enforcement of, the business rules of the organisation; (b) that the body corporate has made or adopted listing rules and, where the listing rules are adopted, has made provision to the effect that an amendment of the rules so adopted made by another person is of no effect until the body corporate adopts the amendment; (c) that the listing rules made or adopted by the body corporate make satisfactory provision: (i) with respect to conditions under which securities may be traded on the stock market or stock markets of the organisation; and (ii) generally for the protection of the interests of the public; and (d) that the interests of the public will be served by the granting of its approval. ##### 38B Publication of instruments executed under section 37, 38 or 38A The Commission shall cause a copy of an instrument executed by the Ministerial Council under subsection 37(1A), 38(2) or 38A(2) to be published in the Gazette, but failure of the Commission to do so does not affect the validity of the instrument. ##### 39 Commission to be notified of amendments to rules (1) Where: (a) an amendment is made, by way of rescission, alteration or addition, to the business rules of a securities exchange; or (b) an amendment, by way of rescission, alteration or addition, to the listing rules of a securities exchange is made or adopted by the securities exchange; the securities exchange shall, forthwith after the making or adoption of the amendment, give written notice of the amendment to the Commission. (2) A notice under subsection (1) shall: (a) set out the text of the amendment; (b) specify the date on which the amendment was made or adopted; and (c) contain an explanation of the purpose of the amendment. (3) If the notice required to be given by subsection (1) is not given within 21 days after the amendment is made or adopted, the amendment ceases to have effect. (4) Where the Commission receives a notice under this section, the Commission shall forthwith send a copy of the notice to each member of the Ministerial Council. (5) The Ministerial Council may, within 28 days after the receipt by the Commission of a notice under this section, disallow the whole or a specified part of the amendment to which the notice relates. (6) Where the Ministerial Council disallows the whole or a part of an amendment to which a notice under this section relates, the Commission shall forthwith give notice of the disallowance to the securities exchange and, upon receipt by the securities exchange of the notice of disallowance, the amendment, to the extent of the disallowance, ceases to have effect. ##### 40 Power of Commission to prohibit trading in particular securities (1) Where the Commission forms the opinion that it is necessary to prohibit trading in particular securities of, or made available by, a body corporate on the stock market of a securities exchange in order to protect persons buying or selling the securities or in the interests of the public, the Commission may give notice in writing to the securities exchange stating that it has formed that opinion and setting out the reasons for the formation of that opinion. (2) If, after the receipt of the notice, the securities exchange does not take action to prevent trading in the securities to which the notice relates on the stock market of the securities exchange and the Commission is still of the opinion that it is necessary to prohibit trading in those securities on that stock market, the Commission may, by notice in writing to the securities exchange, prohibit trading in those securities on that stock market during such period, not exceeding 21 days, as is specified in the notice. (3) Where the Commission gives a notice to a securities exchange under subsection (2) in relation to trading in securities of, or made available by, a body corporate, the Commission shall: (a) at the same time send a copy of the notice to the body corporate together with a statement setting out the reasons for the giving of the notice; and (b) as soon as practicable furnish to the Ministerial Council a written report setting out the reasons for the giving of the notice and send a copy of the report to the securities exchange. (4) Where the Commission gives a notice to a securities exchange under subsection (2) in relation to trading in securities of, or made available by, a body corporate, the body corporate may request the Commission in writing to refer the matter to the Ministerial Council. (5) Where such a request is made, the Commission shall forthwith refer the matter to the Ministerial Council, which may, if it thinks fit, direct the Commission to revoke the notice and, if such a direction is given, the Commission shall forthwith revoke the notice. (6) A securities exchange shall not permit trading in securities on the stock market of the securities exchange in contravention of a notice under subsection (2). Penalty: $1,000 for each day on which the securities exchange contravenes this subsection. ##### 41 Securities exchanges to provide assistance to Commission (1) A securities exchange shall provide such assistance to the Commission, or to a person acting on behalf of, or with the authority of, the Commission, as the Commission reasonably requires for the performance of its functions and duties. (2) Where a securities exchange reprimands, fines, suspends, expels or otherwise takes disciplinary action against a member of the securities exchange, it shall forthwith give to the Commission in writing particulars of the name of the member, the reason for and nature of the action taken, the amount of the fine (if any) and the period of the suspension (if any). (3) A person authorized by the Commission is entitled at all reasonable times to full and free access for any of the purposes of this Act to the trading floor or trading floors of a securities exchange. (4) A person who refuses or fails, without lawful excuse, to allow a person authorized by the Commission access in accordance with subsection (3) to a trading floor of a securities exchange is guilty of an offence. Penalty: $2,500 or imprisonment for 6 months, or both. (5) In this section, trading floor, in relation to a securities exchange, means a place or facility maintained or provided by the securities exchange for: (a) the making or acceptance, by members of the securities exchange, or by such members and other persons, of offers to sell, purchase or exchange securities; (b) the making, by members of the securities exchange, or by such members and other persons, of offers or invitations that are intended, or may reasonably be expected, to result, whether directly or indirectly, in the making or acceptance of offers to sell, purchase or exchange securities; or (c) the provision of information concerning the prices at which, or the consideration for which, particular persons, or particular classes of persons, propose, or may reasonably be expected, to sell, purchase or exchange securities. ##### 42 Power of Court to order observance or enforcement of business rules or listing rules of securities exchange (1) Where any person who is under an obligation to comply with, observe, enforce or give effect to the business rules or listing rules of a securities exchange fails to comply with, observe, enforce or give effect to any of those business rules or listing rules, as the case may be, the Court may, on the application of the Commission, the securities exchange or a person aggrieved by the failure and after giving to the person against whom the order is sought an opportunity of being heard, make an order giving directions to the last‑mentioned person concerning the compliance with, observance or enforcement of, or the giving effect to, those business rules or listing rules. (2) For the purposes of subsection (1), a person (in this subsection referred to as the relevant person), being: (a) a body corporate that has, with its agreement, consent or acquiescence, been admitted to the official list of a securities exchange and has not been removed from that official list; or (b) a person associated with a body corporate that has, with its agreement, consent or acquiescence, been admitted to the official list of a securities exchange and has not been removed from that official list; shall be deemed to be under an obligation to comply with, observe and give effect to the listing rules of that securities exchange to the extent to which those rules purport to apply in relation to the relevant person. ##### 42A Certain laws not applicable to option contracts to which this Act applies For the purposes of any law, an option contract to which this Act applies is not a contract by way of gaming or wagering if it was entered into on a stock market of a securities exchange or on an exempt stock market. ##### 42B Qualified privilege in respect of disciplinary proceedings (1) In this section: > disciplinary proceeding, in relation to a securities exchange, means: (a) a proceeding under the business rules of the securities exchange that may result in the disciplining of a member of the securities exchange; or (b) an appeal under the business rules of the securities exchange from a proceeding of a kind referred to in paragraph (a); whether or not the proceeding or appeal began after the relevant commencement. > disciplining, in relation to a member of a securities exchange, includes expulsion from, or suspension of, membership of the securities exchange. > member, in relation to a securities exchange, includes a person who is under an obligation to comply with, observe, enforce, or give effect to, the business rules of the securities exchange. > relevant commencement means the commencement of section 6 of the Australian Stock Exchange and National Guarantee Fund Act 1987. > securities exchange includes a recognised securities exchange. (2) In the absence of malice, a securities exchange, or a member, officer or employee of a securities exchange, is not liable to an action for defamation in respect of a statement made by a person, orally or in writing, after the relevant commencement and in the course of, or otherwise for the purposes of or in connection with, a disciplinary proceeding of the securities exchange. (3) Where: (a) an Exchange subsidiary is acting on behalf of the Exchange; or (b) an officer or employee of an Exchange subsidiary is acting on behalf of the Exchange or of a member, officer or employee of the Exchange; in connection with a disciplinary proceeding of the Exchange, neither the Exchange subsidiary nor an officer or employee of the Exchange subsidiary is, in the absence of malice, liable to an action for defamation in respect of a statement made by a person, orally or in writing, after the relevant commencement and in the course of, or otherwise for the purposes of or in connection with, the disciplinary proceeding. (4) A person is not liable for an action for defamation in respect of the publication without malice of: (a) a statement made by a person, orally or in writing, after the relevant commencement and in the course of, or otherwise for the purposes of or in connection with; or (b) a document prepared, furnished or produced by a person, after the relevant commencement and in the course of, or otherwise for the purposes of or in connection with; a disciplinary proceeding of a securities exchange. (5) This section does not limit or affect a right, privilege or immunity that a person has, apart from this section, as defendant in an action for defamation. ## Part IV—Participants in the securities industry ### Division 1—Dealers and investment advisers ##### 43 Dealers 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. Penalty: $5,000 or imprisonment for 1 year, or both. ##### 45 Investment advisers 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. Penalty: $5,000 or imprisonment for 1 year, or both. ##### 47 Application for a licence (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. ##### 48 Grant of licence to natural person (1) This section applies where a natural person applies for a licence. (2) The Commission shall grant the licence if: (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. (3) Otherwise, the Commission shall refuse the application. (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. ##### 48A Grant of licence to body corporate (1) This section applies where a body corporate applies for a licence. (2) The Commission shall grant the licence if: (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. (3) Otherwise, the Commission shall refuse the application. (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. ##### 48B Effect of certain provisions (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. ##### 51 Conditions of licence (1) A licence is subject to: (a) such conditions and restrictions as are prescribed; and (b) subject to section 62P, such conditions and restrictions as the Commission imposes when granting the licence or at any time when the licence is in force. (2) Without limiting the generality of subsection (1), conditions and restrictions referred to in paragraph (1)(a) or (b): (a) may include conditions and restrictions relating to the limitation of the liability that may be incurred by the holder of a dealers licence in connection with a business of dealing in securities; (b) may include conditions and restrictions relating to the incurring and disclosure of liabilities arising otherwise than in connection with a business of dealing in securities; (c) may include conditions and restrictions relating to the financial position of the holder of a dealers licence, whether in relation to the business of dealing in securities carried on by him or otherwise; (d) may include a condition requiring the holder of a dealers licence or of an investment advisers licence to lodge and maintain with the local authority a security approved by the Commission for such amount not exceeding the prescribed amount as is, from time to time, determined by the Commission in relation to the holder of that licence; (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. (3) Without limiting the generality of paragraph (2)(c), the conditions referred to in that paragraph: (a) may include a condition that the assets of the holder of a dealers licence include, or do not include, assets of a particular kind or kinds; and (b) may include a condition that the sum of the values of the assets of a particular kind or kinds included in the assets of the holder of a dealers licence be not less than, or not greater than, an amount ascertained in accordance with the condition. (4) A condition referred to in paragraph (3)(b) may provide for the values of assets of a dealer for the purposes of the application of that condition to be ascertained in a manner specified in, or determined in accordance with, the condition. (5) The provision that may be made in a condition referred to in paragraph (3)(b) for ascertaining the amount referred to in that paragraph may be, but is not limited to, a provision that that amount shall be: (a) a specified percentage of the sum of the values of all the assets of the holder of the dealers licence; (b) a specified percentage of the sum of the values of all the assets of the holder of the dealers licence that are included in a specified class or classes of those assets; (c) a specified percentage of the sum of the amounts of all the liabilities of the holder of the dealers licence; or (d) a specified percentage of the sum of the amounts of all the liabilities of the holder of the dealers licence that are included in a specified class or classes of those liabilities. (6) A reference in this section to the assets of the holder of a dealers licence shall be construed as a reference to all the assets of the holder of the licence, whether or not the assets are used in, or in connection with, the business of dealing in securities carried on by him. (7) Subject to section 62P, the Commission may, at any time, revoke or vary conditions or restrictions imposed by the Commission under paragraph (1)(b). (8) Where the Commission imposes, or varies or revokes, conditions or restrictions under this section in relation to a licence granted to a member of a securities exchange, the Commission shall inform the securities exchange and, if the member is a partner in a member firm, the member firm. (9) Where a security is lodged with the local authority pursuant to a condition to which a licence is subject in accordance with paragraph (2)(d), the security may be applied by the local authority in such circumstances, for such purposes and in such manner as is prescribed. (9A) The regulations may make provision for or in relation to the discharge in whole or in part by the local authority of securities lodged pursuant to this section. (10) In this section, local authority means the Corporate Affairs Commission for the Territory. ##### 52 Licensee to notify breach of licence condition (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. (3) In a prosecution of a person for failing to give a notice to the Commission under this section, it is a defence if the defendant establishes that: (a) at the time when he was required to give the notice he was not aware of a fact or occurrence that gave rise to the requirement; and (b) he did not become aware of that fact or occurrence before the date of the information or, if he became so aware before that date, he gave the notice as soon as reasonably practicable after the day on which he became so aware. ##### 53 Furnishing of information and statements to Commission (1) The holder of a dealers licence shall furnish to the Commission such information in writing or statements in respect of the business of dealing in securities carried on by him as the Commission from time to time directs. Penalty: $1,000. (2) A direction under this section may require the holder of a dealers licence to cause a statement referred to in the direction to be audited by a registered company auditor before it is furnished to the Commission. (3) Where the Commission has directed the holder of a dealers licence under this section to furnish information or a statement within a particular period, the Commission may extend, or further extend, the period for the furnishing of the information or statement. ##### 54 Register of Licence Holders (1) The Commission shall keep a Register of Licence Holders for the purposes of this Act. (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. (4) A person may inspect and make copies of, or take extracts from, the Register of Licence Holders. (5) The Commission may enter in the Register of Licence Holders particulars of recognized licensees, being particulars of: (a) the name of the recognized licensee; (b) the date (if known) on which the recognized licensee became a recognized licensee; and (c) such other matters as are prescribed. (6) Where the Commission becomes aware that a person whose name is entered in the Register of Licence Holders as a recognized licensee has ceased to be a recognized licensee, the Commission shall remove from the Register the name of the person and any other particulars entered in the Register in relation to the person. ##### 55 Notifying change in particulars 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. ##### 56 Annual statement of licensee (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. ##### 57 When annual statement to be lodged The statement referred to in section 56 shall be lodged by the person: (a) where the licence is a dealers licence—during the period within which a profit and loss account and balance sheet referred to in section 78 is required to be lodged with the Commission; (b) where the licence is an investment advisers licence—within the period of one month immediately before the anniversary of the date on which the licence was granted. ##### 58 Commission may extend period for lodging statement (1) The Commission may, in its discretion, extend, or further extend, the period for lodging a statement under section 56. (2) An application for an extension under subsection (1) may be made, and the power of the Commission under that subsection may be exercised, notwithstanding that the period referred to in that subsection has expired. ### Division 2—Agreements with unlicensed persons ##### 59A Certain persons not clients 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. ##### 59B Agreements with unlicensed persons 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. ##### 59C Client may give notice of rescission (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. ##### 59D Effect of notice under section 59C 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. ##### 59E Client may apply to Court for partial rescission (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. ##### 59F Court may make consequential orders (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. ##### 59G Agreement unenforceable against client (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; 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. ##### 59H Non‑licensee not entitled to recover commission (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; but does not otherwise apply. (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. ##### 59J Onus of establishing non‑application of section 59G or 59H 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. ##### 59K Client may recover commission paid to non‑licensee (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. ##### 59L Remedies under this Division additional to other remedies 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 ##### 60A Representatives of dealers 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. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 60B Representatives of investment advisers 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. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 60C Defence 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. ##### 60D Body corporate not to act as representative A body corporate shall not do an act as a representative of a dealer or of an investment adviser. Penalty: $5,000 or imprisonment for 1 year, or both. ##### 60E Licensee to keep register of holders of proper authorities (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 (ii) remove from the last‑mentioned part; 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 (ii) remove from the last‑mentioned part; 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. ##### 60F Licensee to notify Commission of location and contents of register (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. ##### 60G Inspection and copying of register (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. ##### 60H Disclosure to client by representative 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. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 60J Commission may require production of authority (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. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 60K Commission may give licensee information about representative (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: > licensee includes a recognised licensee. Penalty: $5,000 or imprisonment for 1 year, or both. ##### 60L Holder of authority may be required to return it (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). (4) In this section: > licensee includes a recognised licensee. ### Division 4—Liability of principals for representatives’ conduct ##### 61A Conduct engaged in as a representative 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. ##### 61B Liability where identity of principal unknown (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. ##### 61C Liability of principals where act done in reliance on representative’s conduct (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. (2) If: (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 Presumptions about certain matters (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 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. ##### 61E No contracting out of liability for representative’s conduct (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): > licensee includes a recognised licensee. (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 Effect of Division (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 ##### 62A Power to revoke, without a hearing, licence held by natural person 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. ##### 62B Power to revoke, without a hearing, licence held by body corporate 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. ##### 62C Power to revoke licence after a hearing (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. ##### 62D Power to suspend licence instead of revoking it (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 62(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. Penalty: $2,500 or imprisonment for 6 months, or both. (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. ##### 62E Power to make banning order where licence revoked or suspended 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. ##### 62F Power to make banning order against unlicensed person 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: (i) a representative of a dealer; or (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: (i) a representative of a dealer; or (ii) a representative of an investment adviser. ##### 62G Nature of banning order (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; whichever the order specifies. (2) The Commission shall not vary or revoke a banning order except under section 62H, 62J or 62K. ##### 62H Exceptions to banning order (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. ##### 62J Variation or revocation of banning order on application (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. (2) If: (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: (i) a representative of a dealer; or (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. (3) Otherwise, the Commission shall refuse the application. (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 (b) in connection with performing or exercising any other function or power under this Part. ##### 62K Revocation of banning order in certain cases 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. ##### 62L Effect and publication of orders under this Division (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. (3) Where: (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. ##### 62M Contravention of banning order A person shall not contravene a banning order or recognised banning order relating to the person. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 62N Banned person ineligible for licence 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. ##### 62P Opportunity for hearing (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. ##### 62Q Disqualification by the Court (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; whichever the order specifies; (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; whichever the order specifies; (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. ##### 62R Effect of order under section 62Q or corresponding law (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; whichever the order specifies. Penalty: $2,500 or imprisonment for 6 months, or both. (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. ##### 62S Effect of order under previous Territory law corresponding with section 62Q (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. ## Part V—Conduct of securities business ### Division 1—General ##### 63 Certain representation prohibited (1) A person who is the holder of a licence shall not represent or imply, or knowlingly permit to be represented or implied, in any manner to a person that the abilities or qualifications of the holder of the licence have in any respect been approved by the Commission. (2) A statement that a person is the holder of a licence is not a contravention of this section. ##### 64 Issue of contract notes (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. (1) A dealer shall, in respect of a transaction of sale or purchase of securities, forthwith give a contract note that complies with subsection (2) to: (a) where the transaction took place in the ordinary course of business at a stock market and the dealer entered into the transaction otherwise than as principal—the person for whom the dealer entered into the transaction; (b) where the transaction did not take place in the ordinary course of business at a stock market and the dealer entered into the transaction otherwise than as principal—the person for whom the dealer entered into the transaction and the person with whom the dealer entered into the transaction; and (c) where the transaction did not take place in the ordinary course of business at a stock market and the dealer entered into the transaction as principal—the person with whom the dealer entered into the transaction. (2) A contract note given by a dealer under subsection (1) shall include: (a) the name or style under which the dealer carries on his business as a dealer and the address of the principal place at which he so carries on business; (b) where the dealer is dealing as principal with a person who is not the holder of a dealers licence, a statement that he is so acting; (c) the name of the person to whom the dealer gives the contract note; (d) the day on which the transaction took place and, if the transaction did not take place in the ordinary course of business at a stock market, a statement to that effect; (e) the number, or amount and description, of the securities that are the subject of the contract; (f) the price per unit of the securities; (g) the amount of the consideration; (h) a statement: (i) where he is a member of a securities exchange, or of a securities exchange within the meaning of the corresponding law of a participating State or of a participating Territory—specifying that securities exchange or each of those securities exchanges; and (ii) specifying the amount of commission charged and the rate (if any) at which the commission was charged; (j) the amounts of all stamp duties or other duties and taxes payable in connection with the contract; and (k) if an amount is to be added to or deducted from the settlement amount in respect of the right to a benefit purchased or sold together with the securities, the first‑mentioned amount and the nature of the benefit. (3) A dealer shall not include in a contract note given under subsection (1), as the name of the person with or for whom he has entered into the transaction, a name that he knows, or could reasonably be expected to know, is not the name by which that person is ordinarily known. (4) 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. (5) For the purposes of this section: (a) a dealer who is a member of a securities exchange or is a member of a body corporate that is a securities exchange for the purposes of the corresponding law of a State or of another Territory shall not be taken to have entered into a transaction as principal by reason only that the transaction was entered into with another dealer who is a member of a securities exchange or is a member of a body corporate that is a securities exchange for the purposes of such a corresponding law; and (b) a transaction takes place in the ordinary course of business at a stock market if it takes place in prescribed circumstances or is a transaction that is a prescribed transaction for the purposes of this section. (6) Notwithstanding the provisions of section 6, a person is not associated with another person for the purposes of this section by reason only that he is: (a) a partner of the other person otherwise than by reason that he carries on a business of dealing in securities in partnership with the other person; or (b) a director of a body corporate of which the other person is also a director, whether or not the body corporate carries on a business of dealing in securities. ##### 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. ##### 67 Use by dealer of clients’ moneys Where a person (in this section referred to as the client) lends moneys to a dealer, the dealer shall: (a) deposit the moneys in an account in a bank, being an account that does not contain any moneys other than moneys lent to the dealer, not later than the next day after the moneys are received by the dealer on which the bank is open for business; (b) furnish to the client a document, in the prescribed form, setting out the terms and conditions on which the loan is made and accepted (including the purpose for which and the manner in which the moneys are to be used by the dealer); (c) retain the moneys in the bank account referred to in paragraph (a) until the client has given to him a written statement acknowledging that the client has received the document referred to in paragraph (b); and (d) use the moneys only: (i) for the purpose and in the manner set out in the document referred to in paragraph (b); or (ii) for another purpose or in another manner agreed to by the client in writing after the document referred to in paragraph (b) was furnished to the client. Penalty: $2,500 or imprisonment for 6 months, or both. ### Division 2—Short selling of securities ##### 68 Short selling (1) Subject to this section and the regulations, a person shall not sell securities to a purchaser unless, at the time when he sells them: (a) he has or, where he is selling as agent, his principal has; or (b) he believes on reasonable grounds that he has, or where he is selling as agent, his principal has; a presently exercisable and unconditional right to vest the securities in the purchaser. Penalty: For a first offence, $2,500 or imprisonment for 6 months, or both; for a second or subsequent offence, $10,000 or imprisonment for 2 years, or both. (2) For the purposes of subsection (1): (a) a person who, at a particular time, has a presently exercisable and unconditional right to have securities vested in him or in accordance with his directions shall be deemed to have at that time a presently exercisable and unconditional right to vest the securities in another person; and (b) a right of a person to vest securities in another person shall not be deemed not to be unconditional by reason only of the fact that the securities are charged or pledged in favour of another person to secure the repayment of money. (3) Subsection (1) does not apply in relation to: (a) a sale of securities by the holder of a dealers licence or a recognized dealer who is a member of a securities exchange and specializes in transactions relating to odd lots of securities, being a sale made by him as principal solely for the purpose of: (i) accepting an offer to purchase an odd lot of securities; or (ii) disposing of a parcel of securities that is less than one marketable parcel of securities by means of the sale of one marketable parcel of those securities; (b) a sale of securities as part of an arbitrage transaction; (c) a sale of securities by a person who before the time of sale has entered into a contract to purchase those securities and who has a right to have those securities vested in him that is conditional only upon all or any of the following: (i) payment of the consideration in respect of the purchase; (ii) the receipt by him of a proper instrument of transfer in respect of the securities; (iii) the receipt by him of the documents that are, or are documents of title to, the securities; (d) a sale of securities where: (i) the person who sold the securities is not associated with the body corporate that issued or made available the securities; (ii) arrangements are made before the time of the sale that will enable delivery of securities of the class sold to be made to the purchaser within 3 business days after the date of the transaction effecting the sale; and (iii) if the sale is effected on the stock market of a securities exchange: (A) the price per unit in respect of the sale is not below the price at which the immediately preceding ordinary sale was effected; and (B) the price per unit is above the price at which the immediately preceding ordinary sale was effected unless the price at which the immediately preceding ordinary sale was effected was higher than the next preceding different price at which an ordinary sale had been effected; and the securities exchange is immediately informed that the sale has been made short in accordance with this subparagraph; or (e) a sale of securities where: (i) the securities are included in a class of securities, being a class in relation to which there is in force a declaration, made by the committee of a securities exchange as provided by the business rules of the securities exchange, to the effect that the class is a class of securities to which this paragraph applies; (ii) the sale is effected as provided by the business rules of the securities exchange; and (iii) at the time of the sale, neither the person who sold the securities, nor any person on behalf of whom the first‑mentioned person sold the securities, was associated, in relation to the sale, with the body corporate that issued or made available the securities. (4) A person who requests a holder of a dealers licence or a recognized dealer to effect a sale of securities to which subsection (1) would apply but for paragraph (3)(b), (d) or (e) shall, at the time of making the request, inform the holder of the licence or recognized dealer that the sale is a short sale. (5) A person who, on a stock market of a securities exchange, effects, whether as principal or agent, a sale of securities to which subsection (1) would apply but for paragraph (3)(d) shall cause to be endorsed on any document evidencing the sale that is given to the person who, whether as principal or agent, purchases the securities a statement that the sale was a short sale. (6) For the purposes of this section, if a person: (a) purports to sell securities; (b) offers to sell securities; (c) holds himself out as entitled to sell securities; or (d) instructs a dealer to sell securities; he shall be deemed to sell the securities. ##### 68A Power of Commission to prohibit short selling in certain cases (1) Where the Commission forms the opinion that it is necessary to prohibit securities, or securities included in a particular class of securities, from being sold on a stock market of a securities exchange in a manner that, but for paragraph 68(3)(e), would contravene subsection 68(1), in order to protect persons who might sustain financial loss if they were to buy or sell those securities in that manner or in order to protect the public interest, the Commission may give notice in writing to the securities exchange stating that it has formed that opinion and setting out the reasons for the formation of that opinion. (2) If, after the receipt of such a notice: (a) the securities exchange does not take action to prevent the selling on a stock market of the securities exchange of securities, or of securities included in a class specified in the notice, as the case requires, in the manner referred to in subsection (1); and (b) the Commission is still of the opinion that it is necessary to prohibit the selling on that stock market of those securities in that manner; the Commission may, by a further notice in writing given to the securities exchange, prohibit the selling on that stock market of those securities in that manner during such period, not exceeding 21 days, as is specified in the further notice. (3) As soon as practicable after giving a notice to a securities exchange under subsection (2), the Commission shall furnish to the Ministerial Council a written report setting out the reasons for the giving of the notice and send a copy of the report to the securities exchange. (4) On receipt of a report furnished under subsection (3), the Ministerial Council may, if it thinks fit, direct the Commission to revoke the notice given under subsection (2), and, if such a direction is given, the Commission shall forthwith revoke the notice. (5) A securities exchange shall not permit the selling of securities on a stock market of the securities exchange in a manner that contravenes a notice given under subsection (2). Penalty: $1,000 for each day on which the securities exchange contravenes this subsection. ### Division 3—Recommendations about securities ##### 68B Recommendation made by partner or officer 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. ##### 68C Client to be told if adviser’s interests may influence recommendation (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 a 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. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 68D Defences to alleged breach of subsection 68C(2) (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. ##### 68E Adviser must have reasonable basis for recommendation (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. ##### 68F Adviser who breaches this Division liable to compensate client (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. ##### 68G Qualified privilege for adviser when complying with this Division 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. ## Part VI—Accounts and audit ##### 69 Interpretation In this Part, unless the contrary intention appears, a reference to a book, security, trust account or business of or in relation to a dealer who carries on business in partnership shall be read as a reference to such a book, security, trust account or business of or in relation to the partnership. ##### 70 Application of Part (1) This Part applies to and in relation to the holder of a dealers licence, and to the business of dealing in securities carried on by the holder of a dealers licence, whether in the Territory or elsewhere, but does not apply to or in relation to a recognized dealer or to the business carried on by a recognized dealer. (2) This Part does not affect, and shall be deemed never to have affected, the operation of Part VI of the Companies Act 1981 in relation to a company within the meaning of that Act that is the holder of a dealers licence or in relation to a business of dealing in securities that is carried on by such a company. ##### 71 Accounts to be kept by dealers (1) A dealer shall: (a) keep such accounting records as correctly record and explain the transactions and financial position of the business of dealing in securities carried on by him; (b) keep his accounting records in such a manner as will enable true and fair profit and loss accounts and balance sheets to be prepared from time to time; and (c) keep his accounting records in such a manner as will enable profit and loss accounts and balance sheets of the business of dealing in securities carried on by him to be conveniently and properly audited. Penalty: $2,500 or imprisonment for 6 months, or both. (2) A dealer shall be deemed not to have complied with subsection (1) in relation to records unless those records: (a) are kept in writing in the English language or in such a manner as will enable them to be readily accessible and readily converted into writing in the English language; (b) are kept in sufficient detail to show particulars of: (i) all moneys received or paid by the dealer, including moneys paid to, or disbursed from, a trust account; (ii) all purchases and sales of securities made by the dealer, the charges and credits arising from them, and the names of the buyer and seller, respectively, of each of those securities; (iii) all income received from commissions, interest, and other sources, and all expenses, commissions, and interest paid, by the dealer; (iv) all the assets and liabilities (including contingent liabilities) of the dealer; (v) all securities that are the property of the dealer, showing by whom the securities, or the documents of title to the securities, are held and, where they are held by some other person, whether or not they are held as security against loans or advances; (vi) all securities that are not the property of the dealer and for which the dealer or any nominee controlled by the dealer is accountable, showing by whom, and for whom, the securities or the documents of title to the securities are held and the extent to which they are either held for safe custody or deposited with a third party as security for loans or advances made to the dealer; (vii) all purchases and sales of options made by the dealer and all fees (being option moneys) arising from them; (viii) all arbitrage transactions entered into by the dealer; and (ix) all underwriting transactions entered into by the dealer; (c) are kept in sufficient detail to show separately particulars of every transaction by the dealer; (d) specify the day on which or the period during which each transaction by the dealer took place; and (e) contain copies of acknowledgments of the receipt of securities or of documents of title to securities received by the dealer from clients for sale or safe custody clearly showing the name or names in which the particular securities are registered. (3) Without affecting the operation of subsection (2), a dealer shall keep records in sufficient detail to show separately particulars of all transactions by the dealer with, or for the account of: (a) clients of the dealer, excluding, where the dealer carries on business in partnership, the partners of the firm; (b) the dealer himself, or, where the dealer carries on business in partnership, the partners of the firm; (c) other dealers carrying on business in the Territory; (d) dealers outside the Territory; and (e) employees of the dealer. (4) An entry in the accounting and other records of a dealer required to be kept in accordance with this section, and any matter recorded by a securities exchange in relation to a member pursuant to subsection 136(3), shall be deemed to have been made by, or with the authority of, the dealer or member. (5) Where a record required by this section to be kept is not kept in writing in the English language, the dealer shall, if required to convert the record into writing in the English language by a person who is entitled to examine the record, comply with the requirement within a reasonable time. (6) Notwithstanding any other provision of this section, a dealer shall not be deemed to have failed to keep a record referred to in subsection (1) by reason only that the record is kept as a part of, or in conjunction with, the records relating to any business other than dealing in securities that is carried on by him. (7) If accounting or other records are kept by a dealer at a place outside the Territory, the dealer shall cause to be sent to and kept at a place in the Territory such particulars with respect to the business dealt with in those records as will enable true and fair profit and loss accounts and balance sheets to be prepared. ##### 72 Security documents in custody of dealer (1) Where a dealer receives for safe custody documents that are, or are documents of title to, securities, being documents that are the property of another person (in this subsection referred to as the client) and for which the dealer or a nominee controlled by the dealer is accountable, the dealer shall forthwith: (a) if the documents are not registered in the name of the client by the body corporate by which the securities were issued or made available and the client does not make a request as mentioned in paragraph (b) or (c)—cause them to be so registered; (b) if the client requests that the documents be registered by the body corporate by which the securities were issued or made available in the name of a nominee controlled by the dealer—cause them to be so registered; or (c) if the client requests that the documents be deposited in safe custody with the dealer’s bankers—cause them to be so deposited. (2) A dealer shall not deposit as security for a loan or advance made to the dealer documents that are, or are documents of title to, securities, being documents that are the property of another person (in this subsection referred to as the client) and for which the dealer or a nominee controlled by the dealer is accountable, unless an amount is owed to the dealer by the client in connection with a transaction entered into on behalf of the client, and the dealer: (a) gives a written notice to the client identifying the documents and stating that he intends to deposit them as security for a loan or advance made to the dealer; and (b) deposits the documents as security for a loan or advance made to the dealer that does not exceed the amount owed to the dealer on the day of the deposit by the client in connection with a transaction entered into on his behalf by the dealer. (3) Where: (a) a dealer has given a notice to a person as mentioned in subsection (2) and has deposited the documents referred to in the notice as security for a loan or advance; and (b) the person has paid the amount owed by him to the dealer, the dealer shall withdraw the documents from deposit forthwith after he receives the amount so owed to him. (4) Where a dealer deposits as security for a loan or advance made to the dealer documents that are, or are documents of title to, securities, being documents that are the property of another person and for which the dealer or a nominee controlled by the dealer is accountable, the dealer shall, at the expiration of 3 months after the day on which the documents are deposited, and at the expiration of each subsequent period of 3 months, if the documents are still maintained on deposit, send to the other person written notice to that effect. Penalty: $10,000 or imprisonment for 2 years, or both. ##### 73 Dealers’ trust accounts (1) A dealer shall open and maintain with a bank or banks in the Territory an account or accounts designated as a trust account or as trust accounts. (2) A dealer shall pay into such an account all moneys held by him in trust for a client not later than the next day on which the bank is open for business following the day on which they are received by the dealer. (3) Notwithstanding subsection (1), where moneys that are required by this section to be paid into a trust account are received by a dealer in a place outside the Territory, the dealer may pay those moneys into a trust account maintained by the dealer in that place. (4) For the purposes of subsections (2) and (8), all moneys received by a dealer from a client other than: (a) moneys received in respect of brokerage and other proper charges; (b) moneys received in payment or part payment for securities delivered to the dealer before the moneys are received; or (c) moneys to which section 67 applies; shall be deemed to be held in trust for that client. (5) Subsection (2) does not apply to or in relation to a cheque, bank cheque, bank draft, money order or postal order made payable to or to the order of a specified person or bearer (not being a cheque, bank cheque, bank draft, money order or postal order in which the payee is the dealer, a partner of the dealer or the firm in which the dealer is a partner) received from or on behalf of a client with instructions, express or implied, that the cheque, bank cheque, bank draft, money order or postal order is to be delivered to the person to whom it is payable. (6) A person who contravenes or fails to comply with a provision of this section that is applicable to him is guilty of an offence. Penalty: $5,000 or imprisonment for 1 year, or both. (7) A person who, with intent to defraud, contravenes or fails to comply with a provision of this section that is applicable to him is guilty of an offence. Penalty: $10,000 or imprisonment for 2 years, or both. (8) Where a dealer is prohibited, by virtue of a condition or restriction to which a licence granted to him under this Act is subject, from holding moneys in trust for the dealer’s clients, this section does not apply in relation to the dealer unless and until the dealer holds moneys in trust for a client. ##### 74 Purposes for which money may be withdrawn from a trust account (1) A dealer who withdraws moneys from a trust account except for the purpose of: (a) making a payment to, or in accordance with the written directions of, a person entitled to the moneys; (b) making a payment to a stock exchange in accordance with the provisions of section 95; (c) defraying brokerage and other proper charges; (d) paying to the dealer moneys to which he is entitled, being moneys that were paid into a trust account but were not required to be so paid; or (e) making a payment that is otherwise authorized by law, is guilty of an offence. Penalty: $5,000 or imprisonment for 1 year, or both. (2) A dealer who, with intent to defraud, withdraws moneys from a trust account is guilty of an offence. Penalty: $10,000 or imprisonment for 2 years, or both. (3) Except as otherwise provided in this Part, moneys held in a trust account are not available for payment of the debts of a dealer or liable to be paid or taken in execution under the order or process of a court. (4) Nothing in this Part takes away or affects a lawful claim or lien that a person has against or on any moneys held in a trust account or against or on any moneys received for the purchase of securities or from the sale of securities before those moneys are paid into a trust account. (5) A dealer is not guilty of an offence against subsection (1) by reason only that he withdraws from a trust account an amount that is the whole or any part or the amount of a cheque that has been paid into the account but that has not been paid, and has not been refused payment, by the banker on which it is drawn. (6) Where a dealer withdraws from a trust account an amount that is the whole or any part of the amount of a cheque that has been paid into the account but that has not been paid by the banker on which it is drawn and the banker later refuses payment of the cheque, the dealer shall forthwith pay into the trust account by cash or bank cheque an amount equal to the first‑mentioned amount. (7) Where a dealer fails to comply with subsection (6): (a) he is guilty of an offence; and (b) where the dealer is a member of a stock exchange the failure shall, for the purposes of Part IX, be deemed to be a defalcation by the dealer. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 75 Appointment of auditor by dealer (1) Within one month after a person becomes the holder of a dealers licence he shall appoint a person or persons, a firm or firms, or a person or persons and a firm or firms, as auditor or auditors to audit his accounts. (2) Subject to this section, a person shall not: (a) consent to be appointed as auditor of a dealer; (b) act as auditor of a dealer; or (c) prepare a report required by this Act to be prepared by an auditor of a dealer; if: (d) the person is not a registered company auditor; (e) the person, or a body corporate in which the person is a substantial shareholder for the purposes of Division 4 of Part IV of the Companies Act 1981 or the provisions of the law of a participating State or a participating Territory that correspond with that Division, is indebted in an amount exceeding $5,000 to the dealer or, if the dealer is a body corporate, to a related body corporate; or (f) the person is: (i) in the case of a dealer who is a natural person—a partner or employee of the dealer; or (ii) in the case of a dealer that is a body corporate: (A) an officer of the body corporate; (B) a partner, employer or employee of an officer of the body corporate; or (C) a partner or employee of an employee of an officer of the body corporate. (3) Subject to this section, a firm shall not: (a) consent to be appointed as auditor of a dealer; (b) act as auditor of a dealer; or (c) prepare a report required by this Act to be prepared by an auditor of a dealer; unless: (d) at least one member of the firm is a registered company auditor who is ordinarily resident in a State or Territory; (e) where the business name under which the firm is carrying on business is not registered under the Business Names Ordinance 1963—there has been lodged with the Commission a return in the prescribed form showing, in relation to each member of the firm, his full name and his address as at the time when the firm so consents, acts or prepares a report; (f) no member of the firm, and no body corporate in which any member of the firm is a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act 1981, or the provisions of the law of a participating State or of a participating Territory that correspond with that Division, is indebted in an amount exceeding $5,000 to the dealer or, where the dealer is a body corporate, to a related body corporate; (g) no member of the firm is: (i) in the case of a dealer who is a natural person—a partner or employee of the dealer; or (ii) in the case of a dealer that is a body corporate: (A) an officer of the body corporate; (B) a partner, employer or employee of an officer of the body corporate; or (C) a partner or employee of an employee of an officer of the body corporate; and (h) in the case of a dealer that is a body corporate, no officer of the body corporate receives any remuneration from the firm for acting as a consultant to it on accounting or auditing matters. (4) A reference in subsection (2) or (3) to indebtedness to a body corporate does not, in relation to indebtedness of a natural person, include a reference to indebtedness of that person to a body corporate that is a prescribed corporation for the purposes of Division 4 of Part VI of the Companies Act 1981 where: (a) the indebtedness arose as a result of a loan made to that person by the body corporate in the ordinary course of its ordinary business; and (b) the amount of that loan was used by that person to pay the whole or part of the purchase price of premises that are used by that person as his principal place of residence. (5) For the purposes of subsections (2) and (3), a person shall be deemed to be an officer of a body corporate if: (a) he is an officer of a related body corporate; or (b) except where the Commission, if it thinks fit in the circumstances of the case, directs that this paragraph shall not apply in relation to him—he has, at any time within the immediately preceding period of 12 months, been an officer or promoter of the body corporate or of a related body corporate. (6) For the purposes of this section, a person shall not be taken to be an officer of a body corporate by reason only of his being or having been the liquidator of that body corporate or of a related body corporate. (7) For the purposes of this section, a person shall not be taken to be an officer of a body corporate by reason only of his having been appointed as auditor of that body corporate or of a related body corporate or, for any purpose relating to taxation, a public officer of a body corporate or by reason only of his being or having been authorized to accept on behalf of the body corporate or a related body corporate service of process or any notices required to be served on the body corporate or related body corporate. (8) The appointment of a firm as auditor of a dealer shall be deemed to be an appointment of all persons who are members of the firm and are registered company auditors, whether resident in a State or Territory or not, at the date of the appointment. (9) Where a firm that has been appointed as auditor of a dealer is reconstituted by reason of the death, retirement or withdrawal of a member or members or by reason of the admission of a new member or new members, or both: (a) a person who was deemed under subsection (8) to be an auditor of the dealer and who has so retired or withdrawn from the firm as previously constituted shall be deemed to have resigned as auditor of the company as from the day of his retirement or withdrawal but, unless that person was the only member of the firm who was a registered company auditor and, after the retirement or withdrawal of that person, there is no member of the firm who is a registered company auditor, section 76 does not apply to that resignation; (b) a person who is a registered company auditor and who is so admitted to the firm shall be deemed to have been appointed as an auditor of the dealer as from the date of his admission; and (c) the reconstitution of the firm does not affect the appointment of the continuing members of the firm who are registered company auditors as auditors of the dealer; but nothing is this subsection affects the operation of subsection (3). (10) Except as provided by subsection (9), the appointment of the members of a firm as auditors of a dealer that is deemed by subsection (8) to have been made by reason of the appointment of the firm as auditor of the dealer is not affected by the dissolution of the firm. (11) A report or notice that purports to be made or given by a firm appointed as auditor of a dealer shall not be taken to be duly made or given unless it is signed in the firm name and in his own name by a member of the firm who is a registered company auditor. (12) Where a person or firm is appointed as an auditor under subsection (1) (not being an appointment that is deemed to be made by virtue of subsection (9)) or under subsection (16), the dealer shall within 14 days after the appointment lodge with the Commission a notice in writing stating that he has made the appointment and specifying the name of the person or firm. (13) Without limiting the generality of section 141, if, in contravention of this section, a firm consents to be appointed, or acts as, an auditor of a dealer or prepares a report required by this Act to be prepared by an auditor of a dealer, each member of the firm is guilty of an offence. (14) A person shall not: (a) if he has been appointed auditor of a dealer—knowingly disqualify himself while the appointment continues from acting as auditor of the dealer; or (b) if he is a member of a firm that has been appointed auditor of a dealer—knowingly disqualify the firm while the appointment continues from acting as auditor of the dealer. (15) An auditor of a dealer holds office until death, until removal or resignation from office in accordance with section 76 or until becoming prohibited from acting as auditor by reason of subsection (2) or (3). (16) Within 14 days after a vacancy occurs in the office of an auditor of a dealer, if there is no surviving or continuing auditor of the dealer, the dealer shall appoint a person or persons, a firm or firms or a person or persons and a firm or firms to fill the vacancy. (17) While a vacancy in the office of an auditor continues, the surviving or continuing auditor or auditors (if any) may act. (18) A dealer shall not appoint a person or firm as auditor of the dealer unless that person or firm has, before the appointment, consented by notice in writing given to the dealer to act as auditor and has not withdrawn his or its consent by notice in writing given to the dealer. (19) This section does not apply in relation to a body corporate (other than an exempt proprietary company) in relation to which section 280 of the Companies Act 1981 or the corresponding provision of a law of a participating State or of a participating Territory applies. (20) In subsection (19), exempt proprietary company means a body corporate that is an exempt proprietary company within the meaning of the Companies Act 1981 or the corresponding law of a participating State or of a participating Territory. ##### 76 Removal and resignation of auditors (1) A dealer may, if he has received the consent of the Commission, remove an auditor of the dealer from office. (2) An auditor of a dealer may, by notice in writing given to the dealer, resign as auditor of the dealer if: (a) he has, by notice in writing given to the Commission, applied for consent to his resignation and, at or about the same time as he gave notice to the Commission, notified the dealer in writing of his application to the Commission; and (b) he has received the consent of the Commission. (3) The Commission shall, as soon as practicable after receiving a notice from an auditor under subsection (2), notify the auditor and the dealer whether it consents to the resignation of the auditor. (4) A statement made by an auditor in an application to the Commission under subsection (2) or in answer to an inquiry by the Commission relating to the reasons for the application: (a) is not admissible in evidence in any civil or criminal proceedings against the auditor other than proceedings for an offence against section 135; and (b) may not be made the ground of a prosecution (other than a prosecution for an offence against section 135), action or suit against the auditor; and a certificate by the Commission that the statement was made in the application or in answer to an inquiry by the Commission is conclusive evidence that the statement was so made. (5) Subject to subsection (6) and to any order of the Court under subsection (8), the resignation of an auditor takes effect: (a) on the date (if any) specified for the purpose in the notice of resignation; (b) on the date on which the Commission gives its consent to the resignation; or (c) on the date (if any) fixed by the Commission for the purpose; whichever last occurs. (6) Where, on the retirement or withdrawal from a firm of a member, the firm will no longer be capable, by reason of the provisions of paragraph 75(3)(d), of acting as auditor of a dealer, the member so retiring or withdrawing shall, if not disqualified from acting as auditor of the dealer, be deemed to be the auditor of the dealer until he obtains the consent of the Commission to his retirement or withdrawal. (8) A person aggrieved by the refusal of consent by the Commission to the removal or resignation of an auditor of a dealer may, within one month after the date of refusal, appeal to the Court from the refusal and thereupon the Court may confirm or reverse the refusal and may make such further order in the matter as to it seems proper. (9) This section does not apply in relation to a body corporate (other than an exempt proprietary company) in relation to which section 282 of the Companies Act 1981, or a provision of a law of a participating State or participating Territory that corresponds with that section, applies. (10) In subsection (9), exempt proprietary company means a body corporate that is an exempt proprietary company within the meaning of the Companies Act 1981 or of the provisions of a law of a participating State or participating Territory that correspond with that Act. ##### 77 Fees and expenses of auditors The reasonable fees and expenses of an auditor of a dealer are payable by the dealer. ##### 78 Dealers’ accounts (1) In this section: > financial year, in relation to a dealer, means: (a) where the dealer is not a body corporate—the year ending on 30 June; and (b) where the dealer is a body corporate—the financial year of the body corporate within the meaning of the Companies Act 1981. > prescribed day, in relation to a financial year of a dealer, means: (a) where the dealer is not a body corporate—the day that is 2 months after the end of that financial year; or (b) where the dealer is a body corporate—the day that is 3 months after the end of that financial year; or where, in either case, an extension of time is approved pursuant to subsection (3), the day on which the extended time expires. (2) A dealer shall, in respect of each financial year, other than a financial year that ended before the date of commencement of the Companies Act 1981 or ended on or after that date but before the date on which the dealer commenced to carry on business as a dealer, prepare a true and fair profit and loss account and balance sheet on the basis of such accounting principles (if any) and containing such information and matters as are prescribed and lodge them with the Commission before the prescribed day for that financial year, together with an auditor’s report containing the prescribed information and matters. (3) The Commission may, on application made by a dealer and his auditor before the expiration of the period of 2 months or, as the case requires, the period of 3 months referred to in the definition of prescribed day in subsection (1) or, if that period has been extended pursuant to an approval or approvals previously given under this subsection, before the expiration of the period as so extended, approve an extension or further extension of the period, and such an approval may be given subject to such conditions (if any) as the Commission imposes. (4) Where an approval under subsection (3) in relation to a dealer is given subject to conditions, the dealer shall comply with those conditions. ##### 79 Auditor to report to Commission in certain cases (1) Where an auditor, in the performance of his duties as auditor of a dealer, becomes aware of a prescribed matter he shall, within 7 days after becoming aware of that matter, lodge with the Commission a written report on the matter and send a copy of the report to the dealer and to each securities exchange of which the dealer is a member. (2) In this section, prescribed matter means a matter that, in the opinion of the auditor: (a) has adversely affected, is adversely affecting or may adversely affect the ability of the dealer to meet his obligations as a dealer; (b) constitutes or may constitute a breach of section 71, 72, 73 or 74 or Part VIII; or (c) constitutes or may constitute a breach of a condition of a licence issued to the dealer under this Act. ##### 80 Certain matters to be reported to Commission (1) Where, in relation to a dealer who is a member of a securities exchange, the securities exchange becomes aware of a prescribed matter, the securities exchange shall, as soon as practicable after becoming aware of the matter, lodge with the Commission a written report on the matter and send a copy of the report to the dealer. (2) In this section, prescribed matter, in relation to a dealer, means a matter that, in the opinion of the securities exchange concerned: (a) has adversely affected, is adversely affecting or may adversely affect the ability of the dealer to meet his obligations as a dealer; (b) constitutes or may constitute a breach of section 71, 72, 73 or 74 or, except in a case where the securities exchange concerned is not a stock exchange, Part VIII; or (c) constitutes or may constitute a breach of a condition of a licence issued to the dealer under this Act. ##### 81 Defamation (1) An auditor is not, in the absence of malice on his part, liable to any action for defamation at the suit of any person in respect of: (a) any statement that he makes, orally or in writing, in the course of his duties as auditor; or (b) the lodging of any report with the Commission, or the sending of any report to a dealer or to a securities exchange under section 79. (2) A person is not, in the absence of malice on his part, liable to any action for defamation at the suit of any person: (a) in respect of the publishing of any document prepared by an auditor in the course of his duties or required by or under this Act or under the corresponding law of a participating State or of a participating Territory to be lodged with the Commission, whether or not the document has been so lodged; or (b) in respect of the publishing of any statement made by an auditor as mentioned in subsection (1). (3) This section does not limit or affect any right, privilege or immunity that an auditor or other person has, apart from this section, as defendant in an action for defamation. ##### 82 Right of securities exchange to impose obligations etc. on members not affected by this Part Nothing in this Part prevents a securities exchange imposing on members of that securities exchange any obligations or requirements (not being obligations or requirements inconsistent with this Act) that the securities exchange thinks fit with respect to: (a) the audit of accounts (including the audit of accounts by an auditor appointed by the securities exchange); (b) the information to be furnished in reports from auditors; or (c) the keeping of books. ##### 83 Power of Court to restrain dealings with dealer’s bank accounts (1) Where the Court is satisfied, on application by the Commission: (a) that there are reasonable grounds for believing that there is a deficiency in a trust account, whether kept within or outside the Territory, of a person who is or has been a dealer or in an account kept pursuant to paragraph 67(a), whether within or outside the Territory, by a person who is or has been a dealer; (b) that there has been undue delay, or unreasonable refusal, on the part of a person who is or has been a dealer, in paying, applying or accounting for trust moneys as required by this Act or by the corresponding law of a State or of another Territory; (c) that a person who is or has been a dealer has not paid moneys into a trust account as provided by section 73 or into an account as provided by paragraph 67(a) or by a provision of the law of a State or of another Territory that corresponds with either of those sections; or (d) where a business of dealing in securities is carried on, was carried on or was last carried on, as the case may be, by a person otherwise than in partnership: (i) that the dealers licence of that person under Part IV or under the provisions of the law of a State or of another Territory that correspond with that Part has been revoked or suspended; (ii) that that person is incapable, by reason of physical or mental infirmity, of managing his affairs; (iii) that that person has ceased to carry on a business of dealing in securities; or (iv) that that person has died; the Court may make an order restraining dealings in respect of all or any of the bank accounts of that person, subject to such terms and conditions as the Court imposes. (2) Where an application is made to the Court for an order under subsection (1), the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application. (3) Where the Commission makes an application to the Court for the making of an order under subsection (1), the Court shall not require the Commission or any other person, as a condition of granting an interim order under subsection (2), to give any undertakings as to damages. ##### 84 Duty of banker to make full disclosure Where an order made under section 83 is directed to a banker, the banker shall: (a) disclose to the Commission every account kept at the bank in the name of the person to whom the order relates, and any account that the banker reasonably suspects is held or kept at the bank for the benefit of that person; and (b) permit the Commission to make a copy of, or to take an extract from, any account of the person to whom the order relates or any of the banker’s books relating to that person. ##### 85 Power of Court to make further orders and give directions Where an order is made under section 83, the Court may, on the application of the Commission or of a person affected by the order, make further orders: (a) dealing with such ancillary matters as the Court considers necessary or desirable; (b) directing that all or any of the moneys in an account affected by an order so made be paid by the bank to the Commission or a person nominated by the Commission, on such terms and conditions as the Court thinks fit; and (c) discharging or varying the order. ##### 86 Power of Court to make order relating to payment of moneys (1) An order made under section 85 may include directions to the person to whom the moneys are paid directing that that person: (a) shall cause the moneys to be paid into a separate trust account; (b) is authorized to prepare a scheme for distributing the moneys to persons who claim, during a period of 6 months after the Commission or that other person receives the moneys, to be entitled to the moneys and satisfy the Commission or that other person that they are so entitled; or (c) where the moneys received are insufficient to pay all proved claims, may, notwithstanding any rule of law or equity to the contrary, apportion the moneys among the claimants in proportion to their proved claims and show in the scheme how the moneys are so apportioned. (2) Where a person prepares a scheme for a distribution of moneys pursuant to subsection (1), he shall apply to the Court for approval of the scheme and for directions in respect of it. (3) The Court may give such directions as to the moneys held in a separate trust account pursuant to subsection (1), as to the persons to whom and in what amounts the whole or any portion of those moneys shall be paid, and as to the payment of the balance of the moneys (if any) remaining in the account, as the Court thinks fit. ## Part VII—Registers of interests in securities ##### 87 Interpretation (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. (4) If: (a) there is in force a certificate in writing issued by or on behalf of a securities exchange certifying that a member of that securities exchange is recognized by the securities exchange as specializing in transactions relating to odd lots of securities; and (b) the member concerned enters into a transaction in relation to an odd lot of securities; this Part does not apply in relation to any relevant interest in securities acquired by him as a result of that transaction or in relation to any change in his relevant interest in any securities effected by that transaction. ##### 88 Application of Part (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. ##### 89 Register to be maintained (1) A person to whom this Part applies shall maintain a Register, in accordance with the prescribed form or in the prescribed manner, for the purposes of this Part and shall keep the Register at a place in the Territory or in a participating State or participating Territory. (2) Where: (a) a person is at the commencement of this Act, or becomes after that commencement, a person to whom this Part applies; and (b) the person is aware at that commencement or when he becomes such a person, as the case may be, that he has a relevant interest in securities; he shall, within 7 days after the date of commencement of this Act or the day on which he becomes such a person, as the case may be, if he has not already done so, cause to be entered, as prescribed, in the Register particulars of those securities and of the nature of his relevant interest in those securities. (3) Where a person to whom this Part applies becomes aware that he has a relevant interest in securities he shall, within 7 days after the day on which he becomes so aware, cause to be entered, as prescribed, in the Register particulars of those securities and of the nature of his relevant interest in those securities. (4) Where there is a change in the relevant interest of a person to whom this Part applies in securities, he shall, within 7 days after the day on which he becomes aware of the change, cause particulars of the change to be entered in the Register. (5) For the purposes of this section, where a person to whom this Part applies commences or ceases to have a relevant interest in securities, there shall be deemed to be a change in the relevant interest of that person in those securities. (6) Where a person to whom this Part applies is required by this section to enter in the Register particulars of any securities and of the nature of his relevant interest in those securities, or particulars of a change in his relevant interest in any securities, the particulars to be so entered shall include: (a) the date on which he commenced or ceased to have the relevant interest or on which the change occurred; (b) the number of securities to which the relevant interest relates or related; (c) if the relevant interest was acquired or disposed of or the change occurred for valuable consideration—the amount of the consideration and, if the consideration did not consist wholly of money, the nature of the part of the consideration that did not consist of money; and (d) if the securities are not registered in the name of the first‑mentioned person—the name of the person who is registered as the holder of the securities or, if any other person is entitled to become registered as the holder of the securities, the name of that other person. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 90 Commission to be notified of certain matters on establishment of Register (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. ##### 90A Commission to be notified of changes in certain matters (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; as the case may be. (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. ##### 91 Defences (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. ##### 92 Power of Commission to require production of Register (1) The Commission may require a person to whom this Part applies to produce the Register required to be kept pursuant to section 89 for inspection by a person authorized by the Commission at such place within the Territory as the Commission specifies and within such period as the Commission specifies (being, in the case where the Register is kept at a place outside the Territory, a period of not less than 7 days), and the authorized person may make a copy of, or take extracts from, the Register. (2) A person to whom this Part applies shall comply with any requirement made of him under subsection (1). ##### 93 Power of Commission to require certain information (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). ##### 94 Power of Commission to supply copy of Register The Commission may supply a copy of a Register or an extract from a Register to any person who, in the opinion of the Commission, should in the public interest be informed of the matters disclosed in the Register or extract. ## Part VIII—Deposits with stock exchanges ##### 94A Interpretation In this Part, unless the contrary intention appears: (a) a reference to a stock exchange does not include a reference to an Exchange subsidiary; and (b) a reference to a trust account kept or maintained by a person or partnership includes a reference to a trust account kept or maintained by the person or partnership outside the Territory. ##### 95 Deposits to be lodged by member organisations (1) Subject to this section, a member organisation of a stock exchange shall, in accordance with this Part, lodge and maintain a deposit with: (a) unless paragraph (b) applies—the stock exchange; or (b) if the member organisation is a member organisation of each of 2 or more stock exchanges—the nominated stock exchange. (2) Where: (a) a person who, or a partnership that, is a member organisation of at least one stock exchange becomes a member organisation of another stock exchange; or (b) a person or partnership ceases to be a member organisation of a particular stock exchange but remains a member organisation of each of 2 or more other stock exchanges; the person or partnership shall forthwith inform in writing each stock exchange of which he, she or it is a member organisation of the name of the stock exchange of that kind with which he, she or it proposes to lodge and maintain a deposit under this Part. (3) In subsection (1), nominated stock exchange, in relation to a member organisation of a stock exchange, means the stock exchange named in notices given by the member organisation in accordance with subsection (2) or, if notices have been so given on 2 or more occasions, in the most recent notices so given. (4) A deposit under this Part is payable out of money in a trust account kept by the person or partnership lodging and maintaining the deposit. (5) An amount paid from a trust account as, or as part of, a deposit lodged with a stock exchange under this Part continues to be money in that trust account notwithstanding that it is so lodged. (6) Where a person or partnership contravenes subsection (1) or (2), the person, or each partner in the partnership, as the case may be, is guilty of an offence. Penalty: $5,000 or imprisonment for 1 year, or both. (7) It is a defence to a prosecution for a contravention of subsection (1) if it is established that the contravention was attributable to the making of a payment out of the trust account kept by the person or partnership concerned, being a payment that: (a) paragraph 74(1)(a), (c), (d) or (e) authorised the person or partnership to make out of that trust account; and (b) the person or partnership would not have been able to make if the person or partnership had complied with subsection (1). (8) A person or partnership is not required to comply with this section unless he, she or it carries on: (a) in the Territory; or (b) both in the Territory and outside it, whether within Australia or not; a business of dealing in securities, whether or not that business is part of, or is carried on in conjunction with, any other business. (9) A member organisation of a stock exchange is not required to comply with this section if, and for so long only as, the member organisation: (a) is a member organisation of a body corporate that is a stock exchange for the purposes of a corresponding law of a participating State or participating Territory; and (b) complies with the provisions of a law of that State or Territory that correspond with this Part. ##### 96 Deposit to be proportion of trust account balances (1) The deposit required to be lodged and maintained by a person or partnership under section 95 is an amount equal to two‑thirds (or, where a lesser proportion is prescribed, that proportion) of the lowest balance in the trust account maintained by the person or partnership during the period of 3 months ending on the quarter day last past. (2) Where a person or partnership maintains 2 or more trust accounts, the amount of the deposit required to be lodged and maintained by the person or partnership under section 95 shall be determined as if a reference in subsection (1) to the balance in the trust account at any time were a reference to the aggregate of the balances at that time in the trust accounts maintained by that person or partnership. (3) Nothing in this Part requires the lodging or maintaining of a deposit where, but for this subsection, the amount of the deposit would be less than $3,000. (4) Where, by reason of this Part, a person or partnership is required to increase an amount of money lodged with a stock exchange, the additional amount shall be lodged by that person or partnership not later than 5 trading days of that stock exchange after the relevant quarter day. (5) For the purposes of subsection (4): > relevant quarter day means the quarter day that is the last day of the period by reference to which the amount required to be lodged is calculated. > trading day, in relation to a stock exchange, means: (a) in the case of the Exchange—a day on which a stock market of an Exchange subsidiary; or (b) in any case—a day on which a stock market of the stock exchange; is open for trading in securities. ##### 97 Deposits to be invested by stock exchange (1) Where a stock exchange receives a deposit from a person or partnership under section 95, the stock exchange holds the deposit upon trust for the person or partnership and shall invest the deposit: (a) on interest‑bearing term deposit with a banking corporation; or (b) on deposit with a corporation in respect of which a declaration made under paragraph 97(7)(b) of the Companies Act 1981 is in force. (3) A participating exchange shall pay into the Fund money received by way of interest in respect of amounts invested by it under subsection (1). (3A) A stock exchange (other than a participating exchange) shall pay money received by way of interest in respect of amounts invested by it under subsection (1) into its fidelity fund. (4) A stock exchange shall, on demand being made by a person or partnership who has lodged a deposit with the stock exchange, pay to the person or partnership an amount deposited with the stock exchange under section 95. (5) Nothing in subsection (4) affects the obligations of a person or partnership under section 95. (6) A person or partnership shall pay an amount received from a stock exchange under subsection (4) into a trust account maintained by the person or partnership under section 73. (7) Where a person or partnership contravenes subsection (6), the person, or each partner in the partnership, as the case may be, is guilty of an offence. Penalty: $5,000 or imprisonment for 1 year, or both. (8) The Fund shall guarantee the repayment by a participating exchange of the amount of a deposit received by the participating exchange from a person or partnership. (9) The fidelity fund of a stock exchange (other than a participating exchange) shall guarantee the repayment by the stock exchange of the amount of a deposit received by the stock exchange from a person or partnership. (10) In this section, participating exchange means a stock exchange that is, for the purposes of Part IXA, a participating exchange. ##### 98 Accounts in respect of deposits (1) A stock exchange shall establish and keep proper accounts of deposits received by the stock exchange under: (a) in the case of the Exchange—this Part or the provisions of a law of a participating State or participating Territory that correspond with this Part; or (b) in any other case—this Part; and shall, within one month after each quarter day, cause a balance sheet to be made out as at that quarter day. (2) A stock exchange shall appoint a registered company auditor to audit its accounts relating to deposits. (3) An auditor appointed by a stock exchange shall audit the accounts relating to deposits received by the stock exchange and each balance sheet and shall cause a report on the accounts and balance sheet to be laid before the committee of the stock exchange not later than one month after the balance sheet is made out. (4) A stock exchange shall give to the Commission a copy of each report laid before the committee of the stock exchange under this section and of the balance sheet to which the report relates within 14 days after the report was so laid before the committee. ##### 99 Claims etc. not affected by this Part Nothing done under this Part affects: (a) a claim or lien that a member organisation of a stock exchange has on or in relation to a deposit; or (b) the rights or remedies of a person other than a member organisation of a stock exchange. ## Part IX—Fidelity funds ##### 99A Interpretation In this Part, participating exchange means a securities exchange: (a) in any case—that is, for the purposes of Part IXA, a participating exchange; or (b) if the Exchange is, for the purposes of Part IXA, a participating exchange—that is a local Exchange subsidiary. ##### 100 Establishment of fidelity fund (1) A securities exchange (other than the Exchange or a participating exchange) shall establish and keep a fidelity fund, which shall be administered by the committee on behalf of the securities exchange. (2) The assets of a fidelity fund of a securities exchange are the property of the securities exchange, but shall be kept separately from all other property and shall be held in trust for the purposes set out in this Part. ##### 101 Moneys constituting fidelity fund The fidelity fund of a securities exchange shall consist of: (a) an amount of not less than $100,000, to be paid to the credit of the fund by the securities exchange on the establishment of the fund; (b) moneys paid to the securities exchange by sole traders or member firms in accordance with the provisions of this Part; (c) the interest on moneys invested by the securities exchange under Part VIII; (d) the interest and profits from time to time accruing from the investment of the fidelity fund; (e) moneys paid into the fidelity fund by the securities exchange; (f) moneys recovered by or on behalf of the securities exchange in the exercise of a right of action conferred by this Part; (g) moneys paid by an insurer pursuant to a contract of insurance or indemnity entered into by the securities exchange under section 121; and (h) all other moneys lawfully paid into the fund. ##### 102 Fund to be kept in separate bank account The moneys in a fidelity fund shall, until they are invested or applied in accordance with this Part, be kept in a separate account in a bank in the Territory. ##### 103 Payments out of fund Subject to this Part, there shall be paid out of the fidelity fund of a securities exchange in such order as the committee of the securities exchange deems proper: (a) the amount of all claims, including costs, allowed by the committee or established against the securities exchange under this Part; (b) all legal and other expenses incurred in investigating or defending claims made under this Part or incurred in relation to the fund or in the exercise by the securities exchange or the committee of the rights, powers and authorities vested in it by this Part in relation to the fund; (c) all premiums payable in respect of contracts of insurance or indemnity entered into by the securities exchange under section 121; (d) the expenses incurred in the administration of the fund, including the salaries and wages of persons employed by the securities exchange or the committee in relation to the fund; and (e) all other moneys payable out of the fund in accordance with the provisions of this Act. ##### 103A Payment to the credit of the fidelity fund of a futures exchange or futures association Where a body corporate that is a securities exchange, or that is related to a securities exchange, becomes a relevant organisation for the purposes of Part VII of the Futures Industry Act 1986, or for the purposes of the provisions of a law of a participating State or participating Territory that correspond with that Part: (a) the Ministerial Council may approve in writing, on such conditions (if any) as are specified in the approval: (i) the payment of an amount so specified out of the fidelity fund kept under this Part by the body corporate, or by the securities exchange, as the case may be; and (ii) the payment of that amount to the credit of the fidelity fund established or to be established by the body corporate under that Part, or under those provisions, as the case may be; and (b) if the Ministerial Council does so, the amount so specified shall, in accordance with the conditions (if any) so specified: (i) be paid out of the fidelity fund referred to in subparagraph (a)(i); and (ii) be paid to the credit of the fidelity fund referred to in subparagraph (a)(ii). ##### 104 Accounts of fund (1) A securities exchange shall establish and keep proper accounts of its fidelity fund and shall, before 31 August in each year, cause a balance sheet in respect of those accounts to be made out as at the preceding 30 June. (2) A securities exchange shall appoint a registered company auditor to audit the accounts of the fidelity fund. (3) The auditor appointed by a securities exchange shall audit the accounts of the fidelity fund and shall audit each balance sheet and cause a report on the accounts and balance sheet to be laid before the committee of the securities exchange not later than one month after the balance sheet is made out. (4) A securities exchange shall give to the Commission a copy of each report laid before the committee of the securities exchange under this section and of the balance sheet to which the report relates within 14 days after the report was so laid before the committee. ##### 105 Management sub‑committee (1) The committee of a securities exchange may, by resolution, appoint a management sub‑committee of not less than 3 and not more than 5 persons, being members of the securities exchange, at least one of whom is also a member of the committee. (2) The committee of a securities exchange may, by resolution, delegate to a sub‑committee appointed by it under this section all or any of its powers, authorities and discretions under a provision of this Part (other than this section, section 108, subsection 111(6), (7) or (8) or section 113). (3) A power, authority or discretion delegated under subsection (2) may be exercised by members forming a majority of the sub‑committee as if that power, authority or discretion had been conferred by this Part on a majority of the members of the sub‑committee. (4) A delegation by the committee of a securities exchange under this section may at any time, by resolution of the committee, be varied or revoked. (5) The committee of a securities exchange may at any time, by resolution, remove a member of a sub‑committee appointed by it under this section and may, by resolution, fill a vacancy arising in the membership of the sub‑committee. ##### 106 Contributions to fund (1) A person shall not be admitted to membership of a securities exchange or to a partnership in a member firm recognized by a securities exchange unless he has paid to the securities exchange, as a contribution to its fidelity fund, such amount, being not less than $500, as is determined by the securities exchange in relation to that person or in relation to a class of persons in which that person is included. (2) A person who is a member of a securities exchange shall, on or before 31 March in each year, pay to the securities exchange as a contribution to its fidelity fund, such amount, being not less than $100, as is determined by the securities exchange in relation to that person or in relation to a class of persons in which that person is included. ##### 107 Provisions where fund exceeds $2,000,000 (1) In this section, relevant person, in relation to a securities exchange, means a member of the securities exchange: (a) who has made 20 or more annual contributions to the fidelity fund of the securities exchange; and (b) in respect of whom a payment from the fund has not been made or, if such a payment has been made, has been repaid to the fund. (1A) Where the amount in a fidelity fund of a securities exchange exceeds $2,000,000 or such lesser amount as is prescribed, a relevant person is not, subject to this section, required to make further annual contributions to the fund. (1B) Where the amount in a fidelity fund of a securities exchange exceeds $2,000,000 or such lesser amount as is prescribed, the following paragraphs apply in relation to relevant persons who are natural persons: (a) on the retirement from business of such a relevant person, the committee may, in its discretion, pay to him an amount determined in accordance with subsection (1D); (b) on the death of such a relevant person without any payment having been made to him under paragraph (a), the committee may, in its discretion, pay an amount determined in accordance with subsection (1D) to his personal representative or to any person who was wholly or partly dependent on him at the time of his death. (1C) Where the amount in a fidelity fund of a securities exchange exceeds $2,000,000 or such lesser amount as is prescribed, the committee may, in its discretion, pay to a relevant person, being a body corporate, that ceases to be a member of the securities exchange an amount determined in accordance with subsection (1D). (1D) The amount that may, under subsection (1B) or (1C), be paid out of a fidelity fund to or in respect of a relevant person is the total amount of the annual contributions made by the relevant person to the fund or such proportion of those contributions as is for the time being determined by the committee either generally or in relation to the particular relevant person, either with or without simple interest at a rate not exceeding 3% per annum. (2) A determination of the committee under subsection (1D) shall be in writing and may be in respect of any person or any class of persons. (3) The securities exchange may, by notice in writing published in the Gazette: (a) suspend the operation of paragraph (1B)(a) or (b); or (b) revoke any such suspension; but, where the operation of one of those paragraphs is for the time being suspended, the securities exchange shall not suspend the operation of the other of those paragraphs. (4) Where the amount in a fidelity fund is, by reason of payments made out of the fund, less than $1,000,000 or such lesser amount as is prescribed, the securities exchange may determine that a person who by reason of subsection (1A) is not required to make annual contributions to the fund shall again be required, to such extent as it thinks fit, to make annual contributions under section 106. (5) A person to whom a determination under subsection (4) applies is liable to make contributions in accordance with the determination. ##### 108 Levy in addition to annual contributions (1) If at any time the amount of a fidelity fund is insufficient to pay all amounts that, at that time, are required to be paid under section 103, the securities exchange may impose on each person who is liable to contribute to the fund a levy of such amount as it thinks fit for payment into the fund. (2) The amount of such a levy shall be paid within the time and in the manner specified by the securities exchange either generally or in relation to a particular case. (3) A person is not required to pay by way of levy under this section more than $5,000 in the aggregate or more than $1,000 in any period of 12 months. ##### 109 Power of securities exchange to make advances to fund (1) A securities exchange may, from its general funds, give or advance, on such terms as the committee thinks fit, any sums of money to its fidelity fund. (2) Moneys that are advanced under subsection (1) may at any time be repaid from the fidelity fund to the general funds of the securities exchange. ##### 110 Investment of fund Moneys in a fidelity fund that are not immediately required for its purposes may be invested by the securities exchange in any manner in which trustees are for the time being authorized by law to invest trust funds or on deposit with a corporation in respect of which a declaration made under paragraph 97(7)(b) of the Companies Act 1981 is in force. ##### 111 Application of fund (1) Subject to this Part, a fidelity fund of a securities exchange shall be held and applied for the purpose of compensating persons who suffer pecuniary loss: (a) by reason of a defalcation, or fraudulent misuse of securities or documents of title to securities or of other property, by a member of the securities exchange who, when the loss is suffered, is a sole trader, or by an employee of such a member, in respect of money, securities, documents of title to securities or other property that, in the course of or in connection with that member’s business of dealing in securities, was or were entrusted to or received by the member or an employee of the member (whether before or after the commencement of this Act): (i) for or on behalf of another person; or (ii) by reason that the member was a trustee of the money, securities, documents of title or other property; or (b) by reason of a defalcation, or fraudulent misuse of securities or documents of title to securities or of other property, by a person who, when the loss is suffered, is a partner in a member firm, or by an employee of such a firm, in respect of money, securities, documents of title to securities or other property that, in the course of or in connection with the firm’s business of dealing in securities, was or were entrusted to or received by a partner in the firm or an employee of the firm (whether before or after the commencement of this Act): (i) for or on behalf of another person; or (ii) by reason that the firm, or a partner in the firm, was a trustee of the money, securities, documents of title or other property. (2) Where a right to compensation does not arise under subsection (1), a fidelity fund may, subject to this Part, be applied for the purpose of paying to an official receiver or trustee within the meaning of the Bankruptcy Act 1966 an amount not greater than the amount that he certifies is required to make up or reduce the total deficiency arising by reason of the available assets of a bankrupt, being a member of a securities exchange who is a sole trader or being a partner in a member firm recognized by a securities exchange being insufficient to satisfy the debts arising from dealings in securities that have been proved in the bankruptcy by creditors of the bankrupt. (3) Subsection (2) applies in the case of a member of a securities exchange, or a partner in a member firm recognized by a securities exchange, who has made a composition with his creditors, or has executed a deed of assignment or a deed of arrangement, under Part X of the Bankruptcy Act 1966 in like manner as that subsection applies in the case of such a member or partner who has become bankrupt and, for the purposes of that subsection as so applying by virtue of this subsection: (a) the reference in that subsection to a trustee shall be construed as a reference to a controlling trustee within the meaning of Part X of the Bankruptcy Act 1966; (b) the reference to debts proved in the bankruptcy shall be construed as a reference to provable debts in relation to the composition or deed within the meaning of that Part; and (c) references to the bankrupt shall be construed as references to the person who made the composition or executed the deed. (3A) Where a right to compensation does not arise under subsection (1), a fidelity fund may, subject to this Part, be applied for the purpose of paying to a liquidator of a body corporate that is being wound up (being a body corporate that is a member of a securities exchange) an amount not greater than the amount that the liquidator certifies is required to make up or reduce the total deficiency arising by reason of the available assets of the body corporate being insufficient to satisfy the debts arising from dealings in securities that have been proved in the winding up by creditors of the body corporate. (4) Except as otherwise provided in the following provisions of this section, the amount or the sum of the amounts that may be paid under this Part: (a) for the purpose of compensating pecuniary loss as referred to in subsection (1); or (b) for the purpose of making payments under subsection (2) or (3A), shall not exceed in respect of a member of a securities exchange who is a sole trader or in respect of a member firm recognized by a securities exchange the sum of $500,000. (5) For the purposes of calculating the sum referred to in subsection (4), an amount that is paid from a fidelity fund shall, to the extent to which that amount is repaid to the fund, be disregarded. (6) If a securities exchange considers, having regard to the ascertained or contingent liabilities of the fidelity fund, that the assets of the fund so permit, the securities exchange may, by notice published in the Gazette, increase the total amount that may be applied from the fund pursuant to subsection (4), and from the date of the publication of the notice until the notice is revoked or varied the amount specified in the notice is the total amount that may be applied as provided by this section. (7) A notice under subsection (6) may be revoked or varied by the securities exchange by notice published in the Gazette, and a notice that is so varied has effect accordingly. (8) If a securities exchange, having regard to the ascertained or contingent liabilities of the fidelity fund, considers that the assets of the fund so permit, the securities exchange may apply out of the fund such sums in excess of the amount limited by or under this section as the securities exchange, in its discretion, thinks fit in or towards the compensation of persons who have suffered pecuniary loss as referred to in subsection (1) or making a payment under subsection (2) or (3A). (9) Where: (a) any money, securities, documents of title to securities or other property has or have been entrusted to or received by, a person who has at any time been, but has ceased to be, a member of a securities exchange (in this subsection referred to as a former member) or entrusted to, or received by, an employee of such a person; (b) by reason of a defalcation, or the fraudulent misuse of the securities, documents of title or other property by the former member or by an employee of the former member, the person by or from whom the securities, documents of title or other property was or were so entrusted or received suffered pecuniary loss; and (c) at the time the money, securities, documents of title or other property was or were so entrusted or received, the person suffering the pecuniary loss had reasonable grounds for believing and did believe that the former member was at that time a member of the securities exchange concerned; a reference in this section to a member of a securities exchange shall be read as a reference to that former member. (10) A reference in this section to an employee of a member or former member of a securities exchange includes, in the case of a member or former member that is a body corporate, a reference to an officer of the body corporate. (11) A reference in this section to a defalcation, or to a fraudulent misuse of securities or documents of title to securities or of other property, is a reference to a defalcation, or to such a fraudulent misuse, wherever occurring. ##### 112 Claims against the fund (1) Subject to this Part, a person who suffers pecuniary loss as referred to in subsection 111(1) is entitled to claim compensation from the fidelity fund of the relevant securities exchange and to take proceedings in the Court as provided in this Part against the securities exchange to establish that claim. (2) A person does not have a claim against a fidelity fund of a securities exchange in respect of: (a) pecuniary loss suffered before the commencement of this Act or on a day on which the securities exchange was a participating exchange; or (b) pecuniary loss in respect of money or other property suffered after the money or property had, in due course of the administration of a trust, ceased to be under the sole control of a member of the securities exchange or of a partner or partners in a member firm recognized by the securities exchange. (3) Subject to this Part, the amount that a claimant is entitled to claim as compensation from a fidelity fund of a securities exchange is the amount of the actual pecuniary loss suffered by him (including the reasonable costs of, and disbursements incidental to, the making and proof of his claim) less the amount or value of all moneys or other benefits received or receivable by him from a source other than the fund in reduction of the loss. (4) In addition to any compensation that is payable under this Part, interest is payable out of the fidelity fund on the amount of the compensation, less any amount attributable to costs and disbursements, at the rate of 5% per annum (or, if another rate is prescribed, that other rate) calculated from and including the day on which the pecuniary loss was suffered until the day on which the claim is satisfied. ##### 113 Rights of innocent partner in relation to fund (1) Where all persons who have submitted claims pursuant to section 112 have been fully compensated in accordance with the provisions of this Part for pecuniary loss as referred to in subsection 111(1) suffered in relation to money or other property entrusted to or received by a partner in a member firm recognized by a securities exchange, any other partner in that firm who has made payment to a person in compensation for loss suffered by him in relation to that money or property shall be deemed to be subrogated to the extent of that payment to all the rights and remedies of that person against the fidelity fund if the committee, having regard to all the circumstances, determines that the partner was in no way a party to the loss and acted honestly and reasonably in the matter. (2) If a partner in a member firm feels aggrieved by the determination of a committee under subsection (1), he may, within 28 days after receipt of notice of the determination, appeal to the Court against the determination by lodging a notice of appeal in the prescribed form. (3) The appellant shall, on the day on which he lodges notice of appeal with the Court, lodge a copy of the notice with the securities exchange. (4) The Court shall inquire into and decide upon the appeal and, for that purpose, may do all such matters and things, and may do those matters and things in the same manner and to the same extent, as it is empowered to do in the exercise of its ordinary jurisdiction and if the Court is of opinion having regard to all the circumstances that the appellant was not a party to the defalcation or fraudulent misuse of securities or documents of title to the securities or of other property from which the pecuniary loss arose and that he acted honestly and reasonably in the matter, it may order that the appellant shall, to the extent of any payment made by him, be subrogated to the rights and remedies, in relation to the fidelity fund of the relevant securities exchange, of the person to whom he made such a payment. ##### 114 Notice calling for claims against fund (1) A securities exchange may cause to be published in a daily newspaper circulating generally in the Territory (and if, in any State or other Territory, that newspaper does not circulate generally, in a newspaper that does so circulate in that State or other Territory), a notice in the prescribed form specifying a date, not being earlier than 3 months after the publication of the notice, on or before which claims for compensation from the fidelity fund, in relation to the person specified in the notice, may be made. (2) A claim for compensation from a fidelity fund of a securities exchange in respect of a pecuniary loss shall be made in writing to the securities exchange: (a) where a notice under subsection (1) has been published, on or before the date specified in the notice; or (b) where no such notice has been published, within 6 months after the claimant became aware of the pecuniary loss; and a claim that is not so made is barred unless the securities exchange otherwise determines. (3) It is a defence to an action for damages against a securities exchange, a member of a committee of a securities exchange or a member or employee of a securities exchange in respect of the publication of a notice under subsection (1) if the defendant establishes that the notice was published in good faith for the purposes of this section. ##### 115 Power of committee to settle claims (1) Subject to this Part, a committee may allow and settle a proper claim for compensation from a fidelity fund of a securities exchange at any time after the occurrence of the pecuniary loss in respect of which the claim arose. (2) Subject to subsection (3), a person shall not commence proceedings under this Part against a securities exchange without leave of the committee unless: (a) the committee has disallowed his claim; and (b) the claimant has exhausted all relevant rights of action and other legal remedies for the recovery of the money, securities, documents of title to securities or other property in respect of which the pecuniary loss occurred, being rights and remedies that are available against the member of the securities exchange in relation to whom the claim arose and all other persons who are liable in respect of the loss suffered by the claimant, other than any right or remedy that the claimant may have: (i) under section 112, against another securities exchange; or (ii) under the provision of a law of a participating State or participating Territory that corresponds with section 112, against a body corporate that is a securities exchange for the purposes of the corresponding law of that State or Territory. (3) A person who has been refused leave by the committee of a securities exchange under subsection (2) may apply to the Court for leave to commence proceedings against the securities exchange and the Court may make such order in the matter as it thinks fit. (4) A committee, after disallowing, whether wholly or partly, a claim for compensation from a fidelity fund of a securities exchange, shall serve notice of the disallowance in the prescribed form on the claimant or his solicitor. (5) Proceedings against a securities exchange in respect of a claim that has been disallowed by a committee shall not be commenced after the expiration of 3 months after the service of the notice of disallowance referred to in subsection (4). (6) In proceedings brought to establish a claim, evidence of an admission or confession by, or other evidence that would be admissible against, the person against whom a defalcation or fraudulent misuse of property is alleged is admissible to prove the defalcation or fraudulent misuse notwithstanding that the person is not the defendant in or a party to those proceedings, and all defences that would have been available to that person are available to the securities exchange. (7) The committee or, where proceedings are brought to establish a claim, the Court, if satisfied that there was a defalcation or fraudulent misuse of property on which to found the claim, may allow the claim and act accordingly, notwithstanding that the person against whom the defalcation or fraudulent misuse of property is alleged has not been convicted or prosecuted or that the evidence on which the committee or Court, as the case may be, acts would not be sufficient to establish the guilt of that person on a criminal trial in respect of the defalcation or fraudulent misuse of property. ##### 116 Form of order of Court establishing claim (1) Where in proceedings brought to establish a claim the Court is satisfied that there was a defalcation or fraudulent misuse of property on which to found the claim and that otherwise the claimant has a valid claim, the Court shall, by order: (a) declare the fact and the date of the defalcation or fraudulent misuse of property and the amount of the claim; and (b) direct the committee to allow the claim as so declared and deal with it in accordance with the provisions of this Part. (2) In any such proceedings all questions of costs are in the discretion of the Court. ##### 117 Power of committee to require production of securities etc. The committee of a securities exchange may at any time require a person to produce and deliver any securities, documents or statements of evidence necessary to support a claim made or necessary for the purpose either of exercising its rights against a member of the securities exchange or a partner or the partners in a member firm recognized by the securities exchange or any other person or of enabling criminal proceedings to be taken against a person in respect of a defalcation or fraudulent misuse of property, and in default of delivery of any such securities, documents or statements of evidence by the first‑mentioned person, the committee may disallow any claim by him under this Part. ##### 118 Subrogation of securities exchange to rights etc. of claimant on payment from fund On payment out of a fidelity fund of a securities exchange of any moneys in respect of a claim under this Part, the securities exchange shall be deemed to be subrogated to the extent of that payment to all the rights and remedies of the claimant in relation to the loss suffered by him from the defalcation or fraudulent misuse of property. ##### 119 Payment of claims only from fund Money or other property belonging to a securities exchange other than the fidelity fund, is not available for the payment of a claim under this Part, whether the claim is allowed by the committee or is made the subject of an order of the Court. ##### 120 Provision where fund insufficient to meet claims or where claims exceed total amount payable (1) Where the amount in a fidelity fund of a securities exchange is insufficient to pay the whole of the amount of all claims against it that have been allowed or in respect of which orders of the Court have been made, the amount in the fund shall, subject to subsection (2), be apportioned among the claimants in such manner as the committee thinks equitable, and such a claim so far as it then remains unpaid shall be deemed to be charged against future receipts of the fund and paid out of the fund when moneys are available in the fund. (2) Where the aggregate of all claims that have been allowed or in respect of which orders of the Court have been made in relation to defalcations or fraudulent misuses of property by or in connection with a sole trader or partner in a member firm recognized by a securities exchange exceeds the total amount that may, pursuant to section 111, be paid under this Part in respect of that sole trader or member firm, the total amount shall be apportioned among the claimants in such manner as the committee thinks equitable, and on payment out of the fund of that total amount in accordance with that apportionment all such claims and any orders relating to those claims and all other claims against the fund that may thereafter arise or be made in respect of defalcations or fraudulent misuses of property by or in connection with that sole trader or member firm are discharged. ##### 121 Power of securities exchange to enter into contracts of insurance or indemnity (1) A securities exchange may, in its discretion, enter into a contract with a person carrying on fidelity insurance business whereby the securities exchange will be insured or indemnified to the extent and in the manner provided by the contract against liability in respect of claims under this Part. (2) Such a contract may be entered into in relation to members of the securities exchange generally, or in relation to particular members named in the contract, or in relation to members generally with the exclusion of particular members named in the contract. (3) An action does not lie against a securities exchange or against a member or employee of a securities exchange or committee or against a member of a management sub‑committee for damage alleged to have been suffered by a member of the securities exchange by reason of the publication in good faith of a statement that a contract entered into under this section does or does not apply with respect to him. ##### 122 Application of insurance moneys A claimant against a fidelity fund of a securities exchange does not have a right of action against a person with whom a contract of insurance or indemnity is made under this Part in respect of such a contract or a right or claim with respect to any moneys paid by the insurer in accordance with such a contract. ## Part IXA—The National Guarantee Fund ### Division 1—Interpretation ##### 122AA Interpretation (1) In this Part, unless the contrary intention appears: > Board means the committee of the Corporation. > claim means a claim under Division 6, 6A or 7. > eligible exchange means: (a) the Exchange; or (b) a securities exchange, or a recognised securities exchange, that is neither the Exchange nor an Exchange subsidiary. > Fund provisions means all of the following provisions: (a) the provisions of this Part; (b) the respective provisions of the laws of the participating States and participating Territories that correspond with this Part. > minimum amount means: (a) unless paragraph (b) applies—$15,000,000; or (b) if a determination is in force under section 122DD—the amount specified in the determination as the minimum amount of the Fund for the purposes of the Fund provisions. > obligations, in relation to a member or member organisation of a participating exchange, in relation to a person, includes obligations arising under a law, under the participating exchange’s business rules or under an agreement between: (a) in any case—the member or member organisation and the person; or (b) if the member is a partner in a member organisation of the participating exchange—the last‑mentioned member organ‑isation and the person. > orderly market means an orderly market on a stock market of a participating exchange or of an Exchange subsidiary. > participating exchange means an eligible exchange that is a member of the Corporation. > property includes money, securities, and documents of title to, and instruments of transfer relating to, securities. > quoted securities, in relation to a transaction, means securities that, at the time when the agreement for the transaction is made, are quoted on a stock market of a participating exchange or of an Exchange subsidiary. > relative, in relation to a person, means a parent or remoter lineal ancestor, son, daughter or remoter issue, or brother or sister, of the person. > relevant Act means the Australian Stock Exchange and National Guarantee Fund Act 1987. > relevant commencement means the commencement of section 15 of the relevant Act. > reportable transaction means a sale or purchase, by a member organisation (in this definition referred to as the first dealer) of a participating exchange, of quoted securities, where: (a) in any case—the participating exchange’s business rules, as in force when the agreement for the sale or purchase is made, require the first dealer to report the sale or purchase to the participating exchange; or (b) if the sale or purchase is to or from, as the case may be, a member organisation (in this definition referred to as the second dealer) of a participating exchange—the last‑ mentioned participating exchange’s business rules, as in force when the agreement for the sale or purchase is made, require the second dealer to report to the last‑mentioned participating exchange the purchase or sale of the securities by the second dealer from or to, as the case may be, the first dealer. > settlement documents, in relation to a transaction, means documents the supply of which in accordance with the agreement for the transaction: (a) if the agreement has not been discharged—is sufficient; or (b) if the agreement has been discharged, whether by performance or otherwise—would, if the agreement had not been discharged, be sufficient; to discharge the obligations of the seller under the agreement, in so far as those obligations relate to the supply of documents in connection with the transaction. > transaction means a sale or purchase of securities. (2) Except so far as the contrary intention appears, a reference in section 122CB, 122CD, 122DB or 122DC, subsection 122FC(1), paragraph 122FC(5)(c), subsection 122FC(6), section 122GA, subsection 122GB(3), (4) or (5), 122GB(1), (2), (6) or (7) or 122GD(1), paragraph 122PC(b) or 122T(1)(b), (3)(a) or (4)(a), section 122W, subsection 122X(4), section 122YD or subsection 122ZA(1), (1A), (2) or (4), 122ZD(2) or 122ZF(8) to a provision or provisions of a relevant Act includes a reference to a provision or provisions of a law of a participating State or participating Territory that corresponds or correspond with that provision, or those provisions, of that relevant Act. (3) For the purposes of this Part, a sale and purchase of securities shall be taken to consist of 2 distinct transactions, namely, the sale of the securities by the seller to the purchaser and the purchase of the securities by the purchaser from the seller. (4) Except so far as the contrary intention appears, a reference in this Part to a sale, or to a purchase, includes a reference to a sale or purchase the agreement for which is made outside the Territory, whether within Australia or not. (6) A reference in this Part to a business being carried on in the Territory includes a reference to the business being carried on both in the Territory and outside it, whether within Australia or not. (7) A person who, or a partner in a partnership that, contravenes a provision of this Part is guilty of an offence neither by virtue of that provision nor by virtue of section 141. ##### 122AB Excluded persons (1) In this Part, excluded person, in relation to a member of a participating exchange, means: (a) in any case—the member; (b) if the member is a member organisation of the participating exchange and is not a body corporate: (i) a person who is the spouse, or who is a relative, of the member; (ii) a trustee of a trust in relation to which the member or a person of a kind referred to in subparagraph (i) is capable of benefiting; or (iii) a body corporate of which the member is an officer, or in which the member or a person of a kind referred to in subparagraph (i) has, or the member and such a person, the member and 2 or more such persons, or 2 or more such persons, together have, a controlling interest; (c) if the member is a member organisation of the participating exchange and is a body corporate: (i) a person who is an officer of the body corporate; (ii) a body corporate that is related to the first‑mentioned body corporate; (iii) a person who is the spouse, or who is a relative, of a person of a kind referred to in subparagraph (i); (iv) a trustee of a trust in relation to which a person of a kind referred to in subparagraph (i) or (iii) is capable of benefiting; or (v) a body corporate in which a person of a kind referred to in subparagraph (i) or (iii) has, or 2 or more such persons together have, a controlling interest; (d) if the member is a partner in a member organisation of the participating exchange and is not a body corporate: (i) a person who is a partner in the member organisation; (ii) a person who is the spouse, or who is a relative, of a partner (not being a body corporate) in the member organisation; (iii) a trustee of a trust in relation to which a person of a kind referred to in subparagraph (i) or (ii) is capable of benefiting; (iv) a person who is an officer of a body corporate that is a partner in the member organisation; or (v) a body corporate of which a person of a kind referred to in subparagraph (i), (ii) or (iii) is an officer, or in which such a person has, or 2 or more such persons together have, a controlling interest; or (e) if the member is a partner in a member organisation of the participating exchange and is a body corporate: (i) a person who is an officer of a body corporate that is a partner in the member organisation; (ii) a body corporate that is related to the first‑mentioned body corporate; (iii) a person who is a partner in the member organisation; (iv) a person who is the spouse, or who is a relative, of a person (other than a body corporate) of a kind referred to in subparagraph (i) or (iii); (v) a trustee of a trust in relation to which a person of a kind referred to in subparagraph (i), (iii) or (iv) is capable of benefiting; or (vi) a body corporate in which a person of a kind referred to in subparagraph (i), (iii) or (iv) has, or 2 or more such persons together have, a controlling interest. (2) A reference in subsection (1) to a relative of a person includes a reference to a relative of the spouse (if any) of the person. (3) A reference in subsection (1) to an officer of a body corporate is a reference to: (a) a director, secretary or executive officer of the body corporate; or (b) a person who is an officer of the body corporate by virtue of paragraph (b), (c), (d) or (e) of the definition of officer in subsection 4(1). ##### 122AC Becoming insolvent (1) For the purposes of this Part, a body corporate becomes insolvent at a particular time if, and only if, at that time: (a) the body corporate commences to be wound up, comes under official management or ceases to carry on business; (b) a receiver, or a receiver and manager, of property of the body corporate is appointed, whether by a court or otherwise; or (c) the body corporate enters into a compromise or arrangement with its creditors. (2) For the purposes of this Part, a natural person becomes insolvent at a particular time if, and only if, at that time: (a) a creditor’s petition or a debtor’s petition is presented under Division 2 or 3, as the case may be, of Part IV of the Bankruptcy Act 1966 against: (i) the person; (ii) a partnership in which the person is a partner; or (iii) 2 or more joint debtors who include the person; (b) the person’s property becomes subject to control under Division 2 of Part X of the Bankruptcy Act 1966; (c) the person executes a deed of assignment or deed of arrangement under Part X of the Bankruptcy Act 1966; or (d) the person’s creditors accept a composition under Part X of the Bankruptcy Act 1966. (3) A reference in subsection (2) to a Division or Part of the Bankruptcy Act 1966 includes a reference to provisions of a law of an external Territory, or a country other than Australia or an external Territory, that correspond with that Division or Part. ##### 122AD Permitted investments For the purposes of this Part, money shall be taken to be invested in a permitted manner if, and only if, it is invested: (a) in any manner in which trustees are for the time being authorised by a law in force in the Territory or in a participating State or participating Territory to invest trust funds; or (b) on deposit with a body corporate in respect of which a declaration made under: (i) paragraph 97(7)(b) of the Companies Act 1981; or (ii) a provision of a law of a participating State or participating Territory that corresponds with that paragraph; is in force. ### Division 2—The Corporation ##### 122BA Ministerial Council to nominate (1) Subject to subsection (3), the Ministerial Council may, by instrument in writing, nominate as the National Securities Exchanges Guarantee Corporation a body corporate (whether incorporated before or after the relevant commencement) that is, for the purposes of the Companies Act 1981, a company limited by guarantee. (2) The Commission shall cause a copy of an instrument executed by the Ministerial Council under subsection (1) to be published in the Gazette, but failure of the Commission to do so does not affect the validity of the instrument. (3) The Ministerial Council shall not nominate a body corporate under subsection (1) unless the Ministerial Council is satisfied that: (a) the Exchange is a member of the body corporate; (b) none of the members of the body corporate is a person other than: (i) an eligible exchange; or (ii) a nominee of an eligible exchange, being an eligible exchange that is a member of the body corporate; (c) the body corporate’s constituent documents provide that no person, other than a person of a kind referred to in subparagraph (b)(i) or (ii), may become or remain a member of the body corporate; (d) the body corporate will, if nominated under subsection (1), be able to perform and exercise the Corporation’s functions and powers under the Fund provisions adequately and with due regard to the interests of the public; (e) the body corporate has obtained, or will within a reasonable period after being nominated under subsection (1) obtain, indemnity insurance in respect of its liabilities for: (i) negligence in; and (ii) defalcations, or fraudulent misuse of property, by an officer, employee or agent of the body corporate in connection with; the performance or exercise of the Corporation’s functions or powers under the Fund provisions, or has made or will make other satisfactory provision for meeting those liabilities; and (f) the body corporate’s business rules make satisfactory provision: (i) for ensuring the safety of property received by the body corporate; and (ii) generally for the protection of the interests of the public. ##### 122BB Functions and powers under Fund provisions (1) In addition to the legal capacity and powers that it has by virtue of section 67 of the Companies Act 1981, the Corporation: (a) has such functions and powers as are conferred on it by the provisions of this Part; and (b) shall perform any functions, and may exercise any powers, that are conferred, or expressed to be conferred, on it by the provisions of a law of a participating State or participating Territory that correspond with this Part. (2) Section 68 of the Companies Act 1981 does not apply in relation to a function or power conferred, or expressed to be conferred, as mentioned in paragraph (1)(a) or (b) of this section. (3) Except so far as the contrary intention appears, a reference in this Part to functions or powers of the Corporation under the Fund provisions is a reference to functions or powers conferred, or expressed to be conferred, as mentioned in paragraph (1)(a) or (b). ##### 122BC Commission to be notified of amendments to business rules (1) Where an amendment is made, by way of rescission, alteration or addition, to the business rules of the Corporation, the Corporation shall, forthwith after the making of the amendment, give written notice of the amendment to the Commission. (2) A notice under subsection (1) shall: (a) set out the text of the amendment; (b) specify the date on which the amendment was made; and (c) contain an explanation of the purpose of the amendment. (3) If the notice required to be given by subsection (1) is not given within 21 days after the amendment is made, the amendment ceases to have effect. (4) Where the Commission receives a notice under this section, it shall forthwith send a copy of the notice to each member of the Ministerial Council. (5) The Ministerial Council may, within 28 days after the receipt by the Commission of a notice under this section, disallow the whole or a specified part of the amendment to which the notice relates. (6) Where the Ministerial Council disallows the whole or a part of an amendment to which a notice under this section relates, the Commission shall forthwith give notice of the disallowance to the Corporation and, upon receipt by the Corporation of the notice of disallowance, the amendment, to the extent of the disallowance, ceases to have effect. ### Division 3—The Fund ##### 122CA Establishment (1) The Corporation shall establish and keep a fund, to be known as the National Guarantee Fund, which shall be administered by the Board on behalf of the Corporation. (2) The assets of the Fund are the property of the Corporation, but shall be kept separately from all other property and shall be held on trust for the purposes set out in the Fund provisions. ##### 122CB Property constituting Fund The Fund shall consist of: (a) money paid into the Fund under subsection 122ZF(1); (b) property that has vested in the Corporation, and become part of the Fund, by virtue of subsection 122ZF(2); (c) money paid into the Fund under subsection 97(3); (d) money paid into the Fund under section 122EC or 122FB; (e) the interest and profits from time to time accruing from the investment of the Fund and paid into the Fund under subsection 122DC(2); (f) money recovered by or on behalf of the Corporation in the exercise of a right of action that the Corporation has by virtue of the Fund provisions; (g) money paid by an insurer pursuant to a contract of insurance or indemnity entered into by the Corporation under section 122ZC; (h) money paid to the Corporation by a person making a claim under section 122K in respect of a purchase of securities; and (j) all other money or all other property lawfully paid into, or forming part of, the Fund. ##### 122CC Fund to be kept in separate bank account The money in the Fund shall, until invested or applied in accordance with the Fund provisions, be kept in a separate account in a bank in Australia. ##### 122CD Payments out of Fund (1) Subject to this Part, there shall be paid out of the Fund, in such order as the Board deems proper: (a) amounts, including costs, disbursements and interest, that the Fund provisions require to be paid in connection with claims; (b) all legal and other expenses incurred in investigating or defending claims or incurred in relation to the Fund or in the exercise by the Corporation or the Board of the rights, powers and authorities vested in it by the Fund provisions in relation to the Fund; (c) money payable to a participating exchange under section 122GB; (d) to the extent that the money referred to in section 122DC is insufficient for the purpose, premiums payable in respect of contracts of insurance or indemnity entered into by the Corporation under section 122ZC; (e) to the extent that the money referred to in section 122DC is insufficient for the purpose, the expenses incurred in the administration of the Fund, including the salaries and wages of persons employed by the Corporation or the Board in relation to the Fund; and (f) all other money payable out of the Fund in accordance with this Act or a corresponding law of a participating State or participating Territory. (2) In paragraphs (1)(a) and (b), claim means a claim under Division 6, 6A or 7 or a claim that, for the purposes of Division 9, is a transferred claim in relation to a transferring exchange. (3) Where: (a) an amount is payable out of the Fund in connection with a claim by a person against the Corporation under Division 6 or 6A that has been allowed; and (b) an amount is payable out of the Fund in connection with a claim by a person against the Corporation under Division 7 that has been allowed; then, regardless of the order in which those persons became respectively entitled to make those claims, the amount referred to in paragraph (a) shall be paid out of the Fund in priority to the amount referred to in paragraph (b). ##### 122DA Accounts of Fund (1) The Corporation shall establish and keep proper accounts of the Fund and shall, before 31 August in each year, cause a balance sheet in respect of those accounts to be made out as at the preceding 30 June. (2) The Corporation shall appoint a registered company auditor to audit the accounts of the Fund. (3) The auditor appointed by the Corporation shall audit the accounts of the Fund and shall audit each balance sheet and shall cause a report on the accounts and balance sheet to be laid before the Board within one month after the balance sheet is made out. (4) The Corporation shall, within 14 days after a report is laid before the Board under this section, give to the Commission a copy of the report and a copy of the balance sheet to which the report relates. (5) The Corporation shall cause a copy of each report made out under this section, and a copy of the balance sheet to which it relates, to be laid before the annual general meeting of each participating exchange next following the making of that report. (6) In subsection (5), annual general meeting has the same meaning as that expression has: (a) in the Companies Act 1981; or (b) in the provisions of a law of a participating State or participating Territory that correspond with that Act; as the case requires. ##### 122DB Investment of Fund (1) Money in the Fund that is not immediately required for its purposes may be invested by the Corporation in a permitted manner. (2) Property in which money is invested pursuant to subsection (1) forms part of the Fund. ##### 122DC Interest and profits from investment of Fund (1) The interest and profits from time to time accruing from the investment of the Fund shall be applied by the Corporation to pay: (a) the expenses incurred in the administration of the Fund, including the salaries and wages of persons employed by the Corporation or the Board in relation to the Fund; and (b) all premiums payable in respect of contracts of insurance or indemnity entered into by the Corporation under section 122ZC. (2) An amount of interest or profit that accrues from the investment of the Fund and is not immediately required for the purposes referred to in subsection (1) shall be paid into the Fund. ##### 122DD Minimum amount of Fund The Corporation may, with the approval in writing of the Ministerial Council, determine, by notice published in the Gazette, an amount (whether greater than, or less than, $15,000,000) to be the minimum amount of the Fund for the purposes of the Fund provisions. ### Division 4—Levies where Fund less than Minimum Amount ##### 122EA Interpretation In this Division, dealer means a member organisation of a participating exchange. ##### 122EB Levy on reportable transactions (1) Where the amount in the Fund is less than the minimum amount, the Corporation may, whether or not it also imposes a levy under section 122FB, impose a levy on reportable transactions. (2) A levy imposed under this section is payable: (a) in respect of a reportable transaction included in a class of transactions, or in any of 2 or more classes of transactions, determined in writing by the Corporation for the purposes of the levy; and (b) at a rate or rates so determined. (3) The Corporation may determine under subsection (2) different rates of levy in respect of: (a) transactions in different kinds of securities; or (b) transactions by dealers included in different classes of dealers. (4) Where the Corporation makes or varies a determination under subsection (2), it shall supply to each participating exchange a copy of the determination, or of the variation and of the determination as varied, as the case may be. (5) Notwithstanding subsection (2), where an amount of a levy imposed under a provision of a law of a participating State or participating Territory that corresponds with this section was payable in respect of a transaction and has been paid, an amount of a levy imposed under this section is not payable in respect of the transaction. (6) In this section, reportable transaction means a sale or purchase of securities by a person or partnership, where, as at the time when the agreement for the sale or purchase is made: (a) the sale or purchase is a reportable transaction as defined in subsection 122AA(1); and (b) the person or partnership is a member organisation of a participating exchange and is carrying on in the Territory a business of dealing in securities. ##### 122EC Payment by leviable dealer (1) In subsection (2), leviable dealer, in relation to a transaction, means: (a) if, when the transaction is entered into, a determination under subsection (3) is in force in relation to a class of transactions that includes the first‑mentioned transaction—the dealer prescribed by the determination; or (b) otherwise: (i) in the case of a sale of securities—the dealer selling the securities; or (ii) in the case of a purchase of securities—the dealer purchasing the securities. (2) Where an amount of a levy imposed under section 122EB is payable in respect of a reportable transaction, the leviable dealer in relation to the transaction shall: (a) pay the amount of the levy to a participating exchange of which the dealer is a member organisation; and (b) if, but for this subsection, the dealer would be required neither by a provision of a law nor by the participating exchange’s business rules to furnish to the participating exchange particulars of the transaction sufficient to enable the participating exchange to ascertain the amount of levy—so furnish such particulars; within the period, and in the manner, specified by the participating exchange in writing either generally or in relation to a class of transactions that includes the first‑mentioned transaction. (3) The Corporation may make a determination in writing prescribing, in relation to a class or classes of reportable transactions, the dealer who is to be the leviable dealer in relation to a transaction included in that class or in any of those classes. (4) A participating exchange shall, within the period, and in the manner, specified in writing by the Corporation, pay to the Corporation an amount of levy paid to the participating exchange under subsection (2). (5) An amount of levy paid to the Corporation under this section shall be paid into the Fund. ##### 122FA Revocation of levy on reportable transactions (1) The Corporation may at any time, whether or not the amount in the Fund exceeds the minimum amount, revoke a levy imposed under section 122EB, but need not revoke such a levy merely because the amount in the Fund exceeds the minimum amount. (2) The revocation of a levy does not affect a liability to pay an amount of levy that became payable before the revocation. ##### 122FB Levy on participating exchanges (1) Where the amount in the Fund is less than the minimum amount, the Corporation may, whether or not it also imposes a levy under section 122EB, impose a levy: (a) unless paragraph (b) applies—on the Exchange; or (b) if there are 2 or more participating exchanges that are securities exchanges—on one, or on each of 2 or more, of those participating exchanges. (2) A levy imposed under this section on a participating exchange shall be of an amount, and shall be paid within the period, and in the manner, determined in writing by the Corporation for the purposes of the levy. (3) Where a levy is imposed under this section, the Corporation shall give to each participating exchange a notice setting out the name of the participating exchange on which the levy is imposed and the amount of the levy. (4) For the purposes of paying the whole or a part of a levy imposed under this section, a participating exchange may borrow money on such terms as the committee of the participating exchange thinks fit. (5) An amount of levy paid to the Corporation under this section shall be paid into the Fund. ##### 122FC Levy by participating exchange on members or member organisations (1) A participating exchange on which a levy has been imposed under section 122FB may impose on members, or on member organisations, of the participating exchange who or that carry on in the Territory businesses of dealing in securities a levy for payment towards the first‑mentioned levy. (2) A levy imposed under this section by a participating exchange is payable: (a) by a member, or member organisation, as the case requires, of the participating exchange who or that, as at the time when the levy is imposed: (i) carries on in the Territory a business of dealing in securities; and (ii) is included in a class, or in any of 2 or more classes, of members, or of member organisations, of the participating exchange determined in writing by the participating exchange for the purposes of the levy; and (b) at a rate or rates determined in writing by the participating exchange for the purposes of the levy. (3) A participating exchange may determine under subsection (2) different rates of levy in respect of different classes of members, or different classes of member organisations, of the participating exchange. (4) The amount of a levy imposed by a participating exchange under this section shall be paid to the participating exchange within the period, and in the manner, specified in writing by the participating exchange either generally or in relation to particular members, particular classes of members, particular member organisations, or particular classes of member organisations, of the participating exchange. (5) Notwithstanding subsections (2) and (4), where an amount of a levy imposed: (a) by a participating exchange; (b) under a provision of a law of a participating State or participating Territory that corresponds with this section; and (c) for payment towards a levy imposed under section 122FB; was payable by a member, or member organisation, of the participating exchange and has been paid, an amount of a levy imposed under this section by the participating exchange for payment towards the levy referred to in paragraph (c) of this subsection is not payable by the member or member organisation. (6) A participating exchange shall pay an amount paid to it by way of levy under this section in payment of the levy imposed under section 122FB. ### Division 5—Securities Industry Development Accounts ##### 122GA Interpretation In this Division, development account means an account kept for the purposes of subsection 122GC(1). ##### 122GB Payments where Fund exceeds minimum amount (1) Where the amount in the Fund exceeds the minimum amount, the Board may, in its discretion, determine in writing that a specified amount equal to the whole or a part of the excess be paid out of the Fund: (a) unless paragraph (b) applies—to the Exchange; or (b) if there are 2 or more participating exchanges: (i) to a specified participating exchange; or (ii) to 2 or more specified participating exchanges in specified proportions. (2) Where there are 2 or more participating exchanges, a determination under subsection (1) shall be just and equitable having regard, in relation to each participating exchange, to: (a) the amounts that have been paid into the Fund and that are attributable to, or to members or member organisations of, that participating exchange; and (b) the amounts that have been paid out of the Fund and that are so attributable. (3) Where a determination is made in accordance with this section, the amount specified in the determination shall be paid out of the Fund in accordance with the determination. (4) For the purposes of subsection (2), where: (a) money in the fidelity fund of a securities exchange or recognised securities exchange has been paid into the Fund under subsection 122ZF(1); or (b) property of the fidelity fund of a securities exchange or recognised securities exchange (other than money in that fidelity fund) has vested in the Corporation, and become part of the Fund, by virtue of subsection 122ZF(2); the amount of that money shall be taken, or an amount equal to the value of that property shall be deemed, as the case may be, to have been paid into the Fund and to be attributable to: (c) in the case of an Exchange subsidiary—the Exchange; or (d) in any other case—that securities exchange or recognised securities exchange. (5) For the purposes of subsection (2), where an amount is paid out of the Fund in connection with a claim that is, for the purposes of Division 9, a transferred claim in relation to a securities exchange or recognised securities exchange, the amount shall be taken to be attributable to: (a) in the case of an Exchange subsidiary—the Exchange; or (b) in any other case—that securities exchange or recognised securities exchange. ##### 122GC Payments into and out of development account (1) Subject to this section, a participating exchange shall keep money paid to it under section 122GB in a separate account designated as a securities industry development account. (2) A participating exchange shall not make a payment out of a development account unless the payment is made: (a) for a purpose in relation to which an approval is in force under subsection (3) in relation to the payment; or (b) into the Fund. (3) The Ministerial Council may approve in writing, in relation to payments to be made out of development accounts, purposes relating to the development of the securities industry. (4) Without limiting the generality of subsection (3), the purpose of reimbursing a person in respect of money that the person spent, before the relevant commencement, for a purpose relating to the development of the securities industry shall be taken, for the purposes of that subsection, to be a purpose relating to the development of the securities industry. (5) An approval under subsection (3) may include conditions relating to the payments to which the approval relates. (6) A participating exchange that makes, in contravention of subsection (2), a payment out of a development account shall pay into the account, from its general funds, an amount equal to the amount of the first‑mentioned payment. (7) A participating exchange that: (a) makes as permitted by virtue of paragraph (2)(a) a payment out of a development account; and (b) contravenes a condition that, when the payment was made, was included in an approval in force under subsection (3) in relation to the payment; shall pay into the account, from its general funds, an amount equal to the amount of the first‑mentioned payment. (8) In this section, securities industry means the securities industry in Australia or in a part of Australia. ##### 122GD Investment (1) Money that is in a development account kept by a participating exchange and is not immediately required for the purposes of making payments as permitted by subsection 122GC(2) may be invested by the participating exchange in a permitted manner. (2) The interest and profits from time to time accruing from the investment of money in a development account shall be paid into the account. ##### 122GE Accounts (1) A participating exchange that is a securities exchange shall, in respect of each financial year at any time during which there is money in a development account kept by the participating exchange, lodge with the Commission, before the prescribed day for that financial year, a statement containing, in relation to payments out of such an account during that year, such information as is prescribed. (2) In this section: > financial year, in relation to a participating exchange, means a period that is, for the purposes of the Companies Act 1981, a financial year of the participating exchange. > prescribed day, in relation to a financial year of a participating exchange, means the day that is 3 months after the end of that financial year. ### Division 6—Contract Guarantees ##### 122H Interpretation In this Division, unless the contrary intention appears: > claim means a claim under this Division against the Corporation. > completion period, in relation to a sale or purchase of securities by a dealer, means: (a) if the business rules of a participating exchange of which the dealer is a member organisation, being those business rules as in force when the agreement for the sale or purchase is made, prescribe a period, for the purposes of this paragraph, in relation to a class of sales or purchases that includes the sale or purchase—that period; or (b) otherwise—a period that is reasonable, having regard to all the circumstances relating to the sale or purchase. > dealer means a person who, or a partnership that, is or has at any time been a member organisation of a participating exchange. > prescribed period, in relation to a sale or purchase of securities by a dealer, means: (a) if the business rules of a participating exchange of which the dealer is a member organisation, being those business rules as in force when the agreement for the sale or purchase is made, prescribe a period, for the purposes of this paragraph, in relation to a class of sales or purchases that includes the sale or purchase—that period; or (b) otherwise—a period that is reasonable, having regard to all the circumstances relating to the sale or purchase. > purchase price, in relation to a purchase of securities by a dealer on behalf of a person, means the total of: (a) the amount of the consideration for the purchase; and (b) any brokerage fees and other charges, and any stamp duty and other duties and taxes, payable by the person to the dealer in connection with the purchase. > reportable transaction means a transaction that is or has at any time been a reportable transaction as defined in subsection 122AA(1). ##### 122J Claim by selling dealer in respect of default by buying dealer (1) Where, as at the end of the completion period in relation to a reportable transaction that is a sale by a dealer to another dealer: (a) the first‑mentioned dealer has supplied, or is ready, willing and able to supply, to the other dealer, pursuant to the agreement for the sale, settlement documents in relation to the sale; and (b) the other dealer has not paid to the first‑mentioned dealer, pursuant to that agreement, the consideration for the sale; the first‑mentioned dealer may make a claim in respect of the sale. (2) Where a dealer makes a claim in respect of a sale of securities by the claimant to another dealer and, at a particular time, the Board is satisfied that, as at that time: (a) subsection (1) entitles the claimant to make the claim; (b) the claimant has: (i) for the purposes of the claim, supplied to the Corporation; or (ii) pursuant to the agreement for the sale, supplied to the other dealer; settlement documents in relation to the sale; (c) the consideration for the sale has not been paid to the claimant pursuant to the agreement for the sale; and (d) the agreement has not been discharged or otherwise terminated; the Corporation shall allow the claim and pay to the claimant an amount equal to the amount of the consideration. ##### 122K Claim by buying dealer in respect of default by selling dealer (1) Where, as at the end of the completion period in relation to a reportable transaction that is a purchase by a dealer from another dealer: (a) the first‑mentioned dealer has supplied, or is ready, willing and able to supply, to the other dealer, pursuant to the agreement for the purchase, the consideration for the purchase; and (b) the other dealer has not supplied to the first‑mentioned dealer, pursuant to that agreement, settlement documents in relation to the purchase; the first‑mentioned dealer may make a claim in respect of the purchase. (2) Where a dealer makes a claim in respect of a purchase of securities by the claimant from another dealer and, at a particular time, the Board is satisfied that, as at that time: (a) subsection (1) entitles the claimant to make the claim; (b) the claimant has: (i) for the purposes of the claim, paid to the Corporation; or (ii) pursuant to the agreement for the purchase, paid to the other dealer; the amount of the consideration for the purchase; (c) settlement documents in relation to the purchase have not been supplied to the claimant pursuant to the agreement for the purchase; and (d) the agreement has not been discharged or otherwise terminated; the Corporation shall allow the claim and, subject to section 122N, supply to the claimant settlement documents in relation to the purchase. ##### 122L Claim by selling client in respect of default by selling dealer (1) Where, as at the end of the prescribed period in relation to a reportable transaction that is a sale by a dealer on behalf of a person: (a) the person has supplied to the dealer settlement documents for the purposes of the sale; and (b) the dealer’s obligations to the person in respect of the sale, in so far as they relate to the consideration for the sale, have not been discharged; the person may make a claim in respect of the sale. (2) Where a person makes a claim in respect of a sale of securities by a dealer on behalf of the claimant and, at a particular time, the Board is satisfied that, as at that time: (a) subsection (1) entitles the claimant to make the claim; and (b) the dealer’s obligations to the claimant in respect of the sale, in so far as they relate to the consideration for the sale, have not been discharged; the Corporation shall allow the claim and pay to the claimant the amount of that consideration less so much (if any) of the total of any brokerage fees and other charges, and any stamp duty and other duties and taxes, payable by the claimant in connection with the sale as has not already been paid by the claimant. ##### 122M Claim by buying client in respect of default by buying dealer (1) Where, as at the end of the prescribed period in relation to a reportable transaction that is a purchase by a dealer on behalf of a person: (a) the person has paid to the dealer the purchase price in relation to the purchase; and (b) the dealer’s obligations to the person in respect of the purchase, in so far as they relate to settlement documents in relation to the purchase, have not been discharged; the person may make a claim in respect of the purchase. (2) Where a person makes a claim in respect of a purchase of securities by a dealer on behalf of the claimant and, at a particular time, the Board is satisfied that, as at that time: (a) subsection (1) entitles the claimant to make the claim; and (b) the dealer’s obligations to the claimant in respect of the purchase, in so far as they relate to settlement documents in relation to the purchase, have not been discharged; the Corporation shall allow the claim and, subject to section 122N, supply to the claimant settlement documents in relation to the purchase. ##### 122N Cash settlement of claim where settlement documents unobtainable Where: (a) the Corporation: (i) allows under subsection 122K(2) a claim in respect of a purchase of securities by the claimant from a dealer; or (ii) allows under subsection 122M(2) a claim in respect of a purchase of securities by a dealer on behalf of the claimant; (b) it is not reasonably practicable for the Corporation to obtain from the dealer, before the end of: (i) if the business rules of a participating exchange of which the dealer is a member organisation, being those business rules as in force when the Board allows the claim, prescribe a period, for the purposes of this section, in relation to a class of claims that includes the claim—that period; or (ii) otherwise—such period as the Board, having regard to all the circumstances relating to the claim, considers reasonable; settlement documents in relation to the purchase; and (c) because: (i) whether by reason that dealing in those securities is suspended or for any other reason, there exists at no time during that period an orderly market in those securities; or (ii) the total number of those securities offered for sale on stock markets of participating exchanges or Exchange subsidiaries at times during that period when there exists an orderly market in those securities is insufficient; it is not reasonably practicable for the Corporation to obtain before the end of that period, otherwise than from the dealer, settlement documents in relation to the purchase; the Board may determine to pay to the claimant the amount that, as at the time when the claimant became entitled to make the claim, was the amount of the actual pecuniary loss suffered by the claimant in respect of the purchase, and if the Board does so, the Corporation shall pay that amount to the claimant. ##### 122P Making of claims (1) Subsection 122J(1) or 122K(1) does not entitle a person to make a claim in respect of: (a) a sale of securities by the person to another person; or (b) a purchase of securities by the person from another person; as the case may be, unless, on the day on which the agreement for the sale or purchase was entered into: (c) the first‑mentioned person was a member organisation of a participating exchange and carried on in the Territory a business of dealing in securities; and (d) the other person was a member organisation of a participating exchange. (2) Subsection 122L(1) or 122M(1) does not entitle a person to make a claim in respect of: (a) a sale of securities by another person on behalf of the first‑mentioned person; or (b) a purchase of securities by another person on behalf of the first‑mentioned person; as the case may be, unless, on the day on which the agreement for the sale or purchase was entered into, the other person was a member organisation of a participating exchange and carried on in the Territory a business of dealing in securities. (3) Where: (a) a provision of a law of a participating State or participating Territory that corresponds with subsection 122J(1), 122K(1), 122L(1) or 122M(1) entitles a person to make a claim in respect of a transaction; and (b) the Corporation allows the claim; the Corporation shall not allow a claim that that subsection entitles a person to make in respect of the transaction. (4) In subsections (1), (2) and (3), person includes a partnership. (5) A claim shall be in writing and shall be served on the Corporation within 6 months after the day on which the claimant became entitled to make the claim. (6) A claim that is not made within the period prescribed by subsection (5) is barred unless the Board otherwise determines. ### Division 6A—Unauthorised transfer ##### 122PA Interpretation 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. ##### 122PB Execution of transfer on a person’s behalf as transferor 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. ##### 122PC Unauthorised execution of transfer 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. ##### 122PD Claim by transferor 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. ##### 122PE Claim by transferee or sub‑transferee (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. ##### 122PF How and when claim may be made (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. ##### 122PG How claim is to be satisfied (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. ##### 122PH Discretionary further compensation to transferor (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. ##### 122PJ Nexus between dealer and Territory 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. ##### 122PK Preventing double recovery 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. ### Division 7—Claims in respect of Insolvent Members ##### 122Q Interpretation (1) In this Division, unless the contrary intention appears: > claim means a claim against the Corporation under this Division. > dealer means a member of a participating exchange. > member organisation means a member organisation of a participating exchange. (2) A reference in this Part to property being entrusted to, or received by, a person or partnership includes a reference to the property being entrusted to, or received by, the person or partnership outside the Territory, whether within Australia or not. ##### 122R Claim in respect of property entrusted to, or received by, dealer before dealer became insolvent (1) Subject to this Division, where: (a) a dealer becomes insolvent at a particular time; (b) at an earlier time (whether before, at or after the relevant commencement), property was, in the course of, or in connection with, the dealer’s business of dealing in securities, entrusted to, or received by: (i) unless subparagraph (ii) applies—the dealer or an employee of the dealer; or (ii) if the dealer was, at the earlier time, a partner in a member organisation—the member organisation, or a partner in, or an employee of, the member organisation; and was so entrusted or received for or on behalf of, or by reason that the dealer was a trustee of the property for, a person (other than an excluded person in relation to the dealer); and (c) as at the first‑mentioned time, the obligations of the dealer, or of a member organisation in which the dealer is a partner, as the case requires, to the person in respect of the property have not been discharged; the person may make a claim in respect of the property. (2) Where a person makes a claim in respect of property and, at a particular time, the Board is satisfied that: (a) by reason of a dealer having become insolvent, this Division entitles the claimant to make the claim; and (b) as at that time, the obligations of the dealer, or of a member organisation in which the dealer is a partner, as the case requires, to the claimant in respect of the property have not been discharged; the Corporation shall allow the claim and: (c) if the property is, or includes, money—pay to the claimant an amount equal to the amount of that money; and (d) if the property is, or includes, property other than money—subject to subsection (3) and section 122S, supply the last‑mentioned property to the claimant. (3) Where: (a) the Corporation allows a claim that, by reason of a dealer having become insolvent, this Division entitles a person to make in respect of property that is, or includes, a number of securities of a particular kind or documents of title to a number of securities of a particular kind; and (b) it is not reasonably practicable for the Corporation to obtain those securities, or those documents of title to securities, as the case may be, from the dealer or, if the dealer has disposed of them, from the dealer’s successor in title, before the end of: (i) if the business rules of a participating exchange of which the dealer is a member, being those business rules as in force when the Board allows the claim, prescribe a period, for the purposes of this section, in relation to a class of claims that includes that claim—that period; or (ii) otherwise—such period as the Board, having regard to all the circumstances relating to the claim, considers reasonable; the Corporation shall, subject to section 122S, supply to the person, instead of those securities, or those documents of title to securities, that number of securities of that kind, or documents of title to that number of securities of that kind, as the case may be. ##### 122S Cash settlement of claims where property unobtainable (1) Where: (a) the Corporation allows a claim that, by reason of a dealer having become insolvent, this Division entitles a person to make in respect of property that is, or includes, a number of securities of a particular kind or documents of title to a number of securities of a particular kind; (b) it is not reasonably practicable for the Corporation to obtain those securities, or those documents of title to securities, as the case may be, from the dealer or, if the dealer has disposed of them, from the dealer’s successor in title, before the end of: (i) if the business rules of a participating exchange of which the dealer is a member, being those business rules as in force when the Board allows the claim, prescribe a period, for the purposes of this section, in relation to a class of claims that includes the claim—that period; or (ii) otherwise—such period as the Board, having regard to all the circumstances relating to the claim, considers reasonable; and (c) because: (i) whether by reason that dealing in securities of that kind is suspended or for any other reason, there exists at no time during that period an orderly market in such securities; or (ii) the total number of securities of that kind offered for sale on stock markets of participating exchanges or Exchange subsidiaries at times during that period when there exists an orderly market in such securities is insufficient; it is not reasonably practicable for the Corporation to obtain that number of securities of that kind, or documents of title to that number of securities of that kind, as the case may be, before the end of that period; the Board may determine to pay to the claimant the amount that, as at the time when the determination is made, is the amount of the actual pecuniary loss suffered by the claimant in respect of the first‑ mentioned securities, or the first‑mentioned documents of title, as the case may be, and if the Board does so, the Corporation shall pay that amount to the claimant. (2) Where: (a) the Board allows a claim that, by reason of a dealer having become insolvent, this Division entitles a person to make in respect of property that is, or includes, property (in this subsection referred to as the relevant property) other than money, securities or documents of title to securities; and (b) it is not reasonably practicable for the Corporation to obtain the relevant property from the dealer or, if the dealer has disposed of it, from the dealer’s successor in title, before the end of such period as the Board considers reasonable; the Board may determine to pay to the claimant the amount that, as at the time when the determination is made, is the amount of the actual pecuniary loss suffered by the claimant in respect of the relevant property, and if the Board does so, the Corporation shall pay that amount to the claimant. ##### 122T Ordering of alternative claims and prevention of double recovery (1) Where: (a) a member organisation has received, pursuant to the agreement for a sale or purchase of securities by the member organisation on behalf of a person, the consideration for the sale or settlement documents in relation to the purchase, as the case may be; and (b) subsection 122L(1) or 122M(1), as the case may be, entitles the person to make a claim against the Corporation under Division 6 in respect of the sale or purchase; subsection (2) has effect. (2) This Division does not, by reason of: (a) a dealer, being the member organisation or a partner in the member organisation, having become insolvent at a particular time; and (b) the member organisation having received, pursuant to the agreement, the consideration or the settlement documents; entitle the person to make a claim in respect of the consideration or the settlement documents, as the case may be, unless the member organisation’s obligations to the person in respect of the sale or purchase, as the case may be, in so far as those obligations related to the consideration or the settlement documents, were discharged before that time. (3) Where: (a) by reason of a dealer having become insolvent on a particular day, this Division entitles a person to make a claim (in this subsection referred to as the first claim) in respect of property; and (b) by reason of a dealer having become insolvent on a later day, this Division entitles the person to make another claim in respect of the property; the Corporation shall not allow the other claim unless: (c) the person has made the first claim and the Corporation has allowed or disallowed it; (d) the Board is satisfied that if the first claim had been made the Corporation would have disallowed it; or (e) the Board is satisfied that, when the person first became aware of the dealer referred to in paragraph (b) having become insolvent on the later day: (i) the first claim was barred; or (ii) it was no longer reasonably practicable for the person to make the first claim before it became barred. (4) Where: (a) at a particular time, the Corporation allows a claim made by a person under this Division in respect of property; and (b) by reason of: (i) a dealer having become insolvent (whether before, at or after that time); and (ii) the property having, before that time, been entrusted or received as mentioned in paragraph 122R(1)(b); this Division entitles the person to make another claim in respect of the property; the Corporation shall not allow the other claim. ##### 122U No claim in respect of money lent to dealer Where, as at the time when a dealer becomes insolvent: (a) a person has lent money to the dealer; and (b) the liability of the dealer to repay the money remains undischarged; this Division does not, by reason of the dealer having become insolvent at that time, entitle the person to make a claim in respect of the money. ##### 122V No claim in certain other cases (1) This Division does not, by reason of a person having become insolvent on a particular day, entitle a person to make a claim in respect of property unless the first‑mentioned person was on that day a member of a participating exchange and: (a) if on that day the first‑mentioned person 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 first‑mentioned person carried on (whether on his, her or its own account or in partnership) before that day was carried on in the Territory. (2) This Division does not, by reason of a dealer having become insolvent on a particular day, entitle a person to make a claim in respect of property if: (a) before that day the property had, in due course of the administration of a trust, ceased to be under the sole control of the dealer; or (b) the Board, or the Court, is satisfied that circumstances that materially contributed to the dealer becoming insolvent on that day were due to, or caused directly or indirectly by, an act or omission of the person. ##### 122W Limits of compensation (1) The total of the amounts paid out of the Fund in connection with claims that: (a) by reason of: (i) unless subparagraph (ii) applies—a dealer having become insolvent on a particular day; or (ii) if 2 or more partners in the same member organisation have become insolvent on a particular day—those partners having become insolvent on that day; this Division entitles persons to make; and (b) are allowed by the Corporation; shall not exceed an amount equal to 14% of the minimum amount of the Fund as at the end of that day. (2) The amount, or the total of the amounts, paid out of the Fund in connection with a claim or claims that: (a) by reason of: (i) unless subparagraph (ii) applies—a dealer having become insolvent on a particular day; or (ii) if 2 or more partners in the same member organisation have become insolvent on a particular day—those partners having become insolvent on that day; this Division entitles a person to make; and (b) is or are allowed by the Corporation; shall not exceed: (c) if, as at the end of that day, an amount greater than $50,000 is prescribed for the purposes of this subsection—that amount; or (d) in any other case—$50,000. (3) In determining, for the purposes of subsection (1) or (2), the amount, or the total of the amounts, paid out of the Fund in connection with a claim or claims in respect of property: (a) an amount paid out of the Fund in connection with the claim or any of the claims shall, to the extent to which it is repaid to the Fund, be disregarded; and (b) where, by virtue of the exercise of a right or remedy in relation to property that is, or is included in, the first‑ mentioned property, being a right or remedy of the claimant, or of any of the claimants, to which the Corporation is to be deemed, by virtue of section 122ZA, to be subrogated, money or other property has been recovered by, or on behalf of, the Corporation—so much of the amount, or of the total of the amounts, paid out of the Fund in connection with the claim or claims as does not exceed: (i) the amount of that money; or (ii) the value of so much (if any) of that other property as has not been, and is not required to be, supplied under subsection 122R(2) in respect of the claim or any of the claims; as the case may be, shall be disregarded. (4) In order to ensure compliance with subsections (1) and (2) as they apply in relation to a particular claim or particular claims: (a) the Board may, in relation to that claim, or in relation to each of those claims, as the case may be, determine in writing an amount to be the maximum amount in relation to the claim; and (b) where paragraph (a) empowers the Board to make determinations in relation to the respective claims of 2 or more claimants—the Board shall, in making those determinations: (i) take into account, in relation to each of those claimants, any money or other property that the claimant has received, or is likely to receive, from sources other than the Fund as compensation for property to which the claimant’s claim relates; and (ii) endeavour to ensure that the proportion of the property to which a claim relates that is represented by the money and other property received from all sources (including the Fund) as compensation for property to which the claim relates is, as nearly as practicable, the same for each of those claimants. (5) Where a determination of an amount as the maximum amount in relation to a claim is in force under subsection (4), the amount, or the total of the amounts, paid out of the Fund in connection with the claim shall not exceed the first‑mentioned amount. (6) In this section, claim means a claim under this Division. ##### 122X Making of claims (1) The Corporation may cause to be published in a daily newspaper circulating generally in the Territory (and if, in any State or other Territory, that newspaper does not circulate generally, in a newspaper that does so circulate in that State or other Territory) a notice in the prescribed form specifying a day, not being earlier than 3 months after the publication of the notice, on or before which claims against the Corporation may be made, being claims that, by reason of a dealer specified in the notice having become insolvent, this Division entitles persons to make. (2) Where, by reason of a dealer having become insolvent on a particular day, this Division entitles a person to make a claim, the claim shall be in writing and shall be served on the Corporation: (a) in a case where there has been published in accordance with subsection (1) a notice specifying a day on or before which claims may be made, being claims that, by reason of the dealer having become insolvent on that day, this Division entitles persons to make—on or before that day; or (b) in any other case—within 6 months after the person becomes aware of the dealer having become insolvent on that day. (3) A claim that is not made in accordance with subsection (2) is barred unless the Board otherwise determines. (4) It is a defence to an action for damages against the Corporation, a member of the Board, or an employee of, or a person acting on behalf of, the Corporation, in respect of the publication of a notice under subsection (1), if the defendant establishes that the notice was published in good faith and for the purposes of this section. ### Division 8—Claims generally ##### 122YA Power of Corporation to allow and settle claim Subject to this Part, the Corporation may, at any time after a person becomes entitled to make a claim, allow and settle the claim. ##### 122YB Successful claimant entitled to costs and disbursements Where a claim is allowed, then, in addition to the claimant’s other rights under this Part, the claimant is entitled to be paid out of the Fund an amount equal to the total of the reasonable costs of, and the reasonable disbursements incidental to, the making and proof of the claim. ##### 122YC Interest (1) In addition to an amount that is payable to a person out of the Fund in respect of a claim, interest at the rate of 5% per annum or, if another rate is prescribed, at that other rate, is payable to the person out of the Fund, on so much of that amount as is not attributable to costs and disbursements, in respect of the period beginning on the day on which the person became entitled to make the claim and ending on: (a) unless paragraph (b) or (c) applies—the day on which that amount is paid to the person; (b) if the Board has made a determination under subsection 122ZD(1) to pay that amount in instalments—the day on which that amount would, if no such determination had been made and the money in the Fund were unlimited, have been paid to the person; or (c) if, because of insufficiency of the Fund, no part of that amount is paid to the person on the day on which that amount would, if the money in the Fund were unlimited, have been so paid—the last‑mentioned day. (2) Where: (a) under subsection (1), interest is payable to a person on an amount in respect of a period; and (b) that amount, or a part of that amount, remains unpaid throughout a period commencing immediately after the period referred to in paragraph (a); then, in addition to that amount and that interest, interest at the prescribed rate is payable to the person out of the Fund on that amount, or on that part of that amount, as the case may be, in respect of the period first referred to in paragraph (b). ##### 122YD Application of Fund in respect of certain claims (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). (3) Where: (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. (4) In this section: > claim means a claim under Division 6, 6A or 7. ##### 122YE Allowing of claim not to constitute admission Where the Corporation allows a claim, neither the allowing of the claim, nor any act done by the Corporation as a result of allowing the claim, shall be taken for any purpose to constitute an admission by any person of liability in respect of any matter, other than an admission by the Corporation of its liability in respect of the claim. ##### 122YF Corporation to notify claimant where claim disallowed The Corporation shall, after wholly or partly disallowing a claim, serve on the claimant, or on the claimant’s solicitor, notice of the disallowance in the prescribed form. ##### 122YG Proceedings in the Court (1) Where the Corporation has disallowed a claim, the claimant may, within 3 months after notice of the disallowance has been served on the claimant, or on the claimant’s solicitor, in accordance with section 122YF, commence proceedings in the Court to establish the claim. (2) Where, as at the end of a reasonable period after a claim was made, the Corporation has neither allowed nor disallowed the claim, the claimant may commence proceedings in the Court to establish the claim. ##### 122YH Arbitration of amount of cash settlement of certain claims (1) Where: (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 (b) that amount cannot be determined by agreement between the Corporation and the person; that amount shall be determined by arbitration in accordance with this section. (2) The reference to arbitration shall be made to persons appointed, in accordance with subsection (3), for the purposes of the reference and the law in force in the Territory relating to arbitration applies in relation to the reference. (3) The participating exchange shall appoint, or the participating exchanges shall jointly appoint, as the case requires, for the purposes of the reference to arbitration, 3 persons whose appointment under this subsection has been approved in writing by the Ministerial Council and at least 2 of whom are neither members of a participating exchange nor officers or employees of the Corporation, of a participating exchange, or of a member organisation of a participating exchange. ##### 122YJ Form of order of Court establishing claim (1) Where, in a proceeding to establish a claim, the Court is satisfied that the claim should be allowed, the Court: (a) shall, by order, make a declaration accordingly and direct the Corporation to allow the claim and deal with it in accordance with this Act; and (b) may, at any time after making the order, give, upon application made by the claimant or the Corporation, such directions relating to the claim as the Court thinks fit. (2) In a proceeding to establish a claim, or in an application under paragraph (1)(b), all questions of costs are in the discretion of the Court. ##### 122YK Power of Board to require production of securities etc. (1) The Board may, by notice in writing served on a person, require the person to furnish to the Corporation specified securities, documents, or statements of evidence, necessary to support a claim or necessary for the purpose of: (a) exercising the Corporation’s rights against a member, or a member organisation, of a participating exchange or against any other person; or (b) enabling criminal proceedings to be taken against a person. (2) Where a person fails, without reasonable excuse, to comply with a requirement under subsection (1), the Corporation may disallow a claim made by the person. ##### 122ZA Subrogation of Corporation to claimant’s rights etc. (1) Where the Corporation: (a) allows under subsection 122J(2) or 122L(2) a claim made under Division 6 in respect of a sale of securities; or (b) allows under subsection 122K(2) or 122M(2) a claim made under Division 6 in respect of a purchase of securities; the Corporation is subrogated to all the claimant’s rights and remedies in relation to the sale or purchase, as the case may be. (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. (2) Where the Corporation allows a claim made under Division 7 in respect of property, the Corporation is subrogated to all the claimant’s rights and remedies in relation to the property. (3) Where, by virtue of this section, the Corporation is subrogated to a right or remedy that a person has against another person, then: (a) if the Corporation has reason to believe that an insurer may be liable to indemnify the other person in respect of the subject matter of the right or remedy—the Corporation shall serve a notice on the insurer setting out particulars of the right or remedy and stating that the Corporation is, by virtue of this section, subrogated to the right or remedy; (b) an insurer that considers that it may be liable so to indemnify the other person may, whether or not the Corporation has served a notice on the insurer pursuant to paragraph (a), apply to be joined as a party to a proceeding that relates to the right or remedy and to which the first‑mentioned person or the Corporation is a party; and (c) the first‑mentioned person or the Corporation may, to the extent of the liability of an insurer so to indemnify the other person, enforce against the insurer a judgment or order obtained in such a proceeding in so far as the proceeding relates to the right or remedy. (4) Except as provided in this section, nothing in this Part affects a right or remedy that a claimant under Division 6, 6A or 7 has against a person other than the Corporation. ##### 122ZB Payment of claims only from Fund Property of the Corporation, other than property forming part of the Fund, is not available to be applied in respect of a claim that has been allowed by the Corporation, whether or not pursuant to an order of the Court. ##### 122ZC Corporation may enter into contracts of insurance or indemnity (1) The Corporation may, in its discretion, enter into a contract with a person carrying on fidelity insurance business whereby the Corporation will be insured or indemnified, to the extent and in the manner provided by the contract, against liability in respect of claims. (2) A contract entered into under subsection (1) may relate to dealers generally, particular classes of dealers specified in the contract, particular dealers so specified, or dealers generally with the exclusion of particular classes of dealers, or particular dealers, so specified. (3) An action does not lie against the Corporation, a participating exchange, a member of the Board, or an employee of the Corporation or of a participating exchange, for damage alleged to have been suffered by a dealer because of the publication in good faith of a statement that a contract entered into under subsection (1) does or does not apply with respect to that dealer. (4) Where the Corporation has entered into a contract of insurance or indemnity with an insurer under this section, a person who has made a claim has neither a right of action against the insurer in respect of the contract, nor a right or claim in respect of money paid by the insurer in accordance with the contract. (5) In this section, dealer means a member, or a member organisation, of a participating exchange. ##### 122ZD Instalment payments (1) Where, at a particular time, the Board is of the opinion that if all the amounts that, as at that time, are payable out of the Fund in connection with claims were so paid, the Fund would be exhausted or substantially depleted, the Board may determine in writing that amounts so payable as at that time shall be so paid in instalments of specified amounts payable on specified days. (2) In subsection (1), claim means a claim under Division 6, 6A or 7 or a claim that, for the purposes of Division 9, is a transferred claim in relation to a transferring exchange. (3) A determination under subsection (1) has effect subject to subsection 122CD(3). ### Division 9—Transitional ##### 122ZE Interpretation In this Division, unless the contrary intention appears: > founding exchange means a securities exchange that, at the end of the nomination day, is a local Exchange subsidiary or a participating exchange. > joining exchange means a securities exchange that: (a) at a particular time after the nomination day, becomes a local Exchange subsidiary or a participating exchange; and (b) was not, immediately before that time, a participating exchange, or a local Exchange subsidiary, > as the case may be. > liability provisions means: (a) sections 111 to 120, inclusive; or (b) sections 111 to 120, inclusive, as they have effect by virtue of subsection 36P(4) or (6); as the case requires. > nomination day means the day on which the Ministerial Council first makes a nomination under subsection 122BA(1). > transfer day, in relation to a transferring exchange, means: (a) in the case of a founding exchange—the nomination day; or (b) in the case of a joining exchange—the day on which the joining exchange became a local Exchange subsidiary, or a participating exchange, as the case requires. > transferred claim, in relation to a transferring exchange, means: (a) a claim made, before the transfer day in relation to the transferring exchange, for compensation from the transferring exchange’s fidelity fund; (b) a claim that, as at the time immediately before the transfer day in relation to the transferring exchange, the liability provisions entitled a person to make for compensation from the transferring exchange’s fidelity fund, but that, as at that time, had not been made; or (c) a claim that purports to be a claim of a kind referred to in paragraph (b). > transferring exchange means a founding exchange or a joining exchange. ##### 122ZF Assets and liabilities of transferring exchange’s fidelity fund (1) The money that at the end of the transfer day in relation to a transferring exchange was in the transferring exchange’s fidelity fund shall, as soon as practicable after that day, be paid out of that fidelity fund and into the Fund. (2) At the beginning of the next day after the transfer day in relation to a transferring exchange: (a) the investments and other property of the transferring exchange’s fidelity fund that at the end of the transfer day were vested in the transferring exchange vest in the Corporation and become part of the Fund; (b) the rights that at the end of the transfer day the transferring exchange had, whether under or by virtue of Part IX or otherwise, in connection with the administration of the transferring exchange’s fidelity fund vest in the Corporation; and (c) the Corporation becomes liable to pay and discharge the debts, liabilities and obligations of the transferring exchange that arose, whether under or by virtue of Part IX or otherwise, in connection with the administration of the transferring exchange’s fidelity fund and that existed at the end of the transfer day. (3) A reference in subsection (2) to rights or to debts, liabilities and obligations does not include a reference to rights, or to debts, liabilities and obligations, as the case may be, arising under a contract of employment or under a contract for services. (4) Investments that at the end of the transfer day in relation to a transferring exchange were held, by a person other than the transferring exchange, for the purposes of the transferring exchange’s fidelity fund are held after that day for the purposes of the Fund. (5) After the transfer day in relation to a transferring exchange, an agreement or arrangement (other than a contract of employment or a contract for services) that was entered into: (a) by or on behalf of the transferring exchange as a party; and (b) in connection with the administration of the transferring exchange’s fidelity fund; and was in force at the end of that day has effect, with such modifications as the circumstances require, as if: (c) the Corporation were substituted for the transferring exchange as a party to the agreement or arrangement; and (d) a reference in the provisions of the agreement or arrangement to the transferring exchange were, except in relation to a time on or before that day, a reference to the Corporation. (6) Without limiting the generality of another provision of this section, where, as at the end of the transfer day in relation to a transferring exchange, an amount advanced under subsection 109(1) by the transferring exchange to its fidelity fund had not been repaid, an amount equal to the first‑mentioned amount is, after that day, payable, on demand, by the Corporation to the transferring exchange. (7) Where, at the end of the transfer day in relation to a transferring exchange, proceedings: (a) to which the transferring exchange was a party; and (b) that arose out of, or were otherwise connected with, the administration of the transferring exchange’s fidelity fund; were pending in a court or tribunal, the Corporation is, at the beginning of the next day after the transfer day, substituted for the transferring exchange as a party to the proceedings and has the same rights in the proceedings as the party for which it was substituted. (8) An amount that, as a result of the operation of this section, is or becomes payable by the Corporation is payable out of the Fund. (9) This section has effect subject to section 122ZH. ##### 122ZG Final accounts in respect of transferring exchange’s fidelity fund (1) A transferring exchange shall, as soon as practicable, and in any event within 2 months, after the transfer day in relation to the transferring exchange: (a) cause to be prepared a statement of the assets and liabilities of its fidelity fund as on that day; and (b) appoint a registered company auditor to audit the statement. (2) Without limiting the generality of subsection (1), a statement prepared under that subsection shall set out full particulars, so far as known when the statement is prepared, of all liabilities (including contingent liabilities) of the transferring exchange’s fidelity fund in respect of transferred claims. (3) An auditor appointed to audit a statement prepared under subsection (1) in relation to a transferring exchange’s fidelity fund shall, within 1 month after the statement is prepared: (a) audit the statement; and (b) cause a report on the statement to be laid before the Board and a copy of the report to be given to the committee of the transferring exchange. (4) The Board shall give to the Commission a copy of a report laid before the Board under this section, and a copy of the statement to which the report relates, within 14 days after the report is laid before the Board. ##### 122ZH Application of liability provisions in relation to transferred claims On and after the transfer day in relation to a transferring exchange, the liability provisions have effect, for the purposes of a transferred claim in relation to the transferring exchange, as if, except in relation to a time before that day: (a) a reference in those provisions to the fidelity fund of a securities exchange were a reference to the Fund; (b) a reference in those provisions to the committee of a securities exchange were a reference to the Board; and (c) a reference in those provisions to a securities exchange were a reference to the Corporation; and with such other modifications as the circumstances require. ## Part X—Trading in securities ##### 123 Stock market manipulation (1) A person shall not, whether within or outside the Territory, effect, take part in, be concerned in or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of raising the price of securities of the body corporate on a stock market in the Territory, with intent to induce other persons to purchase or subscribe for securities of the body corporate or of a related body corporate. (2) A person shall not, whether within or outside the Territory, effect, take part in, be concerned in or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of lowering the price of securities of the body corporate on a stock market in the Territory, with intent to induce other persons to sell securities of the body corporate or of a related body corporate. (3) A person shall not, whether within or outside the Territory, effect, take part in, be concerned in or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of maintaining or stabilizing the price of securities of the body corporate on a stock market in the Territory, with intent to induce other persons to sell, purchase or subscribe for securities of the body corporate or of a related body corporate. (4) A reference in this section to a transaction, in relation to securities of a body corporate, includes: (a) a reference to the making of an offer to sell or purchase such securities of the body corporate; and (b) a reference to the making of an invitation, however expressed, that expressly or impliedly invites a person to offer to sell or purchase such securities of the body corporate. ##### 124 False trading and market rigging transactions (1) A person shall not, whether within or outside the Territory, create, or cause to be created, or do anything that is calculated to create, a false or misleading appearance of active trading in any securities on a stock market in the Territory or a false or misleading appearance with respect to the market for, or the price of, any such securities. (2) A person shall not, by means of purchases or sales of any securities that do not involve a change in the beneficial ownership of those securities, or by any fictitious transactions or devices, maintain, inflate, depress, or cause fluctuations in, the market price of any securities. (3) Without affecting the generality of subsection (1), a person who: (a) effects, takes part in, is concerned in or carries out, either directly or indirectly, any transaction of sale or purchase of any securities, being a transaction that does not involve any change in the beneficial ownership of the securities; (b) makes or causes to be made an offer to sell any securities at a specified price where he has made or caused to be made or proposes to make or to cause to be made, or knows that a person associated with him has made or caused to be made or proposes to make or to cause to be made, an offer to purchase the same number, or substantially the same number, of securities at a price that is substantially the same as the first‑mentioned price; or (c) makes or causes to be made an offer to purchase any securities at a specified price where he has made or caused to be made or proposes to make or to cause to be made, or knows that a person associated with him has made or caused to be made or proposes to make or to cause to be made, an offer to sell the same number, or substantially the same number, of securities at a price that is substantially the same as the first‑mentioned price; shall be deemed to have created a false or misleading appearance of active trading in securities on a stock market. (4) In a prosecution of a person for an act referred to in subsection (3), it is a defence if the defendant establishes that the purpose or purposes for which he did the act was not, or did not include, the purpose of creating a false or misleading appearance of active trading in securities on a stock market. (5) A purchase or sale of securities does not involve a change in the beneficial ownership for the purposes of this section if a person who had an interest in the securities before the purchase or sale, or a person associated with the first‑mentioned person in relation to those securities, has an interest in the securities after the purchase or sale. (6) In a prosecution for an offence against subsection (2) in relation to a purchase or sale of securities that did not involve a change in the beneficial ownership of those securities, it is a defence if the defendant establishes that the purpose or purposes for which he purchased or sold the securities was not, or did not include, the purpose of creating a false or misleading appearance with respect to the market for, or the price of, securities. (7) The reference in paragraph (3)(a) to a transaction of sale or purchase of securities includes: (a) a reference to the making of an offer to sell or purchase securities; and (b) a reference to the making of an invitation, however expressed, that expressly or impliedly invites a person to offer to sell or purchase securities. ##### 125 False or misleading statements etc. A person shall not make a statement, or disseminate information, that is false or misleading in a material particular and is likely to induce the sale or purchase of securities by other persons or is likely to have the effect of raising, lowering, maintaining or stabilizing the market price of securities if, when he makes the statement or disseminates the information: (a) he does not care whether the statement or information is true or false; or (b) he knows or ought reasonably to have known that the statement or information is false or misleading in a material particular. ##### 126 Fraudulently inducing persons to deal in securities (1) A person shall not: (a) by making or publishing any statement, promise or forecast that he knows to be misleading, false or deceptive; (b) by any dishonest concealment of material facts; (c) by the reckless making or publishing (dishonestly or otherwise) of any statement, promise or forecast that is misleading, false or deceptive; or (d) by recording or storing in, or by means of, any mechanical, electronic or other device information that he knows to be false or misleading in a material particular; induce or attempt to induce another person to deal in securities. (2) It is a defence to a prosecution for an offence under subsection (1) constituted by recording or storing information as mentioned in paragraph (1)(d) if it is established that, at the time when the defendant so recorded or stored the information, he had no reasonable grounds for expecting that the information would be available to any other person. ##### 127 Dissemination of information about illegal transactions A person shall not circulate or disseminate, or authorize or be concerned in the circulation or dissemination of, any statement or information to the effect that the price of any securities of a body corporate will or is likely to rise or fall or be maintained by reason of any transaction entered into or other act or thing done in relation to securities of that body corporate, or of a body corporate that is related to that body corporate, in contravention of section 123, 124, 125 or 126 if: (a) the person, or a person associated with the person, has entered into any such transaction or done any such act or thing; or (b) the person has received, or expects to receive, directly or indirectly, any consideration or benefit for circulating or disseminating, or authorizing or being concerned in the circulation or dissemination of, the statement or information. ##### 128 Prohibition of dealings in securities by insiders (1) A person who is, or at any time in the preceding 6 months has been, connected with a body corporate shall not deal in any securities of that body corporate if by reason of his so being, or having been, connected with that body corporate he is in possession of information that is not generally available but, if it were, would be likely materially to affect the price of those securities. (2) A person who is, or at any time in the preceding 6 months has been, connected with a body corporate shall not deal in any securities of any body corporate if by reason of his so being, or having been, connected with the first‑mentioned body corporate he is in possession of information that: (a) is not generally available but, if it were, would be likely materially to affect the price of those securities; and (b) relates to any transaction (actual or expected) involving both those bodies corporate or involving one of them and securities of the other. (3) Where a person is in possession of any such information as is mentioned in subsection (1) or (2) that if generally available would be likely materially to affect the price of securities but is not precluded by either of those subsections from dealing in those securities, he shall not deal in those securities if: (a) he has obtained the information, directly or indirectly, from another person and is aware, or ought reasonably to be aware, of facts or circumstances by virtue of which that other person is then himself precluded by subsection (1) or (2) from dealing in those securities; and (b) when the information was so obtained, he was associated with that other person or had with him an arrangement for the communication of information of a kind to which those subsections apply with a view to dealing in securities by himself and that other person or either of them. (4) A person shall not, at any time when he is precluded by subsection (1), (2) or (3) from dealing in any securities, cause or procure any other person to deal in those securities. (5) A person shall not, at any time when he is precluded by subsection (1), (2) or (3) from dealing in any securities by reason of his being in possession of any information, communicate that information to any other person if: (a) trading in those securities is permitted on a stock market, whether within or outside the Territory; and (b) he knows, or ought reasonably to know, that the other person will make use of the information for the purpose of dealing, or causing or procuring another person to deal, in those securities. (6) Without prejudice to subsection (3) but subject to subsections (7) and (7A), a body corporate shall not deal in any securities at a time when any officer of that body corporate is precluded by subsection (1), (2) or (3) from dealing in those securities. (7) A body corporate is not precluded by subsection (6) from entering into a transaction at any time by reason only of information in the possession of an officer of that body corporate if: (a) the decision to enter into the transaction was taken on its behalf by a person other than the officer; (b) it had in operation at that time arrangements to ensure that the information was not communicated to that person and that no advice with respect to the transaction was given to him by a person in possession of the information; and (c) the information was not so communicated and such advice was not so given. (7A) A body corporate is not precluded by subsection (6) from dealing in securities of another body corporate at any time by reason only of information in the possession of an officer of that first‑mentioned body corporate, being information that was obtained by the officer in the course of the performance of his duties as an officer of that first‑mentioned body corporate and that relates only to proposed dealings by that first‑mentioned body corporate in securities of that other body corporate. (8) For the purposes of this section, a person is connected with a body corporate if, being a natural person: (a) he is an officer of that body corporate or of a related body corporate; (b) he is a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act 1981 in that body corporate or in a related body corporate; or (c) he occupies a position that may reasonably be expected to give him access to information of a kind to which subsections (1) and (2) apply by virtue of: (i) any professional or business relationship existing between himself (or his employer or a body corporate of which he is an officer) and that body corporate or a related body corporate; or (ii) his being an officer of a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act 1981 in that body corporate or in a related body corporate. (9) This section does not preclude the holder of a dealers licence from dealing in securities, or rights or interests in securities, of a body corporate, being securities or rights or interests that are permitted by a securities exchange to be traded on the stock market of that securities exchange, if: (a) the holder of the licence enters into the transaction concerned as agent for another person pursuant to a specific instruction by that other person to effect that transaction; (b) the holder of the licence has not given any advice to the other person in relation to dealing in securities, or rights or interests in securities, of that body corporate that are included in the same class as the first‑mentioned securities; and (c) the other person is not associated with the holder of the licence. (10) Where a prosecution is instituted against a person for an offence by reason that the person was in possession of certain information and entered into a transaction in contravention of this section, it is a defence if the person satisfies the court that the other party to the transaction knew, or ought reasonably to have known, of the information before entering into the transaction. (11) For the purposes of subsection (8), officer, in relation to a body corporate, includes: (a) a director, secretary, executive officer or employee of the body corporate; (b) a receiver, or a receiver or manager, of property of the body corporate; (c) an official manager or a deputy official manager of the body corporate; (d) a liquidator of the body corporate; and (e) a trustee or other person administering a compromise or arrangement made between the body corporate and another person or other persons. ##### 129 Penalties A person who contravenes section 123, 124, 125, 126, 127 or 128 is guilty of an offence. Penalty: (a) in the case of a person not being a body corporate—$20,000 or imprisonment for 5 years, or both; or (b) in the case of a person being a body corporate—$50,000. ##### 130 Compensation for loss etc. (1) Where: (a) a person who is in possession of any such information as is mentioned in subsection 128(1) or (2) in respect of any securities deals in those securities in contravention of subsection 128(1), (2) or (3) or causes or procures another person to deal in those securities in contravention of subsection 128(4); or (b) a person being a body corporate deals in securities in contravention of subsection 128(6) at a time when an officer of the body corporate was in possession of any such information as is mentioned in subsection 128(1) or (2); that person is liable (whether he has been convicted of an offence in respect of the contravention or not): (c) to compensate any other party to the transaction who was not in possession of that information for any loss sustained by that party by reason of any difference between the price at which the securities were dealt in in that transaction and the price at which they would have been likely to have been dealt in in such a transaction at the time when the first‑mentioned transaction took place if that information had been generally available; and (d) to account to the body corporate that issued or made available those securities for any profit accruing to the first‑mentioned person from dealing in those securities. (2) A person who contravenes section 123, 124, 125, 126 or 127 (whether he has been convicted of an offence in respect of the contravention or not) is liable to pay compensation to any other person who, in a transaction for the sale or purchase of securities entered into with the first‑mentioned person or with a person acting for or on behalf of the first‑mentioned person, suffers loss by reason of the difference between the price at which the securities were dealt in in that transaction and the price at which they would have been likely to have been dealt in in such a transaction at the time when the first‑mentioned transaction took place if the contravention had not occurred. (3) The amount of compensation for which a person is liable under subsection (1) or (2) or the amount of the profit for which a person is liable to account under subsection (1) is: (a) in a case to which paragraph (b) does not apply—the amount of the loss sustained by the person claiming the compensation or the amount of the profit referred to in paragraph (1)(d), as the case may be; or (b) if the first‑mentioned person has been found by a court to be liable, or has been ordered by a court, to pay an amount or amounts to any other person or persons under this Part or under subsection 229(6) of the Companies Act 1981 or under a corresponding provision of a previous law of the Territory by reason of the same act or transaction—the amount of that loss or profit less the amount or the sum of the amounts that the first‑mentioned person has been so found to be liable, or has been so ordered, to pay. (4) For the purposes of subsection (3), the onus of proving that the liability of a person to pay an amount to another person arose from the same act or transaction from which another liability arose lies on the person liable to pay the amount. (5) An action under this section for recovery of a loss or profit shall not be commenced after the expiration of 2 years after the date of completion of the transaction in which the loss or profit occurred. (6) The Commission may, if the Commission considers it to be in the public interest to do so, bring an action in the name of and for the benefit of the body corporate or other person for recovery of a loss or profit referred to in subsection (1) or (2). (7) Nothing in subsection (1) or (2) affects any liability that a person may incur under any other law. (8) For the purposes of paragraph (1)(b), officer, in relation to a body corporate, includes: (a) a director, secretary, executive officer or employee of the body corporate; (b) a receiver, or a receiver and manager, of the property or any part of the property of the body corporate; (c) an official manager or a deputy official manager of the body corporate; (d) a liquidator of the body corporate; and (e) a trustee or other person administering a compromise or arrangement made between the body corporate and another person or other persons. ##### 131 Dealer to give priority to clients’ orders (1) A dealer shall not, except as permitted by subsection (2), enter into, as principal or on behalf of a person associated with him, a transaction of purchase or sale of securities that are permitted to be traded on the stock market of a securities exchange if a client of the dealer who is not associated with the dealer has instructed the dealer to purchase or sell, respectively, securities of the same class and the dealer has not complied with the instruction. Penalty: $2,500 or imprisonment for 6 months, or both. (2) Subsection (1) does not apply in relation to the entering into of a transaction by a dealer as principal or on behalf of a person associated with him if: (a) the instructions from the client of the dealer required the purchase or sale of securities on behalf of the client to be effected only on specified conditions relating to the price at which the securities were to be purchased or sold and the dealer has been unable to purchase or sell the securities by reason of those conditions; or (b) the transaction is entered into in prescribed circumstances. ##### 132 Dealings by employees of holders of licences (1) A person who is a dealer or an investment adviser and an employee of that person shall not, as principals, jointly purchase or subscribe for, or agree to purchase or subscribe for, any securities. (2) A person who is a partner in a partnership that carries on a business of dealing in securities or a business of advising other persons concerning securities and an employee of the partnership shall not, as principals, jointly purchase or subscribe for, or agree to purchase or subscribe for, any securities. (3) A person who is a partner in a partnership that carries on a business in the course of which advice is given, or analyses or reports are issued or published, concerning securities and an employee of the partnership shall not, as principals, jointly purchase or subscribe for, or agree to purchase or subscribe for, any securities. (4) A person who is a dealer or an investment adviser shall not give credit to an employee of that person or to a person who, to the knowledge of the first‑mentioned person, is associated with such an employee if: (a) the credit is given for the purpose of enabling or assisting the person to whom the credit is given to purchase or subscribe for any securities; or (b) the person giving the credit knows or has reason to believe that the credit will be used for the purpose of purchasing or subscribing for securities. (5) A person who is a partner in a partnership that carries on a business of dealing in securities shall not give credit to an employee of the partnership or to a person who, to the knowledge of the first‑mentioned person, is associated with such an employee if: (a) the credit is given for the purpose of enabling or assisting the person to whom the credit is given to purchase or subscribe for any securities; or (b) the person giving the credit knows or has reason to believe that the credit will be used for the purpose of purchasing or subscribing for securities. (6) A person who is a partner in a partnership that carries on a business in the course of which advice is given, or analyses or reports are issued or published, concerning securities shall not give credit to an employee of the partnership or to a person who, to the knowledge of the first‑mentioned person, is associated with such an employee if: (a) the credit is given for the purpose of enabling or assisting the person to whom the credit is given to purchase or subscribe for any securities; or (b) the person giving the credit knows or has reason to believe that the credit will be used for the purpose of purchasing or subscribing for securities. (7) A person who is an employee of a sole trader or member firm in connection with a business of dealing in securities carried on by the sole trader or member firm shall not, as principal, purchase or agree to purchase any securities or rights or interests in securities unless the sole trader or member firm acts as the agent of the person in respect of the transaction. (8) The references in subsections (1) and (4) to an employee of a person who is a dealer or an investment adviser include, in the case of a body corporate that is a dealer or an investment adviser, references to an officer of the body corporate. (9) The reference in subsection (7) to an employee of a sole trader or member firm includes, in the case of a sole trader that is a body corporate or a member firm a partner in which is a body corporate, a reference to an officer of the body corporate. (10) The penalty for an offence against this section is a fine not exceeding $2,500 or imprisonment for a period not exceeding 6 months, or both. ## Part XI—Miscellaneous ##### 133 Restrictions on use of titles stockbroker, sharebroker and stock exchange (1) A person who is not: (a) a member of a stock exchange; or (b) a person who is a member of, or is a partner in a partnership that is recognized as a member firm by, a stock exchange within the meaning of the corresponding law of a participating State or of a participating Territory; shall not take or use, or by inference adopt, the name or title of stockbroker or sharebroker or take or use or have attached to or exhibited at any place a name, title or description implying or tending to create the belief that he is a stockbroker or a sharebroker. (2) A body corporate that is not: (a) a stock exchange; or (b) a stock exchange within the meaning of the corresponding law of a participating State or of a participating Territory; shall not take or use, or by inference adopt, the name or title of stock exchange or take or use or have attached to or exhibited at any place a name, title or description implying or tending to create the belief that the body corporate is: (c) a stock exchange; or (d) a stock exchange within the meaning of the corresponding law of a participating State or of a participating Territory. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 134 Appeal (1) A person aggrieved by the refusal of the Commission to grant a licence or by the revocation of a licence under section 60 or by any other act or decision of the Commission may appeal to the Court, which may confirm the refusal, revocation, act or decision or give such directions in the matter as seem proper or otherwise determine the matter. (2) This section does not apply to an act or decision of the Commission: (a) in respect of which a provision in the nature of an appeal or review is expressly provided in this Act; or (b) which is declared by this Act to be conclusive or final or is embodied in a document declared by this Act to be conclusive evidence of an act, matter or thing. ##### 135 False or misleading statements (1) A person shall not, in, or in connection with, an application for a licence: (a) make a statement that is false or misleading in a material particular knowing it to be false or misleading; or (b) omit to state any matter or thing knowing that by reason of that omission the application is misleading in a material respect. (2) A person shall not lodge with the Commission for the purposes of this Act a document that contains a statement that to his knowledge is false or misleading. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 136 Preservation and disposal of records etc. (1) A person who is required by a provision of this Act to maintain, make or keep a register or any accounting or other record in relation to a business carried on by him shall preserve that register or record for the prescribed period, whether or not he ceases to carry on that business before the expiration of that period. (2) The prescribed period for the purposes of subsection (1) is: (a) in relation to a register or a record other than an accounting record, the period of 5 years next after the day on which the last entry was made in the register or record; or (b) in relation to an accounting record, the period of 7 years next after the last day of the accounting period to which the record relates. (3) Subsections (1) and (2) do not apply to or in relation to a contract note or copy of a contract note received or issued by a dealer who is a member of a securities exchange if the matters referred to in subsection 64(2) in relation to the contract note are recorded: (a) by the securities exchange; or (b) subject to such conditions (if any) as the Commission imposes, by the dealer; in a manner approved by the Commission and the record of those matters is retained for not less than 5 years. (4) The Commission may, if of the opinion that it is no longer necessary or desirable to retain it, destroy or otherwise dispose of any document that is given to or lodged with the Commission under or for the purposes of this Act and that has been in the possession of the Commission for such period as is prescribed for the purposes of this subsection, either generally or in relation to a particular document or class of documents. ##### 137 Concealing etc. of books relating to securities (1) A person who: (a) conceals, destroys, mutilates or alters a book relating to the business carried on by a dealer or required under this Act to be kept by the holder of a licence or by a financial journalist within the meaning of Part VII; (b) where such a book is in the Territory—sends the book out of the Territory; or (c) where such a book is outside the Territory but is within Australia—sends the book out of Australia; is guilty of an offence. Penalty: $5,000 or imprisonment for 1 year, or both. (2) In a prosecution of a person for an offence under subsection (1), it is a defence if the person proves that he did not act with intent to defraud, to defeat the purposes of this Act or to prevent, delay or obstruct the carrying out of an examination, investigation or audit, or the exercise of a power or authority, under this Act. ##### 138 Falsification of records (1) Where matter that is used or intended to be used in connection with the keeping of a book required to be kept under this Act or a register or any accounting or other record referred to in section 136 is recorded or stored in an illegible form by means of a mechanical device, an electronic device or any other device, a person who: (a) records or stores by means of that device matter that he knows to be false or misleading in a material particular; (b) destroys, removes or falsifies matter that is recorded or stored by means of that device, or has been prepared for the purpose of being recorded or stored, or for use in compiling other matter to be recorded or stored, by means of that device; or (c) fails to record or store matter by means of that device with intent to falsify any entry made or intended to be compiled, wholly or in part, from that matter; is guilty of an offence. Penalty: $5,000 or imprisonment for 1 year, or both. (2) In a prosecution of a person for an offence under subsection (1), it is a defence if the person proves that he acted honestly and that in all the circumstances the act or omission constituting the offence should be excused. ##### 139 Precautions against falsification of records A person required by this Act to keep a book or record shall take reasonable precautions for guarding against falsification of the book or record and for facilitating discovery of any falsification. ##### 140 Obstructing or hindering Commission etc. A person shall not, without lawful excuse, obstruct or hinder the Commission or another person in the exercise or performance of any of its or his powers, authorities, duties or functions under this Act. ##### 141 General penalty provisions (1) A person who: (a) does an act or thing that he is forbidden to do by or under a provision of this Act; (b) does not do an act or thing that he is required or directed to do by or under a provision of this Act; or (c) otherwise contravenes or fails to comply with a provision of this Act; is, unless that provision or another provision of this Act provides that he is guilty of an offence, guilty of an offence by virtue of this subsection. (2) A person who is guilty of an offence against this Act, whether by virtue of subsection (1) or otherwise, is punishable, upon conviction, by a penalty not exceeding the penalty applicable to the offence. (3) Where: (a) a section that does not consist of 2 or more subsections provides that a person is in circumstances referred to in the section guilty of an offence; or (b) subsection (1) operates in relation to a provision of this Act that is contained in a section that does not consist of 2 or more subsections so as to make a person guilty of an offence; and a penalty, pecuniary or otherwise, is set out at the foot of the section, the penalty applicable to the offence is the penalty so set out. (4) Where: (a) a subsection of a section that consists of 2 or more subsections provides that a person is in circumstances referred to in the subsections guilty of an offence; or (b) subsection (1) operates in relation to a provision of this Act that is contained in the subsection of a section that consists of 2 or more subsections so as to make a person guilty of an offence; then: (c) if a penalty, pecuniary or otherwise, is set out at the foot of the subsection—the penalty applicable to the offence is the penalty set out at the foot of the subsection; or (d) if a penalty, pecuniary or otherwise, is set out at the foot of the section and no penalty is set out at the foot of the subsection—the penalty applicable to the offence is the penalty set out at the foot of the section. (5) Where each of 2 or more subsections of a section contains one of the following provisions: (a) a provision that a person is in circumstances referred to in the subsection guilty of an offence; (b) a provision in relation to which subsection (1) operates so as to make a person guilty of an offence; and a penalty, pecuniary or otherwise, is set out at the foot of each of those subsections, the penalty applicable in relation to an offence created by either or any of those subsections, or in relation to an offence created by subsection (1) in relation to a provision contained in either or any of those subsections, is the penalty set out at the foot of the subsection concerned. (6) Except as provided by subsections (3), (4) and (5), the penalty applicable in relation to an offence against this Act is a fine of $500. ##### 141A Penalty notices (1) Where the Commission has reason to believe that a person has, whether before or after the commencement of section 147 of the Companies and Securities Legislation (Miscellaneous Amendments) Act 1983, committed a prescribed offence, the Commission may, subject to subsection (2), serve on the person a notice in the prescribed form: (a) alleging that the person has committed the prescribed offence and giving the prescribed particulars in relation to the prescribed offence; (b) setting out the prescribed penalty in respect of the prescribed offence; and (c) stating: (i) in the case of a prescribed offence constituted by a failure to do a particular act or thing: (A) that the obligation to do the act or thing continues notwithstanding the service of the notice or the payment of the prescribed penalty; (B) that if, within the period specified in the notice (being a period that is not less than 21 days), the person pays the prescribed penalty to the authority specified in the notice and does the act or thing, no further action will be taken against the person in relation to the prescribed offence; and (C) that if, at the expiration of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice or has not done the act or thing, proceedings may be instituted against the person; or (ii) in the case of a prescribed offence, not being an offence constituted by a failure to do a particular act or thing: (A) that if, within the period specified in the notice (being a period that is not less than 21 days), the person pays the prescribed penalty to the authority specified in the notice, no further action will be taken against the person in relation to the prescribed offence; and (B) that if, at the expiration of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice, proceedings may be instituted against the person. (2) Subsection (1) does not empower the Commission: (a) to serve on a person more than one notice under that subsection in relation to an alleged commission by that person of a particular prescribed offence; or (b) to serve on a person a notice under that subsection in relation to a prescribed offence unless proceedings could be instituted against that person for that offence in accordance with section 34 of the Companies and Securities (Interpretation and Miscellaneous Provisions) Act 1980. (3) A notice under subsection (1) may be served on a natural person either personally or by post. (4) Where a notice under subsection (1) is served on a person in relation to a prescribed offence constituted by a failure to do a particular act or thing: (a) if, within the period specified in the notice, the person pays the prescribed penalty to the authority specified in the notice, and does the act or thing—no proceedings may be instituted against the person in respect of the prescribed offence; (b) if, at the expiration of the period specified in the notice, the person has paid the prescribed penalty to the authority specified in the notice but has not done the act or thing—no proceedings may be instituted against the person in respect of the prescribed offence, but the obligation to do that act or thing continues, and section 142 applies in relation to the continued failure to do that act or thing as if, on the day on which the person so paid the prescribed penalty, he had been convicted of an offence constituted by a failure to do that act or thing; (c) if, at the expiration of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice but has done the act or thing—proceedings may be instituted against the person in respect of the prescribed offence; or (d) if, at the expiration of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice and has not done the act or thing—the obligation to do that act or thing continues, and proceedings may be instituted against the person in respect of the prescribed offence. (5) Where a notice under subsection (1) is served on a person in relation to a prescribed offence, not being an offence constituted by a failure to do a particular act or thing: (a) if, within the period specified in the notice, the person pays the prescribed penalty to the authority specified in the notice—no proceedings may be instituted against the person in respect of the prescribed offence; or (b) if, at the expiration of the period specified in the notice, the person has not paid the prescribed penalty to the authority specified in the notice—proceedings may be instituted against the person in respect of the prescribed offence. (6) The payment of an amount by a person pursuant to a notice served on the person under this section in relation to a prescribed offence shall not be taken for any purpose to be an admission by that person of any liability in connection with the alleged commission of the prescribed offence. (7) Except as provided by paragraphs (4)(a) and (b) and (5)(a), this section does not affect the operation of any provision of this Act, of the regulations, of the rules or of any other Act in relation to the institution of proceedings in respect of offences that are prescribed offences for the purposes of this section. (8) In this section, authority includes a person. ##### 142 Continuing offences (1) Where: (a) by or under a provision, an act is required to be done within a particular period or before a particular time; (b) failure to do the act within that period or before that time constitutes an offence; and (c) the act is not done within that period or before that time; then: (d) the obligation to do the act continues, notwithstanding that that period has expired or that time has passed, and whether or not a person is convicted of a primary substantive offence in relation to failure to do the act, until the act is done; and (e) subsections (3) and (4) apply. (2) Where: (a) by or under a provision, an act is required to be done but neither a period within which, nor a time before which, the act is to be done is specified; (b) failure to do the act constitutes an offence; and (c) a person is convicted of a primary substantive offence in relation to failure to do the act; then: (d) the obligation to do the act continues, notwithstanding the conviction, until the act is done; and (e) subsections (3) and (4) apply. (3) Where: (a) at a particular time, a person is first convicted of a substantive offence, or is convicted of a second or subsequent substantive offence, in relation to failure to do the act; and (b) the failure to do the act continues after that time; the person is, in relation to failure to do the act, guilty of a further offence in respect of so much of the period throughout which the failure to do the act continues as elapses after that time and before the relevant day in relation to the further offence. (4) Where: (a) a body corporate is guilty of a primary substantive offence in relation to failure to do the act; and (b) throughout a particular period (in this subsection referred to as the relevant period: (i) the failure to do the act continues; (ii) a person (in this subsection referred to as the derivative offender) is in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the failure to do the act; and (iii) the derivative offender is an officer of the body corporate; then: (c) in a case where either or both of the following events occurs or occur: (i) the body corporate is convicted, before or during the relevant period, of the primary substantive offence; (ii) the derivative offender is convicted, before or during the relevant period, of a primary derivative offence in relation to failure to do the act; the derivative offender is, in relation to failure to do the act, guilty of an offence (in this paragraph referred to as the relevant offence) in respect of so much (if any) of the relevant period as elapses: (iii) after the conviction referred to in subparagraph (i) or (ii), or after the earlier of the convictions referred to in subparagraphs (i) and (ii), as the case may be; and (iv) before the relevant day in relation to the relevant offence; and (d) in a case where, at a particular time during the relevant period, the derivative offender is first convicted of a secondary derivative offence, or is convicted of a second or subsequent secondary derivative offence, in relation to failure to do the act—the derivative offender is, in relation to failure to do the act, guilty of a further offence in respect of so much of the relevant period as elapses after that time and before the relevant day in relation to the further offence. (5) Notwithstanding subsection 141(6), where a person is guilty, by virtue of subsection (3) or (4) of this section, of an offence in respect of the whole or a part of a particular period, the penalty applicable to the offence is a fine of the amount obtained by multiplying $50 by the number of days in that period, or in that part of that period, as the case may be. (6) In this section: > act includes thing. > primary derivative offence, in relation to failure to do an act, means an offence (other than an offence of which a person is guilty by virtue of this section) of which a person is guilty by virtue of being an officer of a body corporate who is in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the commission by the body corporate of a primary substantive offence in relation to failure to do the act. > primary substantive offence, in relation to failure to do an act, means an offence (other than an offence of which a person is guilty by virtue of this section) constituted by failure to do the act, or by failure to do the act within a particular period or before a particular time. > provision means a section, or a subsection of a section, of this Act. > relevant day, in relation to an offence of which a person is guilty by virtue of this section, means: (a) in a case where the information relating to the offence specifies a day in relation to the offence for the purposes of this section, being a day not later than the day on which the information is laid—the day the information so specifies; or (b) in any other case—the day on which the information relating to the offence is laid. > required includes directed. > secondary derivative offence, in relation to failure to do an act, means an offence or further offence of which a person is, in relation to failure to do the act, guilty by virtue of paragraph (4)(c) or (d). > substantive offence, in relation to failure to do an act, means: (a) a primary substantive offence in relation to failure to do the act; or (b) a further offence of which a person is, in relation to failure to do the act, guilty by virtue of subsection (3). (7) Subsections (1) to (6), inclusive, of this section do not apply in relation to an obligation to do an act or thing, being an obligation that arose before the commencement of section 198 of the Companies and Securities Legislation (Miscellaneous Amendments) Act 1985, and, notwithstanding the repeal effected by that section, section 142 of this Act as in force at any time before that commencement continues to have effect in relation to such an obligation. ##### 143 Offences by bodies corporate (1) Where a body corporate is guilty of an offence against this Act (other than an offence of which the body corporate is guilty by virtue of subsection 142(3) or (4) of this Act as in force after the commencement of section 198 of the Companies and Securities Legislation (Miscellaneous Amendments) Act 1985): (a) any officer of the body corporate (including a person who has subsequently ceased to be an officer of the body corporate) who was in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the commission of the offence is guilty of an offence; and (b) notwithstanding subsection 141(6), the penalty applicable to an offence of which such an officer is guilty by virtue of paragraph (a) of this subsection is the penalty applicable to the offence of which the body corporate is guilty. (2) For the purposes of this section, officer, in relation to a body corporate, includes: (a) a director, secretary, executive officer or employee of the body corporate; (b) a receiver, or a receiver and manager, of property, of the body corporate; (c) an official manager or a deputy official manager of the body corporate; (d) a liquidator of the body corporate; and (e) a trustee or other person administering a compromise or arrangement made between the body corporate and another person or other persons. ##### 144 Certain persons to assist in prosecutions (1) Where a prosecution in respect of an offence against this Act has been instituted, or the Commission is of the opinion that a prosecution in respect of an offence against this Act ought to be instituted, against a person (in this section referred to as the defendant), the Commission may: (a) if the defendant is a natural person—require any person who is or was a partner, employee or agent of the defendant; or (b) if the defendant is a body corporate—require any person who is or was an officer, employee or agent of the defendant; to assist in the prosecution, and a person who is so required shall give all assistance in connection with the prosecution that that person is reasonably able to give. (2) The Commission shall not make such a requirement as is mentioned in subsection (1) of a person who, in the opinion of the Commission, is or is likely to be a defendant in the proceedings or is or has been a duly qualified legal practitioner acting for such a person. (3) If a person to whom paragraph (1)(a) or (b) relates fails to give assistance as required by subsection (1), he is guilty of an offence and, without affecting any penalty to which he may be liable for the offence, the Court may, on the application of the Commission, order that person to comply with the requirement within such time, and in such manner, as the Court orders. (4) In this section, agent, in relation to the defendant, includes a banker of the defendant and a person engaged as an auditor by the defendant, whether that person is an employee or an officer of the defendant or not. ##### 145 Reciprocity in relation to offences If a person does or omits to do an act or thing in the Territory and that person, if he had done or had omitted to do that act or thing in a State or in another Territory, would have been guilty of an offence against the provision of a law of that State or Territory that corresponds with a provision of this Act, that person is guilty of an offence against that provision of this Act. ##### 146 Offences committed partly in and partly out of the Territory If a person does or omits to do an act or thing outside the Territory and that person, if he had done or omitted to do that act or thing in the Territory, would, by reason of his also having done or omitted to do an act or thing in the Territory, have been guilty of an offence against this Act, that person is guilty of that offence. ##### 147 Power of Court to prohibit payment or transfer of moneys, securities or other property \[see Note 2\] (1) Where: (a) an investigation is being carried out under this Act in relation to any act or omission by a person, being an act or omission that constitutes or may constitute an offence against this Act; (b) a prosecution has been instituted against a person for an offence against this Act; or (c) a civil proceeding has been instituted against a person under this Act; and the Court considers it necessary or desirable to do so for the purpose of protecting the interests of any persons to whom the person referred to in paragraph (a), (b) or (c), as the case may be (in this section referred to as the relevant person), is liable or may be or become liable to pay any moneys, whether in respect of a debt, or by way of damages or compensation or otherwise, or to account for any securities or other property, the Court may, on application by the Commission, make any one or more of the following orders: (d) an order prohibiting, either absolutely or subject to conditions, a person who is indebted to the relevant person or to any person associated with the relevant person from making a payment in total or partial discharge of the debt to, or to another person at the direction or request of, the person to whom the debt is owed; (e) an order prohibiting, either absolutely or subject to conditions, a person holding money, or securities or other property, on behalf of the relevant person or on behalf of any person associated with the relevant person from paying all or any of the money, or transferring, or otherwise parting with possession of, the securities or other property, to, or to another person at the direction or request of, the person on whose behalf the money, or the securities or other property, is or are held; (f) an order prohibiting, either absolutely or subject to conditions, the taking or sending out of the Territory, or out of Australia, of moneys of the relevant person or of any person associated with the relevant person; (g) an order prohibiting, either absolutely or subject to conditions, the taking, sending or transfer of securities or other property of the relevant person or of any person who is associated with the relevant person from a place in the Territory to a place outside the Territory (including the transfer of securities from a register in the Territory to a register outside the Territory) or from a place in Australia to a place outside Australia (including the transfer of securities from a register in Australia to a register outside Australia); (h) an order appointing: (i) where the relevant person is a natural person—a receiver or trustee, having such powers as the Court orders, of the property or part of the property of that person; or (ii) where the relevant person is a body corporate—a receiver or receiver and manager, having such powers as the Court orders, of the property or part of the property of that person; (j) where the relevant person is a natural person—an order requiring that person to deliver up to the Court his passport and such other documents as the Court thinks fit; (k) where the relevant person is a natural person—an order prohibiting that person from leaving Australia without the consent of the Court. (1A) Where an application is made to the Court for an order under subsection (1), the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application. (1B) Where the Commission makes an application to the Court for the making of an order under subsection (1), the Court shall not require the Commission or any other person, as a condition of granting an interim order under subsection (1A), to give any undertakings as to damages. (2) Where the Court has made an order under this section, the Court may, on application by the Commission or by any person affected by the order, make a further order rescinding or varying the first‑mentioned order. (3) An order made under this section may be expressed to operate for a period specified in the order or until the order is rescinded by a further order under this section. (4) A person shall not contravene or fail to comply with an order by the Court under this section that is applicable to him. Penalty: $2,500 or imprisonment for 6 months, or both. ##### 148 Power of Commission to intervene in proceedings (1) The Commission may intervene in any proceeding relating to a matter arising under this Act. (2) Where the Commission intervenes in any proceeding referred to in subsection (1), the Commission shall be deemed to be a party to the proceeding and, subject to this Act, has all the rights, duties and liabilities of such a party. (3) Without limiting the generality of subsection (2), the Commission may appear and be represented in any proceeding in which it wishes to intervene pursuant to subsection (1): (a) by an employee of the Commission; (b) by a natural person to whom, or by an officer or employee of a person to whom or to which, the Commission has delegated its functions and powers under this Act or such of those functions and powers as relate to a matter to which the proceeding relates; or (c) by solicitor or counsel. ##### 149 Injunctions (1) Where a person has engaged, is engaging or is proposing to engage in any conduct that constitutes or would constitute a contravention of this Act, the Court may, on the application of: (a) the Commission; or (b) any person whose interests have been, are or would be affected by the conduct; grant an injunction restraining the first‑mentioned person from engaging in the conduct and, if in the opinion of the Court it is desirable to do so, requiring that person to do any act or thing. (1A) Where a person has refused or failed, is refusing or failing, or is proposing to refuse or fail, to do an act or thing that he is required by this Act to do, the Court may, on the application of: (a) the Commission; or (b) any person whose interests have been, are or would be affected by the refusal or failure to do that act or thing; grant an injunction requiring the first‑mentioned person to do that act or thing. (2) Where an application is made to the Court for an injunction under subsection (1), the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim injunction restraining a person from engaging in conduct of the kind referred to in subsection (1) pending the determination of the application. (3) The Court may rescind or vary an injunction granted under subsection (1), (1A) or (2). (4) Where an application is made to the Court for the grant of an injunction restraining a person from engaging in conduct of a particular kind, the power of the Court to grant the injunction may be exercised: (a) if the Court is satisfied that the person has engaged in conduct of that kind—whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; or (b) if it appears to the Court that, in the event that an injunction is not granted, it is likely that the person will engage in conduct of that kind—whether or not the person has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person engages in conduct of that kind. (4A) Where an application is made to the Court for a grant of an injunction requiring a person to do a particular act or thing, the power of the Court to grant the injunction may be exercised: (a) if the Court is satisfied that the person has refused or failed to do that act or thing—whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; or (b) if it appears to the Court that, in the event that an injunction is not granted, it is likely the person will refuse or fail to do that act or thing—whether or not the person has previously refused or failed to do that act or thing and whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person refuses or fails to do that act or thing. (5) Where the Commission makes an application to the Court for the grant of an injunction under this section, the Court shall not require the Commission or any other person, as a condition of granting an interim injunction, to give any undertakings as to damages. (6) Where the Court has power under this section to grant an injunction restraining a person from engaging in particular conduct, or requiring a person to do a particular act or thing, the Court may, either in addition to or in substitution for the grant of the injunction, order that person to pay damages to any other person. ##### 149A Power of Court to punish for contempt of Court Nothing in a provision of this Act that provides: (a) that a person shall not contravene or fail to comply with an order of the Court; or (b) that a person who contravenes or fails to comply with an order of the Court is guilty of an offence; affects the powers of the Court in relation to the punishment of contempts of the Court. ##### 150 Regulations (1) The Governor‑General may make regulations, not inconsistent with this Act, prescribing all matters required or permitted by this Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this Act, and, in particular, matters for or in relation to: (a) the forms to be used for the purposes of this Act; (b) the publication of advertisements offering the services of dealers or investment advisers or offering securities for purchase or sale, and the form and content of those advertisements; (c) the form of balance sheets and profit and loss accounts required by this Act to be prepared by dealers; (d) the furnishing to the Commission of information in addition to, or in variation of, the information contained in a prescribed form lodged with it; (e) the manner in which, the persons by whom, and the directions in accordance with which, the prescribed forms, or any of them, shall or may be signed, prepared or completed, and the regulation generally of the signing, preparation and completion of those forms or any of them; (f) the times within which information required to be furnished to the Commission pursuant to this Act shall be so furnished; and (g) the manner in which: (i) orders made under this Act may be served on persons affected by the orders; and (ii) documents that are required or permitted by this Act to be served on a person may be so served. (1A) The regulations: (a) may prescribe offences against this Act (not being offences the penalties applicable to which include a term of imprisonment or a pecuniary penalty that exceeds $1,000), or offences against the regulations, for the purposes of section 141A; and (b) shall, in relation to each offence that is prescribed pursuant to this subsection: (i) prescribe the particulars of that offence that are to be given in a notice served on a person under section 141A in relation to the offence; and (ii) prescribe the amount of the penalty (being an amount that does not exceed half the amount of the penalty applicable to the offence) that is payable in respect of the offence pursuant to a notice served on a person under section 141A in relation to the offence. (1B) In subsection (1A), a reference to a penalty applicable to an offence is a reference to the penalty that is applicable to that offence by virtue of any of the provisions of section 141. (1C) The particulars of an offence required to be prescribed by subparagraph (1A)(b) (i) may be prescribed by being set out in the form prescribed for the purposes of section 141A in relation to the offence. (2) The regulations may provide that, subject to any prescribed terms and conditions, the provisions of this Act or any of those provisions: (a) do not have effect in relation to a specified person or to a person who is a member of a specified class of persons: (i) who is or may be a dealer or investment adviser by reason only of his doing anything that is incidental to another business; (ii) who does not deal in securities for or on behalf of any other person; or (iii) who is a dealer or investment adviser by reason only of the entering into by him of any specified transaction or class of transactions; (b) do not have effect in relation to the representative of a person referred to in paragraph (a); (c) have effect in relation to a person referred to in paragraph (a) or (b) to such extent only as is prescribed; (ca) do not have effect in relation to a specified transaction or class of transactions; or (d) do not have effect in relation to a specified transaction or class of transactions entered into by a specified person or class of persons. (3) Except as otherwise expressly provided in this Act, the regulations may be of general or specially limited application or may differ according to differences in time, locality, place or circumstance. (4) Regulations for the purposes of subsection 19(11) may be made by reference to a scale of expenses for witnesses who attend before a court specified in the regulations, being a federal court or the Supreme Court of a State or Territory. (5) The power of the Governor‑General to make regulations shall be exercised only in accordance with advice that is consistent with resolutions of the Ministerial Council. ##### 151 Rules of Court The power to make rules of court conferred by section 28 of the Australian Capital Territory Supreme Court Act 1933 extends to making rules of court, not inconsistent with this Act, with respect to proceedings, and the practice and procedure, of the Court under this Act and, in particular, with respect to costs of and incidental to any such proceedings.