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This is a Bill, not an Act. For current law, see the Acts databases.
1998-1999-2000-2001
The
Parliament of the
Commonwealth of
Australia
HOUSE OF
REPRESENTATIVES
Presented and read a first
time
Corporations
Bill 2001 Volume 4
No. ,
2001
(Treasury)
A Bill
for an Act to make provision in relation to corporations, securities, the
futures industry and financial products and services, and for other
purposes
ISBN: 1642
46636X
Contents
A natural person must not do an act as a representative of a futures
broker (other than an exempt broker) unless:
(a) the broker holds a futures brokers licence; and
(b) the person holds a proper authority from the broker.
A natural person must not do an act as a representative of a futures
adviser (other than an exempt futures adviser) unless the futures
adviser:
(a) is also a futures broker and holds a futures brokers licence;
or
(b) holds a futures advisers licence;
and the person holds a proper authority from the futures adviser.
It is a defence to a prosecution for a contravention of section 1172
or 1173 constituted by an act done by a person as a representative of another
person if it is proved that:
(a) but for the revocation or suspension of a licence held by the other
person, the act would not have been such a contravention; and
(b) when he or she did the act, the first-mentioned person:
(i) believed in good faith that the other person held the licence;
and
(ii) was unaware of the revocation or suspension; 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
suspension.
A body corporate must not do an act as a representative of a
person.
(1) A licensee must establish a register of the persons who hold proper
authorities from the licensee and must keep it in accordance with this
section.
(2) The register must be in writing or in such other form as ASIC
approves.
(3) The register must contain, in relation to each person (if any) who
holds a proper authority from the licensee:
(a) a copy of the proper authority; and
(b) the person’s name; and
(c) the person’s current residential address; and
(d) unless the person’s current business address is the same as the
licensee’s—the person’s current business address;
and
(e) such other information (if any) as is prescribed.
(4) A copy of a proper authority of a person from the licensee that
subsection (3) requires the register to contain must be included in the
register within 2 business days after the person begins to hold that proper
authority.
(5) Information that subsection (3) requires the register to contain
in relation to a person must 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 must:
(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 is taken the purposes of subsections (3) and
(5) not to be contained or entered in the register.
(8) Where a licensee whom subsection (1) requires to establish a
register already keeps one under this section, the licensee need not establish a
new register but must keep the existing one in accordance with this
section.
(1) This section has effect where a licensee keeps a register under
section 1176.
(2) Within 14 days after establishing the register, the licensee must
lodge written notice of where the register is kept.
(3) As soon as practicable after changing the place where the register is
kept, the licensee must lodge written notice of the new place where the register
is kept.
(4) Within 2 business days after the day on which a person begins to hold
a particular proper authority from the licensee, the licensee must, 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 1176(5) requires the
licensee to enter in the register information that the register is required by
virtue of paragraph 1176(3)(b), (c), (d) or (e) to contain, the licensee must
lodge a written notice setting out the information and stating that the
information has been, or is to be, entered in the register.
(6) Within 2 business days after a person ceases to hold a proper
authority from the licensee, the licensee must, 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.
(1) A licensee must ensure that a register kept by it under
section 1176 is open for inspection without charge.
(2) A person may by writing request a licensee to give the person a copy
of the whole, or of a specified part, of a register kept by the licensee under
section 1176.
(3) A licensee must comply with a request under subsection (2) within
2 business days after:
(a) if the licensee requires the person to pay for the copy an amount of
not more than the prescribed amount—receiving the amount from the person;
or
(b) otherwise—receiving the request.
(1) Where ASIC has reason to believe that a person:
(a) holds a proper authority from a licensee; or
(b) has done an act as a representative of another person;
then, whether or not ASIC knows who the licensee or other person is, it may
require the first-mentioned person to produce:
(c) any proper authority from a licensee; or
(d) any invalid futures authority from a person;
that the first-mentioned person holds.
(2) A person must not, without reasonable excuse, refuse or fail to comply
with a requirement under this section.
(1) Where ASIC believes on reasonable grounds that:
(a) a person (in this section called the holder) holds, or
will hold, a proper authority from a licensee; and
(b) having regard to that fact, ASIC should give to the licensee
particular information that ASIC has about the person; and
(c) the information is true;
ASIC may give the information to the licensee.
(2) Where ASIC 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 must not give to
another person, make use of, or make a record of, information given by ASIC
under subsection (1).
(4A) Subsection 8(3) does not apply in relation to a reference in
subsection (2), (3) or (4) of this section to a provision of this
section.
(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
must 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; or
(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; or
(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 futures broking business or futures
advice business carried on by the first-mentioned person.
(8) In addition, and without prejudice, to the effect it has of its own
force, subsection (6) has by force of this subsection the effect it would
have if:
(a) the reference in it to information being given in accordance with this
section were a reference to information being given in accordance with
section 1181; and
(b) a reference in it to a court were a reference to a court of an
external Territory or of a country outside Australia and the external
Territories; and
(c) paragraphs (6)(d) and (e) were omitted.
(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 futures 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 futures authority to the other
person within a specified period of not less than 2 business days.
(3) A person must not, without reasonable excuse, refuse or fail to comply
with a requirement made of the person in accordance with subsection (1) or
(2).
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 ASIC), 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.
(1) This section applies for the purposes of a proceeding in a court
where:
(a) in this jurisdiction or elsewhere, a person (in this section called
the representative) engages in particular conduct while the person
is a representative of 2 or more persons (in this section called the
indemnifying principals); and
(b) it is proved for the purposes of the proceeding that the
representative engaged in the conduct as a representative of some person (in
this section called the unknown principal) but it is not proved
for those purposes who the unknown principal is.
(2) If only one of the indemnifying principals is a party to the
proceeding, he, she or it is liable in respect of that conduct as if he, she or
it were the unknown principal.
(3) If 2 or more of the indemnifying principals are parties to the
proceeding, each of those parties is liable in respect of that conduct as if he,
she or it were the unknown principal.
(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, in this jurisdiction or elsewhere:
(i) engages in particular conduct; or
(ii) proposes, or represents that the representative proposes, to engage
in particular conduct; and
(b) another person (in this section called the client) does,
or omits to do, a particular act, in this jurisdiction or elsewhere, because the
client believes at a particular time in good faith that the representative
engaged in, or proposes to engage in, as the case may be, that
conduct:
(i) on behalf of some person (in this section called the assumed
principal) whether or not identified, or identifiable, at that time by
the client; and
(ii) in connection with a futures broking business or futures advice
business carried on by the assumed principal; and
(c) it is reasonable to expect that a person in the client’s
circumstances would so believe and would do, or omit to do, as the case may be,
that act because of that belief;
whether or not that conduct is or would be within the scope of the
representative’s employment by, or authority from, any person.
(2) If:
(a) subparagraph (1)(a)(i) applies; or
(b) subparagraph (1)(a)(ii) applies and the representative engages in
that conduct;
then, for the purposes of a proceeding in a court:
(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).
(3A) Subsection (3) does not apply unless:
(a) the conduct was engaged in, the proposed conduct would have been
engaged in, or the representation was made, in this jurisdiction; or
(b) the act referred to in paragraph (1)(b) was done, or would have
been done, as the case may be, in this jurisdiction; or
(c) some or all of the loss or damage was suffered in this
jurisdiction.
(4) If:
(a) there are 2 or more indemnifying principals; and
(b) 2 or more of them are parties (in this subsection called the
indemnifying parties) to a proceeding in a court; and
(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.
(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, in this jurisdiction or elsewhere, 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
is 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 1185 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 is 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.
(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 1185 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; or
(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) A person must 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).
(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 1183, 1184 or 1185:
(a) affects a liability arising otherwise than by virtue of this Division;
or
(b) notwithstanding paragraph (a) of this subsection, entitles a
person to be compensated twice in respect of the same loss or damage;
or
(c) makes a person guilty of an offence.
ASIC may, by written order, revoke a licence held by a natural person if
the person:
(a) becomes an insolvent under administration; or
(b) is convicted of serious fraud; or
(c) becomes incapable, through mental or physical incapacity, of managing
his or her affairs; or
(d) asks ASIC to revoke the licence.
ASIC may, by written order, revoke a licence held by a body corporate
if:
(a) the body ceases to carry on business; or
(b) the body becomes an externally-administered body corporate;
or
(c) the body asks ASIC 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.
(1) Subject to section 1200, ASIC 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; or
(b) there was an omission of material matter from the application for the
licence; or
(c) the licensee contravenes a futures law; or
(d) the licensee contravenes a condition of the licence; or
(ea) the licensee is a natural person and ASIC has reason to believe that
he or she is not of good fame and character; or
(e) the licensee is a body corporate and ASIC is satisfied that the
educational qualifications or experience of a person who:
(i) is an officer of the licensee; and
(ii) was not an officer of the licensee 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;
or
(f) the licensee is a body corporate and ASIC is satisfied that:
(i) an officer of the licensee 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 ASIC 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; or
(g) the licensee is a body corporate and:
(i) a licence held by a director, secretary or executive officer of the
body is suspended or revoked; or
(ii) an order is made under section 1194 against such a director,
secretary or executive officer; or
(h) ASIC has reason to believe that the licensee has not performed
efficiently, honestly and fairly the duties of a holder of a futures brokers
licence or a futures advisers licence, as the case requires; or
(j) ASIC 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)(ea) or (j) in relation to a licensee, ASIC is not precluded
from having regard to a matter that arose before the time when the licence was
granted unless ASIC was aware of the matter at that time.
(1) Subject to section 1200, where:
(a) section 1189A or 1190 empowers ASIC to revoke a licence otherwise
than because the licensee has asked for the revocation; or
(b) ASIC is empowered by virtue of paragraph 1191(1)(c), (d), (e), (f),
(g), (h) or (j) to revoke a licence;
ASIC 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 1142
or 1143 would prohibit the licensee from doing if the licensee did not hold the
licence.
(2) ASIC may at any time, by written order, vary or revoke an order in
force under this section.
(3) For the purposes of sections 1142, 1143, 1172 and 1173 a licensee
is taken not to hold the licence at any time during a period for which the
licence is suspended.
(4) Where an order in force under this section prohibits the licensee as
mentioned in paragraph (1)(d):
(a) the licensee must 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 1172 and 1173 apply,
or apply during the period specified in the order, as the case requires, as if
the licensee did not hold the licence.
Subject to section 1200, where ASIC:
(a) revokes under section 1189A; or
(b) revokes because of paragraph 1191(1)(a), (b), (c), (d), (h) or (j);
or
(c) revokes because of paragraph 1191(1)(ea); or
(d) suspends because of paragraph 1192(1)(a); or
(e) suspends because of paragraph 1192(1)(b);
a licence held by a natural person, it may also make a banning order
against the person.
Subject to section 1200, ASIC may make a banning order against a
natural person (other than a licensee) if:
(a) he or she becomes an insolvent under administration; or
(b) he or she is convicted of serious fraud; or
(c) he or she becomes incapable, through mental or physical incapacity, of
managing his or her affairs; or
(d) he or she contravenes a futures law; or
(e) ASIC has reason to believe that he or she is not of good fame and
character; or
(f) ASIC has reason to believe that he or she has not performed
efficiently, honestly and fairly the duties of:
(i) a representative of a futures broker; or
(ii) a representative of a futures adviser; or
(g) ASIC has reason to believe that he or she will not perform
efficiently, honestly and fairly the duties of:
(i) a representative of a futures broker; or
(ii) a representative of a futures adviser.
(1) Where this Division empowers ASIC to make a banning order against a
person, ASIC may, by written order, prohibit the person:
(a) in any case—permanently; or
(b) except where ASIC is empowered by virtue of paragraph 1193(e) to make
the order—for a specified period;
from doing an act as:
(c) a representative of a futures broker; or
(d) a representative of a futures adviser; or
(e) a representative of a futures broker or a futures adviser;
whichever the order specifies.
(2) ASIC must not vary or revoke a banning order except under
section 1195, 1196 or 1197.
(1) An order made against a person under subsection 1194(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 1200, ASIC 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); or
(b) by varying such a provision in relation to conditions, circumstances
or acts specified in the provision; or
(c) by omitting such a provision and substituting another such provision;
or
(d) by omitting such a provision.
(1) Subject to sections 1197 and 1200, this section has effect where
a person applies to ASIC to vary or revoke a banning order relating to the
person.
(2) If:
(a) the person is not an insolvent under administration; and
(b) ASIC has no reason to believe that the person is not of good fame and
character; and
(c) ASIC has no reason to believe that the person will not perform
efficiently, honestly and fairly the duties of:
(i) a representative of a futures broker; or
(ii) a representative of a futures adviser;
ASIC must, by written order:
(d) if only one of subparagraphs (c)(i) and (ii) applies—vary
the banning order so that it no longer prohibits the person from doing an act as
a representative of a futures broker or of a futures adviser, as the case may
be; or
(e) in any other case—revoke the banning order.
(3) Otherwise, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(b) or (c), ASIC must 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 ASIC 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.
Where:
(a) section 1196 requires ASIC to vary a banning order so that it no
longer has a particular operation; and
(b) the order has no other operation;
ASIC must, by written order, instead revoke the banning order.
(1) An order by ASIC 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 ASIC
under this Division takes effect, ASIC must publish in the Gazette a
notice that sets out a copy of:
(a) if the order is made under section 1189A, 1190, 1191, 1192 or
1194 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; and
(b) the banning order as so in force includes a provision that permits a
person as mentioned in subsection 1195(1); and
(c) in ASIC’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.
A person must not contravene a banning order relating to the
person.
ASIC must not grant a futures brokers licence or a futures advisers
licence to a person if a banning order prohibits the person (except as permitted
by the order) from doing an act as a representative of a futures broker, or of a
futures adviser, as the case may be.
(1) ASIC must not:
(a) refuse an application for a licence on the ground, or grounds
including the ground, that paragraph 1144A(2)(d), (e) or (f) or 1145(2)(e) or
(f) does not apply in relation to the applicant; or
(b) impose conditions on a licence; or
(c) vary the conditions of a licence; or
(d) revoke or suspend a licence otherwise than by virtue of
section 1189A or 1190 or paragraph 1192(1)(a); or
(e) make, otherwise than by virtue of paragraph 1192A(a) or (d) or
1193(a), (b) or (c), an order under section 1194 against a person;
or
(f) make under subsection 1195(2) an order varying a banning order against
a person; or
(g) refuse an application by a person under section 1196;
unless ASIC complies with subsection (2) of this section.
(2) ASIC must give the applicant, licensee or person, as the case may be,
an opportunity:
(a) to appear at a hearing before ASIC that takes place in private;
and
(b) to make submissions and give evidence to ASIC in relation to the
matter.
(1) Where ASIC:
(a) revokes under section 1189A, 1190 or 1191 a licence held by a
person; or
(b) makes under section 1194 against a person an order that is to
operate otherwise than only for a specified period;
ASIC may apply to the Court for an order or orders under this section in
relation to the person.
(2) On an application under subsection (1), the Court may make one or
more of the following:
(a) an order disqualifying the person, permanently or for a specified
period, from holding:
(i) a futures brokers licence;
(ii) a futures advisers licence; or
(iii) a futures brokers licence or a futures 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 futures broker;
(ii) a representative of a futures adviser; or
(iii) a representative of a futures broker or of a futures
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
subsection (2).
(1) ASIC must not grant a futures brokers licence or a futures advisers
licence to a person whom an order in force under section 1201 disqualifies
from holding a futures brokers licence or a futures advisers licence, as the
case may be.
(2) A person must not contravene an order that:
(a) is of a kind referred to in paragraph 1201 (2) (b); and
(b) is in force under section 1201; and
(c) relates to the person.
(1) A person who is the holder of a licence must not represent or imply,
or knowingly 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 ASIC.
(2) A statement that a person is the holder of a licence is not a
contravention of this section.
(1) In this section:
broadcast, in relation to a statement, means broadcast the
statement by wireless transmission or television or cause it to be so
broadcast.
publish, in relation to a statement, means:
(a) insert the statement in a newspaper or periodical or cause it to be so
inserted; or
(b) publicly exhibit the statement or cause it to be publicly exhibited;
or
(c) include the statement, or cause it to be included, in a document that,
whether or not in response to a request, is sent or delivered to a person, or
thrown or left upon premises in the occupation of a person.
(2) Where ASIC considers that, having regard to conduct that a person has
engaged in, is engaging in, or proposes to engage in, it is in the public
interest to do so, it may, by written order given to the person, prohibit the
person from publishing or broadcasting statements about:
(a) futures contracts; or
(b) businesses carried on, or proposed to be carried on, by persons and
involving dealing in futures contracts on behalf of other persons; or
(c) futures advice businesses or proposed futures advice
businesses;
unless the form and content of the statements have first been approved by
ASIC.
(3) An order under subsection (2) must not be made unless ASIC has
first given the person in relation to whom it proposes to make the order an
opportunity to appear at a hearing before ASIC (being a hearing that takes place
in private) and make submissions and give evidence to ASIC in relation to the
matter.
(4) A person the subject of an order under subsection (2) must comply
with the order.
(5) For the purposes of this section, where a statement is published or
broadcast and there is also published or broadcast in relation to the
statement:
(a) the name or address of a person; or
(b) the telephone or telex number of a person; or
(c) the post office or other delivery box number of a person;
it is presumed, unless the contrary is proved, that the statement was
published or broadcast by that person.
Neither of sections 1206 and 1207 applies in relation to an exempt
broker, except in so far as the exempt broker carries on a futures broking
business as a personal representative of a dead futures broker.
(1) A futures broker must, in respect of a transaction, being the
acquisition or disposal of a futures contract, that is entered into by the
broker on behalf of another person, give as soon as practicable:
(a) in a case where the transaction is not an operation by the broker on a
discretionary account—to that other person; or
(b) in a case where the transaction is an operation by the broker on a
discretionary account—to the person, or to each person, as the case
requires, who gave instructions to the broker authorising the broker to operate
on the discretionary account, other than a person who agrees in the prescribed
manner to waive the operation of this paragraph;
a contract note that complies with subsection (3), (4) or (5), as the
case requires.
(2) Subsection (1) does not require a futures broker to give a
contract note to a person in respect of a transaction if the person was at the
time of the transaction the holder of a futures brokers licence.
(3) A contract note given by a futures broker under subsection (1) in
respect of a transaction, being the acquisition or disposal of a futures
contract (other than a futures option or an eligible exchange-traded option),
must include:
(a) the name or style under which the broker carries on business as a
futures broker and the address of the principal place at which the broker so
carries on business; and
(b) the name of the person to whom the broker gives the contract note;
and
(c) the day on which the transaction took place; and
(d) a description of the futures contract sufficient to identify the
nature of the transaction, including:
(i) in a case where the futures contract is a commodity agreement—a
description of the commodity and a statement of the contract price;
and
(ii) in a case where the futures contract is an adjustment
agreement:
(A) a description of the class of adjustment agreements in which the
futures contract is included; and
(B) a statement of the contract price; and
(C) if the transaction is the completion of the futures contract—the
value or worth (as determined in accordance with the futures contract) of the
futures contract at the time of that completion; and
(iii) in a case where the transaction is a liquidating trade—details
of the liquidating trade and of the futures contract that is intended to be
closed out following the entering into of the liquidating trade; and
(e) the deposit paid or payable in respect of the transaction;
and
(f) the month and year for the performance or settlement of the contract;
and
(g) in a case where the transaction took place on a futures market of a
futures exchange or of a recognised futures exchange, or on an exempt futures
market—a name or abbreviation by which the futures exchange, recognised
futures exchange or exempt futures market, as the case may be, is generally
known; and
(h) a statement of the amount of commission charged or the rate (if any)
at which ASIC was charged; and
(j) a statement of the amounts (if any) of all stamp duties and other
duties and taxes payable in connection with the transaction.
(4) A contract note given by a futures broker under subsection (1) in
respect of a transaction, being the acquisition or disposal of a futures option,
must include:
(a) the matters specified in paragraphs (3)(a), (b), (c), (g), (h)
and (j); and
(b) a description of the class of futures contracts in which is included
the futures contract to which the futures option relates; and
(c) the month and year for performance or settlement of the futures
contract to which the futures option relates; and
(d) the date by which the purchaser of the futures option, in order to
exercise the futures option, must declare an intention to exercise the futures
option; and
(e) a statement of the amount of the premium; and
(f) details of the price at which the purchaser of the futures option has,
by virtue of the futures option, an option or Chapter 8 right to assume a
bought position, or sold position, as the case requires, in relation to the
futures contract to which the futures option relates.
(5) A contract note given by a futures broker under subsection (1) in
respect of a transaction, being the acquisition or disposal of an eligible
exchange-traded option (in this subsection called the option),
must include:
(a) the matters specified in paragraphs (3)(a), (b), (c), (g), (h)
and (j); and
(b) a description of the commodity or index to which the option relates;
and
(c) the date by which the purchaser of the option, in order to exercise
the option, must declare an intention to exercise the option; and
(d) a statement of the amount of the premium; and
(e) details of:
(i) in a case where the option relates to a commodity—the price at
which the purchaser of the option has, by virtue of the option, an option or
right to purchase, or sell, as the case requires, that commodity; or
(ii) in a case where the purchaser of the option has, by virtue of the
option, an option or right to be paid 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—the specified number and the manner in which
that amount of money is to be determined.
(6) A futures broker must not include in a contract note given under
subsection (1), as the name of a person with or on behalf of whom the
broker has entered into the transaction, a name that the broker knows, or could
reasonably be expected to know, is not a name by which that person is ordinarily
known.
(7) For the purposes of this section, a futures contract is included in
the same class of futures contracts as another futures contract if, and only if,
the first-mentioned futures contract is of the same kind as the other futures
contract.
(1) Where:
(a) a futures broker has, at any time during a particular month, held
money or property on account of a client; or
(b) a futures broker has, before or during a particular month, acquired a
futures contract on behalf of a client, and, as at the end of that month, the
futures contract has not been disposed of;
the broker must, within 7 days after the end of that month, send to the
client a written statement setting out:
(c) the name or style under which the broker carries on business as a
futures broker and the address of the principal place at which the broker so
carries on business; and
(d) the opening cash balance for that month in the client’s account;
and
(e) all deposits, credits, withdrawals and debits affecting the account
during that month; and
(f) the cash balance in the account at the end of that month;
and
(g) in relation to each futures contract that the broker has, before or
during that month, acquired on behalf of the client and that, as at the end of
that month, has not been disposed of, particulars of the futures contract,
including the particulars required by virtue of paragraph 1206(3)(d), or
paragraphs 1206(4)(b), (e) and (f) or (5)(b), (d) and (e), as the case requires,
to be included in a contract note relating to the acquisition of the futures
contract; and
(h) details of each outstanding call for a deposit or margin in respect of
a futures contract that the broker has acquired on behalf of the
client.
(2) Where a futures broker has, during a particular month, authority to
operate on a discretionary account, the broker must, within 7 days after the end
of that month, send to the person, or to each person, as the case requires, who
gave instructions to the broker authorising the broker to operate on the
discretionary account a written statement setting out:
(a) the name or style under which the broker carries on business as a
futures broker and the address of the principal place at which the broker so
carries on business; and
(b) the opening cash balance for that month in the account (in this
subsection called the account) maintained by the broker in respect
of the discretionary account; and
(c) all deposits, credits, withdrawals and debits affecting the account
during that month; and
(d) the cash balance in the account at the end of that month;
and
(e) in relation to each futures contract:
(i) that the broker has acquired before or during that month;
and
(ii) the acquisition of which was an operation by the broker on the
discretionary account; and
(iii) that, as at the end of that month, has not been disposed
of;
particulars of the futures contract, including the particulars required
by virtue of paragraph 1206(3)(d), or paragraphs 1206(4)(b), (e) and (f) or
(5)(b), (d) and (e), as the case requires, to be included in a contract note
relating to the acquisition of the futures contract; and
(f) details of each outstanding call for a deposit or margin in respect of
a futures contract that the broker has acquired on behalf of the client and the
acquisition of which was an operation by the broker on the discretionary
account.
(1) A futures broker must maintain separately from other records such
records as correctly record and explain dealings in futures contracts by the
broker on the broker’s own account including, but not limited to, records
specifying:
(a) a description of each of those dealings together with the date on
which and the time at which:
(i) the instructions (if any) for each of those dealings were received by
the futures broker; and
(ii) the instructions (if any) for each of those dealings were transmitted
to the futures market on which the dealing was effected; and
(iii) the dealing was effected; and
(b) the source of the funds used for effecting those dealings.
(2) A futures broker is taken not to have maintained records in compliance
with subsection (1) unless the entries in the records are made in writing
in the English language or are made in such a manner as will enable them to be
readily accessible and to be readily converted into writing in the English
language.
(3) A futures broker must not knowingly take the other side of an order of
a client of the broker in relation to a futures contract unless:
(a) the client has consented to the broker taking the other side of the
order in relation to that futures contract; or
(b) in dealing in that futures contract on behalf of the client, the
broker is taken, for the purposes of this Act, to be dealing in that futures
contract on the broker’s own account.
(4) For the purposes of subsection (3), a futures broker takes the
other side of an order of a client of the broker in relation to a futures
contract where the broker:
(a) when dealing on the broker’s own account, assumes a bought
position or sold position in relation to the contract; and
(b) when dealing on the instructions of the client, assumes the opposite
sold position or bought position in relation to the contract.
(1) In this section:
client, in relation to a futures broker, means a person on
behalf of whom the broker deals, or from whom the broker accepts instructions to
deal, in futures contracts, but does not include:
(a) the broker; or
(b) if the broker is a body corporate—a director, or an officer, of
the broker; or
(c) an employee of the broker; or
(d) if the broker is a body corporate—a body corporate that is
related to the broker; or
(e) a person who is associated with, or who is a partner of, the broker;
or
(f) a body corporate in which the broker has, or the broker and partners
of the broker together have, a controlling interest.
credit facility means a document evidencing the right of a
person to obtain money on credit from another person, and, without limiting the
generality of the foregoing, includes a letter of credit and a bank
guarantee.
property includes credit facilities and securities.
relevant credit balance, in relation to a client of a futures
broker, means the total of:
(a) the amounts deposited by the broker in respect of the client in a
clients’ segregated account, or clients’ segregated accounts, of the
broker, less so much of those amounts as has been withdrawn from the account or
accounts; and
(b) the values of the items of property that:
(i) have, in respect of the client, been deposited by the broker in safe
custody pursuant to subsection (3); and
(ii) have not been withdrawn from safe custody; and
(iii) under the terms and conditions on which they were deposited with, or
received by, the broker, are available to meet, or to provide security in
connection with the meeting of, relevant liabilities of the client.
relevant liabilities, in relation to a client of a futures
broker, means debts and liabilities of the client arising out of dealings in
futures contracts effected by the broker on behalf of the client.
settling, in relation to a dealing in a futures contract,
includes making delivery, or taking delivery, of a commodity to which the
futures contract relates.
(2) For the purposes of the definition of relevant credit
balance in subsection (1), the value of an item of property at a
particular time is:
(a) in the case of a credit facility—the amount of money that the
person entitled to the right evidenced by the credit facility can, at that time
or within a reasonable period after that time, obtain by virtue of that right;
or
(b) in any other case—the market value of the property as at the end
of the last business day before that time.
(3) Where, in connection with:
(a) dealings in futures contracts effected, whether in this jurisdiction
or elsewhere or proposed to be effected, by a futures broker on behalf of a
client of the broker; or
(b) instructions by a client of a futures broker to deal in futures
contracts, whether in this jurisdiction or elsewhere;
money or property (other than property to which section 1214 applies)
is deposited with the broker by the client, or is received by the broker for, or
on behalf of, the client, the broker must:
(c) in the case of money—deposit the money in a clients’
segregated account of the broker maintained in this jurisdiction or in the place
where the money was deposited with, or received by, the broker; or
(d) in the case of property—deposit the property in safe custody, in
this jurisdiction or in the place where the property was deposited with, or
received by, the broker, in such a manner that the property is segregated from
property other than property deposited by the broker in safe custody pursuant to
this subsection;
on or before the next day after the money or property is deposited with, or
received by, the broker that is a day on which the money or property can be
deposited as first mentioned in paragraph (c) or (d).
(4) Without limiting the generality of subsection (3), where, in
connection with dealings in futures contracts effected, whether in this
jurisdiction or elsewhere, by a futures broker, the broker receives from a
person an amount of money some or all of which is attributable to dealings in
futures contracts so effected on behalf of clients of the broker, the broker
must, on the next day on which the amount can be so deposited, deposit the
amount in a clients’ segregated account of the broker maintained in this
jurisdiction or in the place where the broker receives the amount.
(4A) A clients’ segregated account of a futures broker must be
designated as a clients’ segregated account, unless it is maintained
outside this jurisdiction and the law in force in the place where it is
maintained requires it to be designated in some other way.
(4B) If:
(a) a clients’ segregated account of a futures broker is required by
subsection (4A) to be designated as a clients’ segregated account;
and
(b) the account is designated in a way that complies substantially, but
not completely, with that requirement;
subsection (4A) is taken to be complied with in relation to the
account.
(5) Where, pursuant to this section, a futures broker deposits money in
respect of a client in a clients’ segregated account of the broker, the
broker must not withdraw any of the money except for the purpose of:
(a) making a payment to, or in accordance with the written direction of, a
person entitled to the money; or
(b) making a payment for, or in connection with, the entering into,
margining, guaranteeing, securing, transferring, adjusting or settling of
dealings in futures contracts effected by the broker on behalf of clients only;
or
(c) defraying brokerage and other proper charges incurred in respect of
dealings in futures contracts effected by the broker on behalf of the client;
or
(d) investing it:
(i) in any manner in which trustees are for the time being authorised by
law to invest trust funds; or
(ii) on deposit with an eligible money market dealer; or
(iii) on deposit at interest with:
(A) an Australian ADI; or
(B) an approved foreign bank in relation to the broker; or
(iv) on deposit with a clearing house for a futures exchange; or
(v) in the purchase of cash management trust interests; or
(e) paying to the broker the amount of a fee that the broker may charge,
or an amount to which the broker is entitled, under an agreement with the client
made under subsection (7); or
(f) making a payment that is otherwise authorised by law;
or as permitted by subsection (10).
(5A) If, under subsection (5), a broker (the paying
broker) withdraws money from a clients’ segregated account and
pays it to another broker (the receiving broker):
(a) the paying broker must ensure that the receiving broker is notified,
at the same time as the payment is made or as close to that time as is
practicable, of the fact that the money has been withdrawn from a clients’
segregated account of the paying broker and should be paid into a clients’
segregated account of the receiving broker; and
(b) on or before the next day after the receiving broker receives the
payment, the receiving broker must pay the money into a clients’
segregated account of the receiving broker.
(5B) A notification under paragraph (5A)(a) may be in writing or in
an electronic or other form and may convey its message by express words, or by a
code or some other means understood by the brokers concerned.
(6) A futures broker must not deal with property deposited by the broker
in safe custody under subsection (3) except:
(a) in accordance with the terms and conditions on which it was deposited
with, or received by, the broker; or
(b) for the purpose of meeting obligations incurred by the broker in
connection with margining, guaranteeing, securing, transferring, adjusting or
settling dealings in futures contracts effected by the broker on behalf of
clients only.
(7) A futures broker who invests as mentioned in paragraph (5)(d)
money that was, in respect of a client of the broker, deposited by the broker
under subsection (3):
(a) may charge such fee (if any) for so investing the money; and
(b) is entitled to so much (if any) of the return on the money so
invested;
as the broker and the client agree in writing.
(8) A futures broker must not invest an amount pursuant to
paragraph (5)(d) by depositing it with a person for that person to invest
unless:
(a) the broker:
(i) has informed the person that the amount has been withdrawn from a
clients’ segregated account of the broker and is money to which clients of
the broker are entitled; and
(ii) has obtained from the person a written statement that is signed by
the person, sets out the amount and acknowledges that the broker has informed
the person as mentioned in subparagraph (i); or
(b) the investment is made by the broker paying the amount into an account
maintained with the person in relation to which the following conditions are
satisfied:
(i) the account is maintained for the sole purpose of having amounts
invested in it pursuant to paragraph (5)(d);
(ii) the broker has informed the person that amounts paid into the account
will be amounts withdrawn from a clients’ segregated account of the broker
and will be moneys to which clients of the broker are entitled;
(iii) the broker has obtained from the person a written statement signed
by the person that acknowledges that the broker has informed the person as
mentioned in subparagraph (ii).
(9) Where, at a particular time, the total amount of the relevant
liabilities of a client of a futures broker exceeds the relevant credit balance
of the client, the broker may, in respect of the client, deposit in a
clients’ segregated account of the broker an amount of money not greater
than the amount of the excess, and, if the broker does so, the amount so
deposited is, subject to subsection (10), taken to be money to which the
client is entitled.
(10) Where:
(a) a futures broker has, in respect of a client of the broker, deposited
an amount pursuant to subsection (9) in a clients’ segregated account
of the broker; and
(b) the relevant credit balance of the client exceeds by a particular
amount the total amount of the relevant liabilities of the client;
the broker may withdraw from the account so much of the amount referred to
in paragraph (a) as does not exceed the amount first referred to in
paragraph (b).
(11) A futures broker must keep in relation to the clients’
segregated account, or clients’ segregated accounts, of the broker
financial records that:
(a) are separate from any other financial records of the broker;
and
(b) record separately in respect of each client of the broker particulars
of the amounts deposited in, and the amounts withdrawn from, the account or
accounts in respect of the client; and
(c) record, separately from the particulars referred to in
paragraph (b):
(i) particulars (including particulars of withdrawals) of so much of the
amounts deposited as required by subsection (4) in the account or accounts
as was not attributable to dealings in futures contracts effected by the broker
on behalf of clients of the broker; and
(ii) particulars of all amounts deposited in the account or accounts
pursuant to subsection (9); and
(iii) particulars of all amounts withdrawn from the account or accounts
pursuant to subsection (10).
(12) A futures broker must keep records that:
(a) relate to deposits of property in safe custody by the broker pursuant
to subsection (3); and
(b) record separately in respect of each client of the broker particulars
of the property deposited in respect of the client.
(13) Section 1213 applies, so far as it is capable of application, in
relation to financial records, and other records, that are required by
subsections (11) and (12), respectively, of this section to be kept by a
futures broker, and so applies as if those accounting records and other records
were financial records required by that section to be kept by the
broker.
(14) Subject to subsections (15) and (16), none of the
following:
(a) money deposited by a futures broker pursuant to this section in a
clients’ segregated account of the broker;
(b) property in which money deposited by a futures broker as mentioned in
paragraph (a) of this subsection has been invested pursuant to
paragraph (5)(d);
(c) property deposited by a futures broker in safe custody pursuant to
subsection (3);
is available for the payment of a debt or liability of the broker or is
liable to be attached, or taken in execution, under the order or process of a
court at the instance of a person suing in respect of such a debt or
liability.
(15) Nothing in subsection (14) affects the right of a client of a
futures broker to recover money or property to which the client is
entitled.
(16) Where a futures broker is entitled to withdraw money from a
clients’ segregated account of the broker for the purpose of making a
payment to the broker, subsection (14) does not apply in relation to that
money.
(17) Where a futures broker invests money pursuant to
paragraph (5)(d) by depositing it with a person for the person to invest,
neither that money, nor any property in which the person invests any of that
money, is available for the payment of a debt or liability of the person or is
liable to be attached, or taken in execution, under the order or process of a
court at the instance of a person suing in respect of such a debt or
liability.
(18) Nothing in this section affects a claim or lien that a futures broker
has, under an agreement, under an Australian law or otherwise, against or
on:
(a) money deposited by the broker pursuant to this section in a
clients’ segregated account of the broker; or
(b) property in which such money has been invested pursuant to
paragraph (5)(d); or
(c) property deposited by the broker in safe custody pursuant to
subsection (3).
(19) A futures broker must not pay an amount into a client’s
segregated account of the broker except as required or authorised by this
section or the regulations.
A futures broker must, before accepting a person as a client of the
broker, give to the person:
(a) a document that:
(i) explains the nature of futures contracts; and
(ii) explains the nature of the obligations assumed by a person who
instructs a futures broker to enter into a futures contract; and
(iii) sets out a risk disclosure statement in the prescribed form;
and
(iv) sets out the specifications, and details of the essential terms, of
each kind of futures contract in which the broker deals on behalf of clients;
and
(b) a copy of each agreement into which the broker proposes, if the broker
agrees to accept instructions from the person in relation to dealings in futures
contracts, to require the person to enter.
In this Part, unless the contrary intention appears, a reference to a
book, futures contract or business of or in relation to a futures broker who
carries on business in partnership is a reference to such a book, futures
contract or business of or in relation to the partnership.
(1) This Part applies in relation to a futures broker in relation to his,
her or its business of dealing in futures contracts, whether carried on in this
jurisdiction or elsewhere.
(2) This Part does not affect the operation of Chapter 2M in relation
to a company that holds a futures brokers licence or in relation to a business
of dealing in futures contracts that such a company carries on.
(1) A futures broker must:
(a) keep such financial records as correctly record and explain the
transactions and financial position of the business of dealing in futures
contracts carried on by the broker; and
(b) keep financial records in such a manner as will enable true and fair
profit and loss statements and balance sheets to be prepared from time to time;
and
(c) keep financial records in such a manner as will enable profit and loss
statements and balance sheets of the business of dealing in futures contracts
carried on by the broker to be conveniently and properly audited.
(2) Without limiting the generality of subsection (1), a futures
broker is taken not to have complied with that subsection in relation to records
if those records:
(a) are not 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; or
(b) are not kept in sufficient detail to show particulars of:
(i) all money received or paid by the broker, including money paid to, or
disbursed from, an account of the kind referred to in paragraph 1209(3)(c);
and
(ii) all dealings in futures contracts made by the broker, the charges and
credits arising from them, and the name of the person on whose behalf each
dealing was effected; and
(iii) all income received from commissions, interest and other sources,
and all expenses, commissions and interest paid, by the broker; and
(iv) all the assets and liabilities (including contingent liabilities) of
the broker; and
(v) all futures contracts to which the broker has become a party as a
result of trading on the broker’s own account; and
(vi) all futures contracts dealt with by the broker pursuant to
instructions given by another person, showing who gave the instructions;
and
(vii) all property that is property of the broker and in respect of which
the business rules of a futures exchange authorise the making of a futures
contract in the futures market of the futures exchange, showing by whom the
property is held and, if held by some other person, whether or not the property
is so held as security against loans or advances; and
(viii) all such property that is not property of the broker and for which
the broker or any nominee controlled by the broker is accountable, showing by
whom, and for whom, the property is held and the extent to which the property is
either held for safe custody or deposited with a third party as security for
loans or advances made to the broker; or
(c) are not kept in sufficient detail to show separately particulars of
every transaction by the broker; or
(d) do not specify the day on which or the period during which each
transaction by the broker took place; or
(e) do not contain copies of acknowledgments of the receipts of property
received by the broker from clients.
(3) Without affecting the operation of subsections (1) and (2), a
futures broker is taken not to have complied with subsection (1) in
relation to records if, in respect of a discretionary account on which the
broker operates, those records are not kept in sufficient detail to show the
particulars that the broker is required to give to clients in order to comply
with subsection 1207(2).
(4) Without affecting the operation of subsection (2) or (3), a
futures broker must keep records in sufficient detail to show separately
particulars of all transactions by the broker:
(a) with, on behalf of, or on the account of, clients of the broker,
excluding, in a case where the broker carries on business in partnership, the
partners in the firm; and
(b) in a case where the broker carries on business in partnership—on
the broker’s own account or with, on behalf of, or on the account of, the
partners in the firm; and
(c) in a case where the broker does not carry on business in
partnership—on the broker’s own account; and
(d) with, on behalf of, or on the account of, other futures brokers;
and
(e) with, on behalf of, or on the account of, representatives of the
broker; and
(f) with, on behalf of, or on the account of, employees of the
broker.
(5) An entry in the financial and other records of a futures broker
required to be kept in accordance with this section, and any matter recorded by
a futures exchange in relation to a member pursuant to subsection 1270(3) is
taken to have been made by, or with the authority of, the broker or
member.
(6) Where a record required by this section to be kept is not kept in
writing in the English language, the futures broker must, 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.
(7) Notwithstanding any other provision of this section, a futures broker
is not taken 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 futures contracts that is
carried on by the broker.
(8) If financial records or other records are kept by a futures broker at
a place outside this jurisdiction, the broker must cause to be sent to and kept
at a place in this jurisdiction such particulars with respect to the business
dealt with in those records as will enable true and fair profit and loss
statements and balance-sheets to be prepared.
(9) If any financial records of a futures broker are kept at a place
outside this jurisdiction, the broker must, if required by ASIC to produce those
records at a place in this jurisdiction, comply with the requirement not later
than 28 days after the requirement is made.
(1) Where a futures broker receives for safe custody property:
(a) that is the property of another person (in this section called the
client); and
(b) that is, or is to be, delivered in accordance with a futures contract;
and
(c) for which the broker or a nominee of the broker is
accountable;
the broker must forthwith:
(d) if the client requests that the property be deposited in safe custody
with the broker’s bankers—cause it to be so deposited or notify the
client of any failure to comply with the request, whether or not caused by a
refusal by the bankers to comply with the request; or
(e) if the client does not make, or the bankers refuse to comply with,
such a request and the business rules of the futures exchange that maintained or
provided the futures market on which the contract was made enable the property
to be deposited in safe custody—cause the property to be so deposited in
accordance with those rules.
(2) A futures broker must not deposit as security for a loan or advance
made to the broker property of a kind referred to in subsection (1) unless
an amount is owed to the broker by the client in connection with a transaction
entered into on the instructions of the client and the broker:
(a) gives a written notice to the client identifying the property and
stating that the broker intends to deposit the property as security for a loan
or advance to the broker; and
(b) deposits the property as security for a loan or advance to the broker,
being a loan or advance of an amount that does not exceed the amount owed to the
broker by the client on the day of the receipt by the broker of the
property.
(3) Where:
(a) a futures broker has given a notice to a person as mentioned in
subsection (2) and has deposited the property referred to in the notice as
security for a loan or advance; and
(b) the person:
(i) has paid to the broker the amount owed by the person to the broker at
the time the property was so deposited; and
(ii) requests the broker to withdraw the property from deposit;
the broker must, as soon as practicable after the request, withdraw the
property from deposit, but nothing in this subsection prevents the broker from
redepositing the property, as permitted by subsection (2), as a security
for a loan or advance.
(4) Where a futures broker deposits as security for a loan or advance made
to the broker property of a kind referred to in subsection (1), the broker
must, at the end of the period of 3 months after the day on which the property
is deposited, and at the end of each subsequent period of 3 months if the
property is still on deposit, send to the person whose property it is written
notice to that effect.
(1) Within 1 month after becoming the holder of a futures brokers licence,
a futures broker (other than an Australian ADI) must 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 the broker’s financial statements.
(2) Subject to this section, a person must not:
(a) consent to be appointed as auditor of a futures broker; or
(b) act as auditor of a futures broker; or
(c) prepare a report required by this Act to be prepared by an auditor of
a futures broker;
if:
(d) the person is not a registered company auditor; or
(e) the person, or a body corporate in which the person has a substantial
holding, is indebted in an amount exceeding $5,000 to the futures broker or, if
the futures broker is a body corporate, to a body corporate related to the
futures broker; or
(f) the person is a partner or employee of the futures broker;
or
(g) in a case where the futures broker is a body corporate—the
person is:
(i) an officer of the body; or
(ii) a partner, employer or employee of an officer of the body;
or
(iii) a partner or employee of an employee of an officer of the
body.
(3) Subject to this section, a firm must not:
(a) consent to be appointed as an auditor of a futures broker;
or
(b) act as auditor of a futures broker; or
(c) prepare a report required by this Act to be prepared by an auditor of
a futures broker;
unless:
(d) at least one member of the firm is a registered company auditor who is
ordinarily resident in Australia; and
(e) where the business name under which the firm is carrying on business
is not registered under a law of a State or Territory relating to the
registration of business names—there has been lodged a return in the
prescribed form showing, in relation to each member of the firm, the
member’s full name and address as at the time when the firm so consents,
acts or prepares a report; and
(f) no member of the firm, and no body corporate in which any member of
the firm has a substantial holding, is indebted in an amount not exceeding
$5,000 to the futures broker or, if the futures broker is a body corporate, to a
body corporate that is related to the futures broker; and
(ga) no member of the firm is a partner or employee of the futures broker;
and
(g) in a case where the futures broker is a body corporate—no member
of the firm is:
(i) an officer of the body; or
(ii) a partner, employer or employee of an officer of the body;
or
(iii) a partner or employee of an employee of an officer of the body;
and
(h) in a case where the futures broker is a body corporate—no
officer of the body receives any remuneration from the firm for acting as a
consultant to it on accounting or auditing matters.
(4) For the purposes of paragraphs (2)(e) and (3)(f), disregard a
debt owed by a natural person to a body corporate if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under the Life Insurance Act
1995; and
(b) the debt arose because of a loan that the body corporate or entity
made to the person in the ordinary course of its ordinary business;
and
(c) the person used the amount of the loan to pay the whole or part of the
purchase price of premises that the person uses as their principal place of
residence.
(5) For the purposes of subsections (2) and (3), a person is taken to
be an officer of a body corporate if:
(a) the person is an officer of a related body corporate; or
(b) except where ASIC, if it thinks fit in the circumstances of the case,
directs that this paragraph not apply in relation to the person—the person
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 is not taken to be an
officer of a body corporate by reason only of being or having been the
liquidator of the body corporate or of a related body corporate.
(7) For the purposes of this section, a person is not taken to be an
officer of a body corporate by reason only of having been appointed as an
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 being or having been authorised 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 futures broker is taken to
be an appointment of all persons who are members of the firm and are registered
company auditors, whether resident in Australia or not, at the date of the
appointment.
(9) Where a firm that has been appointed as auditor of a futures broker 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 taken under subsection (8) to be an auditor of
the broker and who has so retired or withdrawn from the firm as previously
constituted is taken to have resigned as auditor of the company as from the day
of the person’s 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 1216 does not apply to that
resignation; and
(b) a person who is a registered company auditor and who is so admitted to
the firm is taken to have been appointed as an auditor of the broker as from the
day of 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 broker;
but nothing in 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 futures broker that is taken by
subsection (8) to have been made by reason of the appointment of the firm
as auditor of the broker 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 futures broker is not taken to be duly made or given
unless it is signed, in the firm name and in the name of the member concerned,
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 taken to be made by virtue
of subsection (9)) or under subsection (16), the futures broker must,
within 14 days after the appointment, lodge with ASIC a notice in writing
stating that the broker has made the appointment and specifying the name of the
person or firm.
(13) Without limiting the generality of section 1311, if, in
contravention of this section, a firm consents to be appointed, or acts as, an
auditor of a futures broker or prepares a report required by this Act to be
prepared by an auditor of a futures broker, each member of the firm is guilty of
an offence.
(14) A person must not:
(a) if the person has been appointed auditor of a futures
broker—knowingly disqualify himself or herself while the appointment
continues from acting as auditor of the broker; or
(b) if the person is a member of a firm that has been appointed auditor of
a futures broker—knowingly disqualify the firm while the appointment
continues from acting as auditor of the broker.
(15) An auditor of a futures broker holds office until death, until
removal or resignation from office in accordance with section 1216 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 futures broker, if there is no surviving or continuing auditor of the broker,
the broker must 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 futures broker must not appoint a person or firm as auditor of the
broker unless that person or firm has, before the appointment, consented by
notice in writing given to the broker to act as auditor and has not withdrawn
the consent by notice in writing given to the broker.
(19) This section does not apply in relation to a body corporate (except a
proprietary company) in relation to which section 327 applies.
(1) A futures broker may, with the consent of ASIC, remove an auditor of
the broker from office.
(2) An auditor of a futures broker may, by notice in writing given to the
broker, resign as auditor of the broker if:
(a) the auditor has, by notice in writing given to ASIC, applied for
consent to the resignation and, at or about the same time as the notice was
given to ASIC, notified the broker in writing of the application to ASIC;
and
(b) the auditor has received the consent of ASIC.
(3) ASIC must, as soon as practicable after receiving a notice from an
auditor under subsection (2), notify the auditor and the futures broker
whether it consents to the resignation of the auditor.
(4) A statement made by an auditor in an application to ASIC under
subsection (2) or in answer to an inquiry by ASIC 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 1308; and
(b) may not be made the ground of a prosecution (other than a prosecution
for an offence against section 1308), action or suit against the
auditor;
and a certificate by ASIC that the statement was made in the application or
in answer to an inquiry by ASIC is conclusive evidence that the statement was so
made.
(5) Subject to subsection (6), the resignation of an auditor takes
effect:
(a) on the date (if any) specified for the purpose in the notice of
resignation; or
(b) on the date on which ASIC gives its consent to the resignation;
or
(c) on the date (if any) fixed by ASIC 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
1215(3)(d), of acting as auditor of a futures broker, the member so retiring or
withdrawing is, if not disqualified from acting as auditor of the broker, taken
to be the auditor of the broker until the member obtains the consent of ASIC to
the retirement or withdrawal.
(7) This section does not apply in relation to a body corporate (except a
proprietary company) in relation to which section 329 applies.
The reasonable fees and expenses of an auditor of a futures broker are
payable by the broker.
(1) In this section:
financial year, in relation to a futures broker,
means:
(a) if the broker is a natural person—a period of 12 months ending
on 30 June in a year; or
(b) if the broker is a body corporate—a period that is a financial
year of the body corporate because of the definition of financial
year in section 9.
prescribed day, in relation to a financial year of a futures
broker, means the day that is:
(a) if the broker is a natural person—2 months; or
(b) if the broker is a body corporate—3 months;
after the end of that financial year or, if an extension is approved under
subsection (3), the day on which the extended period ends.
(2) A futures broker (other than an Australian ADI) must, in respect of
each financial year, other than a financial year that ended before the date on
which the broker commenced to carry on business as a futures broker, prepare a
true and fair profit and loss statement and balance sheet on the basis of such
accounting principles (if any) and containing such information and matters as
are prescribed for the purposes of this subsection and lodge them with ASIC
before the prescribed day for that financial year, together with an
auditor’s report containing such information and matters as are prescribed
for the purposes of this subsection and such other information and matters as
the auditor thinks fit to include in the report.
(3) ASIC may, on application made by a futures broker and the auditor of
the broker before the end of the period referred to in paragraph (a) or
(b), as the case requires, of 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 end 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 ASIC
imposes.
(4) Where an approval under subsection (3) in relation to a futures
broker is given subject to conditions, the broker must comply with those
conditions.
(1) An auditor of a futures broker has a right of access at all reasonable
times to the financial records and other records, including any register, of the
broker, and is entitled to require from the broker or, in the case of a futures
broker that is a body corporate, from any executive officer of the broker, such
information and explanations as the auditor desires for the purposes of
audit.
(2) A futures broker, or an executive officer of a futures broker that is
a body corporate, must not, without lawful excuse:
(a) refuse or fail to allow an auditor of the broker access, in accordance
with subsection (1), to financial records or other records, including any
register, of the broker; or
(b) refuse or fail to give information, or an explanation, as and when
required under subsection (1); or
(c) otherwise hinder, obstruct or delay an auditor of the broker in the
performance or exercise of the auditor’s duties or powers.
(1) Where an auditor, in the performance of the duties of auditor of a
futures broker, becomes aware of a prescribed matter, the auditor must, within 7
days after becoming aware of that matter, lodge a written report on the matter
and send a copy of the report to:
(a) the broker; and
(b) each futures exchange of which the broker is a member and to each
clearing house (if any) for that futures exchange; and
(c) each futures association of which the broker is a member, unless the
futures association is also a futures exchange of which the broker 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 futures broker to meet the broker’s obligations
as a broker; or
(b) constitutes or may constitute a contravention of section 1209,
1213 or 1214; or
(c) constitutes or may constitute a contravention of a condition of a
licence held by the futures broker.
(1) Where, in relation to a futures broker who is a member of a futures
exchange, the futures exchange becomes aware of a prescribed matter, the futures
exchange must, as soon as practicable after becoming aware of the matter, lodge
a written report on the matter and send a copy of the report to the
broker.
(2) Subsection (1) applies:
(a) in relation to a clearing house for a futures exchange and a member of
the clearing house; and
(b) in relation to a futures association and a member of the futures
association (unless the futures association is also a futures
exchange);
in the same manner as it applies in relation to a futures exchange and a
member of the futures exchange.
(3) In this section, prescribed matter, in relation to a
futures broker, means a matter that, in the opinion of the futures exchange,
clearing house or futures association concerned:
(a) has adversely affected, is adversely affecting, or may adversely
affect, the ability of the broker to meet the broker’s obligations as a
broker; or
(b) constitutes or may constitute a contravention of section 1209,
1213 or 1214; or
(c) constitutes or may constitute a contravention of a condition of a
licence held by the broker; or
(d) constitutes a failure to make, in accordance with Part 8.6,
contributions to a fidelity fund.
(1) An auditor of a futures broker has qualified privilege in respect
of:
(a) any statement made, orally or in writing, in the course of performing
the duties of an auditor; or
(b) the lodging of a report, or the sending of a report under
section 1220 to the futures broker, a futures exchange, a clearing house
for a futures exchange, or a futures association.
(2) A futures exchange, a clearing house for a futures exchange, a futures
association, or an officer of a futures exchange, of a clearing house for a
futures exchange, or of a futures association, has qualified privilege in
respect of:
(a) any statement made, orally or in writing, in the course of performing
the duties imposed by section 1221; or
(b) the lodging of any report with ASIC, or the sending of any report to a
futures broker, under section 1221.
(3) A person has qualified privilege in respect of the publishing
of:
(a) a statement made by an auditor of a futures broker as mentioned in
paragraph (1)(a), or by a futures exchange, a clearing house for a futures
exchange, a futures association, or an officer, as mentioned in
paragraph (2)(a); or
(b) a document prepared by an auditor of a futures broker in the course of
performing the duties of an auditor; or
(c) a document prepared by a futures exchange, a clearing house for a
futures exchange, a futures association, or an officer of a futures exchange, of
a clearing house for a futures exchange, or of a futures association, in the
course of performing the duties imposed by section 1221; or
(d) a document required by or under this Chapter to be lodged, whether or
not the document has been lodged.
Nothing in this Part prevents a futures exchange or futures association
imposing on members of that futures exchange or futures association any
obligations or requirements (not being obligations or requirements inconsistent
with this Act) that the futures exchange or futures association thinks fit with
respect to:
(a) the audit of financial statements (including the audit of financial
statements by an auditor appointed by the futures exchange or futures
association); or
(b) the information to be given in reports from auditors; or
(c) the keeping of books.
(1) Where the Court is satisfied that:
(a) there are reasonable grounds for believing that:
(i) there is a deficiency in an account that is, or has at any time been,
a clients’ segregated account of a person; and
(ii) the person was, when the deficiency occurred, a futures broker or a
member of a futures organisation; or
(b) there has been, at a time when a person was a futures broker or a
member of a futures organisation, undue delay, or unreasonable refusal, on the
person’s part in paying, applying or accounting for money as required by
this Chapter; or
(c) a person has, at a time when the person was a futures broker or a
member of a futures organisation, failed to pay money into a clients’
segregated account of the person as required by this Chapter; or
(d) a person who is, or has at any time been, a futures broker or a member
of a futures organisation, is carrying on, or last carried on, as the case
requires, a futures broking business otherwise than in partnership
and:
(i) in any case—the last futures brokers licence held by the person
has been revoked or suspended; or
(ii) in any case—the person no longer carries on a futures broking
business; or
(iii) if the person is a natural person—the person has died, or is
incapable, because of physical or mental incapacity, of managing his or her
affairs;
the Court may by order restrain dealings in respect of specified bank
accounts that the person holds or maintains (whether in Australia or elsewhere),
subject to such terms and conditions as the Court imposes.
(2) An order under subsection (1) may only be made on an application
by ASIC or by the futures organisation (if any) concerned.
(4) 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.
(5) Where ASIC makes an application to the Court for the making of an
order under subsection (1), the Court must not require ASIC, as a condition
of granting an interim order under subsection (4), to give any undertaking
as to damages.
Where an order made under section 1224 is directed to a banker or a
body corporate, the banker or body corporate must:
(a) disclose to the applicant for the order every account kept by the bank
or body corporate in the name of the person to whom the order relates, and any
account that the banker or body corporate reasonably suspects is held or kept by
the bank or body corporate for the benefit of that person; and
(b) permit the applicant for the order 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 or the like books in the possession
of the body corporate.
Where an order is made under section 1224, the Court may, on the
application of ASIC, a futures organisation or a person affected by the order,
make further orders:
(a) dealing with such ancillary matters as the Court considers necessary
or desirable; and
(b) directing that all or any of the money in an account affected by an
order so made be paid by the bank or body corporate to ASIC or a person
nominated by ASIC, on such terms and conditions as the Court thinks fit;
and
(c) discharging or varying the order.
(1) An order made under section 1226 may include directions to
the person to whom the money is paid directing that that person:
(a) must cause the money to be paid into a trust account; or
(b) is authorised to prepare a scheme for distributing the money to
persons who claim, during a period of 6 months after ASIC or that other person
receives the money, to be entitled to the money and satisfy ASIC or that other
person that they are so entitled; or
(c) where the money received is insufficient to pay all proved claims,
may, notwithstanding any rule of law or equity to the contrary, apportion the
money among the claimants in proportion to their proved claims and show in the
scheme how the money is so apportioned.
(2) Where a person prepares a scheme for distribution of money pursuant to
subsection (1), the person must apply to the Court for approval of the
scheme and for directions with respect to it.
(3) The Court may give such directions as to the money held in a trust
account pursuant to subsection (1), as to the persons to whom and in what
amounts the whole or any portion of that money must be paid, and as to the
payment of the balance of the money (if any) remaining in the account, as the
Court thinks fit.
(1) A futures organisation must keep a fidelity fund, and the board of the
futures organisation must administer the fidelity fund.
(2) The assets of a fidelity fund of a futures organisation are the
property of the futures organisation, but must be kept separately from all other
property of the futures organisation and must be held in trust for the purposes
set out in this Part.
(1) The fidelity fund of a futures organisation consists of:
(a) in the case of a fidelity fund established before the commencement of
this Act—the money, and other property, of which the fund consisted
immediately before that commencement; and
(b) in the case of a fidelity fund established after the commencement of
this Act—any amount that is paid to the credit of the fund by the futures
organisation on the establishment of the fund; and
(ba) money paid into the fidelity fund as required by paragraphs
1234(4)(d) and 1235(4)(d); and
(c) money paid to the futures organisation, in accordance with this Part
or the business rules of the futures organisation, by contributing members of
the futures organisation; and
(d) the interests and profits from time to time accruing from the
investment of the fidelity fund; and
(e) money paid into the fidelity fund by the futures organisation;
and
(f) money recovered by or on behalf of the futures organisation in the
exercise of a right of action conferred by this Part; and
(g) money paid by an insurer pursuant to a contract of insurance or
indemnity entered into by the futures organisation under section 1249;
and
(h) all other money lawfully paid into the fund.
(2) Where a futures organisation has, under paragraph (1)(b), paid an
amount to the credit of its fidelity fund:
(a) the Minister may approve in writing, on such conditions (if any) as
are specified in the approval, the repayment of the whole, or a specified part,
of the amount from the fidelity fund to the general funds of the futures
organisation; and
(b) if the Minister does so, the whole, or the specified part, as the case
may be, of the amount may, in accordance with the conditions (if any) so
specified, be so repaid.
The money in a fidelity fund must, until invested or applied in
accordance with this Part, be kept in a separate account with an Australian
ADI.
Subject to this Part, there must be paid out of the fidelity fund of a
futures organisation in such order as the board of the futures organisation
deems proper:
(a) the amount of all claims, including costs, allowed by the board or
established against the futures organisation under this Part; and
(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 futures organisation or the board of the rights, powers and
authorities vested in it by this Part in relation to the fund; and
(c) all premiums payable in respect of contracts of insurance or indemnity
entered into by the futures organisation under section 1249; and
(d) the expenses incurred in the administration of the fund, including the
salaries and wages of persons employed by the futures organisation or the board
in relation to the fund; and
(e) all other money payable out of the fund in accordance with the
provisions of this Chapter.
(1) A futures organisation must establish and keep proper accounts of its
fidelity fund and must, within the period of 3 months that next succeeds the end
of its financial year, cause a balance-sheet in respect of those accounts to be
made out as at the end of that financial year.
(2) A futures organisation must appoint a registered company auditor to
audit the accounts of the fidelity fund.
(3) The auditor appointed by a futures organisation must audit the
accounts of the fidelity fund and must audit each balance-sheet and cause a
report on the accounts and balance-sheet to be laid before the board of the
futures organisation not later than 1 month after the balance-sheet is made
out.
(4) A futures organisation must give to ASIC a copy of each report laid
before the board of the futures organisation under this section and of the
balance-sheet to which the report relates within 14 days after the report was so
laid before the board.
(1) The board of a futures organisation may, by resolution, appoint a
management sub-committee of not fewer than 3 and not more than 5 persons, at
least one of whom is also a member of the board.
(2) The board of a futures organisation 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).
(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 board of a futures organisation under this section
may at any time, by resolution of the board, be varied or revoked.
(5) The board of a futures organisation 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.
(6) A delegation by the board of a futures organisation under this section
does not prevent the exercise of a power, authority or discretion by that
board.
(1) A person is not to be admitted to membership of a futures organisation
unless:
(a) in any case—the person has paid to the futures organisation, as
agent for the Commonwealth, the levy known as futures organisation (application
for membership) fidelity fund contribution; or
(b) if the organisation is not a futures exchange—the person is
already a member of a futures exchange.
Note: For the imposition and amount of the levy referred to
in paragraph (a), see the Corporations (Futures Organisations Levies)
Act 2001.
(2) A contributing member of a futures organisation must, on or before
31 March in each year, pay to the futures organisation, as agent for the
Commonwealth, the levy known as futures organisation (annual membership)
fidelity fund contribution.
Note: For the imposition and amount of the levy, see the
Corporations (Futures Organisations Levies) Act 2001.
(3) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(1) of the Corporations (Futures
Organisations Levies) Act 2001, to a futures organisation as agent for the
Commonwealth:
(a) the futures organisation must pay an amount equal to the levy amount
to the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the futures organisation; and
(c) the Commonwealth must pay the amount so appropriated to the futures
organisation; and
(d) the futures organisation must pay the amount it receives under
paragraph (c) into its fidelity fund.
(4) A payment of an amount to a futures organisation as required by
paragraph (3)(c) in respect of a particular levy amount is subject to a
condition that, if the Commonwealth becomes liable to refund the whole or a part
of the levy amount, the future organisation must pay to the Commonwealth an
amount equal to the amount that the Commonwealth is liable to refund. The
futures organisation may pay, out of its fidelity fund, any amount so required
to be paid to the Commonwealth.
(5) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to a
futures organisation as agent for the Commonwealth. However, the operation of
that Act in relation to the following payments is not affected.
(a) the payment of an amount to the Commonwealth as required by
paragraph (3)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (3)(c).
The futures organisation must, in accordance with the regulations, notify
the Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(6) An amount payable by a futures organisation as required by
paragraph (3)(a) may be set off against an amount payable to the futures
organisation as required by paragraph (3)(c).
(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 1231,
the futures organisation concerned may determine that levy known as futures
organisation additional fidelity fund contribution is to be paid by specified
contributing members of the futures organisation. When such a determination is
made, the levy is payable to futures organisation, as agent for the Commonwealth
in accordance with this section.
Note: For the imposition and amount of the levy, see the
Corporations (Futures Organisations Levies) Act 2001.
(2) An amount of levy payable under subsection (1) must be paid
within the time and in the manner specified by the futures organisation either
generally or in relation to a particular case.
(3) If a levy is imposed by subsection 6(2) of the Corporations
(Futures Organisations Levies) Act 2001 on a person, the levy must be paid
by the time by which the levy under subsection 1235(1) of the old Corporations
Law referred to in that subsection was required to be paid.
(4) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(2) of the Corporations (Futures
Organisations Levies) Act 2001, to a futures organisation as agent for the
Commonwealth:
(a) the futures organisation must pay an amount equal to the levy amount
to the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the futures organisation; and
(c) the Commonwealth must pay the amount so appropriated to the futures
organisation; and
(d) the futures organisation must pay the amount it receives under
paragraph (c) into its fidelity fund.
(5) A payment of an amount to a futures organisation as required by
paragraph (4)(c) in respect of a particular levy amount is subject to a
condition that, if the Commonwealth becomes liable to refund the whole or a part
of the levy amount, the futures organisation must pay to the Commonwealth an
amount equal to the amount that the Commonwealth is liable to refund. The
futures organisation may pay, out of its fidelity fund, any amount so required
to be paid to the Commonwealth.
(6) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to a
futures organisation as agent for the Commonwealth. However, the operation of
that Act in relation to the following payments is not affected.
(a) the payment of an amount to the Commonwealth as required by
paragraph (4)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (4)(c).
The futures organisation must, in accordance with the regulations, notify
the Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(7) An amount payable by a futures organisation as required by
paragraph (4)(a) may be set off against an amount payable to the futures
organisation as required by paragraph (4)(c).
(3) A futures organisation may determine in writing that subsection
1234(1) does not apply in relation to the futures organisation in relation to
specified persons.
(4) A futures organisation may determine in writing that subsection
1234(2) does not apply in relation to the futures organisation in relation to
specified contributing members of the futures organisation.
(5) A determination in force under subsection (3) or (4) has effect
accordingly.
(1) A futures organisation may, from its general funds, give or advance,
on such terms as the board of the futures organisation thinks fit, any sums of
money to its fidelity fund.
(2) Money that is advanced under subsection (1) may at any time be
repaid from the fidelity fund to the general funds of the futures
organisation.
Money in a fidelity fund of a futures organisation that is not
immediately required for the purposes of the fund may be invested by the futures
organisation in any manner in which trustees are for the time being authorised
by a law in force in a State or Territory in this jurisdiction to invest trust
funds or on deposit with an eligible money market dealer.
(1) Subject to this Part, where:
(a) a person (in this subsection called the futures person)
suffers pecuniary loss at a particular time because of a defalcation, or because
of fraudulent misuse of money or other property, by:
(i) a person who is at that time a contributing member of a futures
organisation; or
(ii) a director, partner, officer or employee of a person who is at that
time a contributing member of a futures organisation; or
(iii) a partner in, or employee of, a partnership that is at that time a
contributing member of a futures organisation; and
(b) the loss is suffered in respect of money or other property that was,
in connection with the contributing member’s dealings in futures contracts
(whether or not any of those dealings was effected on a futures market),
entrusted to or received by the contributing member, or a director, partner,
officer or employee of the contributing member (whether before or after the
commencement of this section):
(i) for or on behalf of the futures person or another person; or
(ii) because the contributing member was trustee of the money or other
property;
the fidelity fund of the futures organisation must be applied for the
purpose of compensating the futures person.
(2) The reference in paragraph (1)(b) to a partner of a contributing
member of a futures organisation is, in a case where the contributing member is
a partnership, a reference to a partner in the partnership.
(3) Subject to this Part, where a right to compensation does not arise
under subsection (1), a fidelity fund of a futures organisation may, if the
board of the futures organisation thinks fit, 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 the
official receiver or trustee, as the case may be, certifies is required in order
to make up or reduce the total deficiency arising because the available assets
of a bankrupt who is a contributing member of the futures organisation are
insufficient to satisfy the debts arising from dealings in futures contracts
that have been proved in the bankruptcy by creditors of the bankrupt.
(4) Subsection (3) applies in the case of a contributing member of a
futures organisation who has made a composition with the member’s
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 a contributing member of a futures organisation 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 is taken to be a
reference to a controlling trustee within the meaning of that Part;
and
(b) the reference to debts proved in the bankruptcy is taken to be a
reference to provable debts in relation to the composition or deed within the
meaning of that Part; and
(c) a reference to the bankrupt is taken to be a reference to the person
who made the composition or executed the deed.
(5) Subject to this Part, where a right to compensation does not arise
under subsection (1), a fidelity fund of a futures organisation may, if the
board of the futures organisation thinks fit, be applied for the purpose of
paying to the liquidator of a body corporate that is a contributing member of
the futures organisation and that has commenced to be wound up, an amount not
greater than the amount that the liquidator certifies is required to make up or
reduce the total deficiency arising because the available assets of the body
corporate are insufficient to satisfy the debts of the body corporate arising
from dealings in futures contracts that have been proved in the winding up by
creditors of the body corporate.
(6) Money paid pursuant to subsection (3) or (5) is so paid only on
condition that it is applied by the official receiver, trustee or liquidator
towards satisfaction of debts arising from dealings in futures contracts and for
no other purpose.
(7) Subject to subsection (9), the amount, or the sum of the amounts,
paid under this Part out of a fidelity fund of a futures organisation:
(a) for the purpose of compensating pecuniary loss as mentioned in
subsection (1); or
(b) for the purpose of making payments under subsection (3) or
(5);
must not exceed, in respect of a particular contributing member of the
futures organisation:
(c) unless paragraph (d) applies—$500,000; or
(d) if some other amount is prescribed, for the purposes of this
subsection, in relation to the futures organisation, a class of futures
organisations that includes the futures organisation, or futures organisations
generally—that amount.
(8) For the purposes of calculating the sum referred to in
subsection (7), an amount that is paid from a fidelity fund is, to the
extent to which that amount is repaid to the fund, to be disregarded.
(9) If a futures organisation considers, having regard to the ascertained
or contingent liabilities of its fidelity fund, that the assets of the fund so
permit, the futures organisation may apply out of the fund such sums in excess
of the amount limited by or under this section as the futures organisation, in
its discretion, thinks fit in or towards the compensation of persons who have
suffered pecuniary loss as mentioned in subsection (1) or making a payment
under subsection (3) or (5).
(10) Where:
(a) money or other property has been entrusted to, or received
by:
(i) a person or partnership; or
(ii) a director, partner, officer or employee of a person; or
(iii) a partner in or employee of, a partnership;
being a person who, or a partnership that, has at any time been but is no
longer a contributing member of a futures organisation; and
(b) immediately before that person or partnership last ceased to be a
member or member organisation of the futures organisation, he, she or it was a
contributing member of the futures organisation; and
(c) because of a defalcation, or the fraudulent misuse of money or other
property by:
(i) that person or a director, partner, officer or employee of that
person; or
(ii) a partner in, or employee of, that partnership;
as the case may be, the person by or from whom the money or other
property was so entrusted or received suffered pecuniary loss; and
(d) at the time when the money or other property was so entrusted or
received, the person suffering the pecuniary loss believed, on reasonable
grounds, that that person or partnership was at that time a member or member
organisation of the futures organisation;
that person or partnership is, for the purposes of this section (other than
this subsection and subsection (11)), taken to have been, when the
pecuniary loss was suffered, a contributing member of the futures
organisation.
(11) Where:
(a) a person who or a partnership that has at any time been, but is no
longer, a contributing member of a futures organisation has incurred a debt
arising from dealings in futures contracts; and
(b) at the time when the debt was incurred, the creditor, or one or more
of the creditors, in relation to the debt believed on reasonable grounds that
that person or partnership was at that time a member or member organisation of
the futures organisation;
a reference in this section (other than subsection (10) and this
subsection) to a contributing member of the futures organisation is, for the
purpose of determining the application of subsection (3) or (5) in relation
to that creditor or those creditors, as the case may be, in relation to that
debt, taken to include a reference to that person or partnership.
(12) A reference in this section to a defalcation, or to a fraudulent
misuse of money or other property, is a reference to a defalcation, or to such a
fraudulent misuse, wherever and whenever occurring.
(1) Subject to this Part, a person who suffers pecuniary loss as mentioned
in subsection 1239(1) is entitled to claim compensation from the fidelity fund
of a futures organisation whose fidelity fund is, pursuant to that subsection,
required to be applied to compensate the person, and to take proceedings in the
Court as provided in this Part against the futures organisation to establish
that claim.
(2) A person does not have a claim against a fidelity fund of a futures
organisation in respect of:
(a) pecuniary loss suffered before 1 July 1986; 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 organisation of the futures
organisation.
(3) Subject to this Part, the amount that a claimant is entitled to claim
as compensation from a fidelity fund of a futures organisation is the amount of
the actual pecuniary loss suffered by the claimant (including the reasonable
costs of, and disbursements incidental to, the making and proof of the claim)
less the total amount or value of all amounts or other benefits received or
receivable by the claimant 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 prescribed rate
calculated from and including the day on which the pecuniary loss was suffered
until the day on which the claim is satisfied.
(1) Where all persons who have submitted claims pursuant to
section 1240 have been fully compensated in accordance with the provisions
of this Part for pecuniary loss in relation to a contributing member of a
futures organisation, being pecuniary loss as mentioned in subsection 1239(1)
suffered in relation to money or other property, any partner of the contributing
member who has made payment to a person in compensation for loss suffered by the
person in relation to that money or property is taken to be subrogated to the
extent of that payment to all the rights and remedies of that person against the
fidelity fund of the futures organisation if the board of the futures
organisation, 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 of a contributing member of a futures organisation feels
aggrieved by the determination of a board under subsection (1), the partner
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 must, on the day on which the appellant lodges notice of
appeal with the Court, lodge a copy of the notice with the futures organisation
concerned.
(4) The Court must 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 the opinion having
regard to all the circumstances that the appellant was not a party to the
defalcation or fraudulent misuse of money or other property from which the
pecuniary loss arose and that the appellant acted honestly and reasonably in the
matter, it may order that the appellant, to the extent of any payment made by
the appellant, be subrogated to the rights and remedies, in relation to the
fidelity fund of the futures organisation concerned, of the person to whom the
appellant made such a payment.
(1) A futures organisation may cause to be published in a daily newspaper
circulating generally in each State and 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 futures
organisation in respect of a pecuniary loss must be made in writing to the
futures organisation:
(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 futures organisation
otherwise determines.
(3) A futures organisation, a member of a board of a futures organisation,
or a member or employee of a futures organisation, has qualified privilege in
respect of the publication of a notice under subsection (1).
(1) Subject to this Part, the board of a futures organisation may allow
and settle a proper claim for compensation from a fidelity fund of the futures
organisation at any time after the occurrence of the pecuniary loss in respect
of which the claim arose.
(2) Subject to subsection (3), a person must not commence proceedings
under this Part against a futures organisation without leave of the board
unless:
(a) the board has disallowed the person’s claim; and
(b) the claimant has exhausted all relevant rights of action and other
legal remedies for the recovery of the money or other property in respect of
which the pecuniary loss occurred, being rights and remedies that are available
against the member of the futures organisation 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, under
section 1240, against a person other than the futures
organisation.
(3) A person who has been refused leave by the board of a futures
organisation under subsection (2) may apply to the Court for leave to
commence proceedings against the futures organisation and the Court may make
such order in the matter as it thinks fit.
(4) The board of a futures organisation, after disallowing, whether wholly
or partly, a claim for compensation from the fidelity fund of the futures
organisation, must serve notice of the disallowance in the prescribed form on
the claimant or on the claimant’s solicitor.
(5) Proceedings against a futures organisation in respect of a claim that
has been disallowed by the board of the futures organisation must not be
commenced after the end 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
futures organisation.
(7) The board 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 board or the 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.
(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
must, 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 board 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.
The board of a futures organisation may at any time require a person to
produce and deliver any documents or statements of evidence necessary to support
a claim made or necessary for the purpose either of exercising its rights
against a contributing member of the futures organisation or a partner or the
partners in a partnership that is a contributing member of the futures
organisation 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 such documents or statements of evidence by the
first-mentioned person, the board may disallow any claim by the first-mentioned
person under this Part.
On payment out of a fidelity fund of a futures organisation of any money
in respect of a claim under this Part, the futures organisation is subrogated to
the extent of that payment to all the rights and remedies of the claimant in
relation to the loss suffered by the claimant from the defalcation or fraudulent
misuse of property.
Money or other property belonging to a futures organisation, other than
its fidelity fund, is not available for the payment of a claim under this Part,
whether the claim is allowed by the board of the futures organisation or is made
the subject of an order of the Court.
(1) Where the amount in a fidelity fund of a futures organisation 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 must, subject to subsection (2), be apportioned among
the claimants in such manner as the board of the futures organisation thinks
equitable, and such a claim so far as it then remains unpaid is taken to be
charged against future receipts of the fund and paid out of the fund when money
is 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 contributing member of
a futures organisation exceeds the total amount that may, pursuant to
section 1239, be paid under this Part in respect of that contributing
member, the total amount must be apportioned among the claimants in such manner
as the board 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 contributing member are
discharged.
(1) A futures organisation may enter into a contract with a person
carrying on fidelity insurance business whereby the futures organisation 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 contributing
members of the futures organisation generally, or in relation to particular
contributing members named in the contract, or in relation to contributing
members generally with the exclusion of particular contributing members named in
the contract.
(3) A futures organisation, a member or employee of a futures organisation
or of the board of a futures organisation, or a member of the management
sub-committee of the board of a futures organisation, has qualified privilege in
respect of the publication of a statement that a contract entered into under
this section does, or does not, as the case may be, apply in relation to that
member.
A claimant against a fidelity fund of a futures organisation 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 money paid by the insurer in accordance with such a
contract.
For the purposes of this Division, a futures contract concerns a body
corporate if, and only if:
(a) the futures contract is a commodity agreement and a commodity to which
it relates is securities of the body; or
(b) the futures contract is an adjustment agreement and a state of affairs
to which it relates concerns the price of securities of the body, or the prices
of a class of securities that includes securities of the body, at a particular
time.
(1) For the purposes of this Division, a person is connected with a body
corporate (in this subsection called the relevant body corporate)
if the person is a natural person and:
(a) is an officer of the relevant body corporate or of a related body
corporate; or
(b) has a substantial holding in the relevant body corporate or in a
related body corporate; or
(c) occupies a position that may reasonably be expected to give the person
access to information of a kind referred to in subsection 1253(1) or (2) by
virtue of:
(i) any professional or business relationship existing between the person
(or the person’s employer or a body corporate of which the person is an
officer) and the relevant body corporate or a related body corporate;
or
(ii) the person being an officer of a body corporate that has a
substantial holding in the relevant body corporate or in a related body
corporate.
(2) For the purposes of subsection (1), officer, in
relation to a body corporate, includes:
(a) a director, secretary, executive officer or employee of the body
corporate; and
(b) a receiver, or a receiver and manager, of property of the body
corporate; and
(c) an administrator of the body corporate; and
(ca) an administrator of a deed of company arrangement executed by the
body corporate; and
(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.
(1) For the purposes of this Part, a person is precluded on a particular
day from dealing in a futures contract concerning a body corporate if, by virtue
of being, or having been at any time during the 6 months ending on that day,
connected with the body, the person has inside information in relation to that
futures contract.
(2) For the purposes of this Part, a person is also precluded on a
particular day from dealing in a futures contract concerning a body corporate
if, by virtue of being, or having been at any time during the 6 months ending on
that day, connected with another body corporate, the person has information
that:
(a) is inside information in relation to that futures contract;
and
(b) relates to any transaction (actual or expected) involving both those
bodies, or involving one of them and securities of the other.
(3) For the purposes of this Part, a person is also precluded from dealing
in a futures contract if the person:
(a) has inside information in relation to the futures contract;
and
(b) obtained the information, directly or indirectly, from another person;
and
(c) is aware, or ought reasonably to be aware, of facts or circumstances
by virtue of which that other person is precluded by subsection (1) or (2)
from dealing in the futures contract; and
(d) when the information was so obtained:
(i) was an associate of the other person; or
(ii) had with the other person an arrangement for the communication of
information of a kind referred to in subsection (1) or (2) with a view to a
dealing, by the first-mentioned person, by the other person, or by both of them
together, in that futures contract or a futures contract of the same kind as
that futures contract.
(1) Without prejudice to subsection 1253(3), but subject to this section,
while an officer of a body corporate is precluded from dealing in a futures
contract, the body is, for the purposes of this Part, also precluded from
dealing in the futures contract.
(2) A body corporate is not, merely because of information that an officer
of the body has, precluded by subsection (1) from dealing at a particular
time in a futures contract if:
(a) the decision to deal in the futures contract at that time was taken on
the body’s behalf by a person other than the officer; and
(b) the body 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 that person by a person who had the information;
and
(c) the information was not so communicated and no such advice was so
given.
(3) A body corporate is not, merely because of information that an officer
of the body has, precluded by subsection (1) from dealing in a futures
contract concerning another body corporate if the information:
(a) was obtained by the officer in the course of performing duties as an
officer of the first-mentioned body; and
(b) relates only to a proposed dealing by the first-mentioned body in
securities of, or a futures contract concerning, the other body.
For the purposes of this Part, a person who holds a futures brokers
licence is not precluded from dealing in a futures contract concerning a body
corporate if:
(a) the licensee enters into the dealing as agent for another person
pursuant to a specific instruction by that other person to enter into that
dealing; and
(b) the licensee has not given any advice to the other person in relation
to dealing in a futures contract concerning the body corporate; and
(c) the other person is not, in relation to the dealing, an associate of
the licensee.
(1) A person must not, while precluded from dealing in a futures contract,
deal in that futures contract.
(2) A person who, because of having particular information, is precluded
from dealing in a futures contract, must not, while so precluded, communicate
the information to another person if the first-mentioned person knows, or ought
reasonably to know, that the other person will make use of the information for
the purpose of dealing in that futures contract.
Where a prosecution is begun against a person for an offence because the
person had particular information and dealt in a futures contract in
contravention of section 1256, it is a defence if it is proved that the
other party to the dealing knew, or ought reasonably to have known, the
information before entering into the dealing.
A futures broker must not deal in a futures contract on behalf of another
person unless the dealing is effected:
(a) on a futures market of a futures exchange or recognised futures
exchange; or
(b) on an exempt futures market; or
(c) as permitted by the business rules of a futures organisation of which
the broker is a member.
A person must not, in this jurisdiction or elsewhere, take part in, be
concerned in, or carry out, whether directly or indirectly:
(a) a transaction (whether a dealing in a futures contract or not) that
has, is intended to have, or is likely to have; or
(b) 2 or more transactions (whether any of them is a dealing in a futures
contract or not) that have, are intended to have, or are likely to
have:
the effect of:
(c) creating an artificial price for dealings in futures contracts on a
futures market in this jurisdiction; or
(d) maintaining at a level that is artificial (whether or not it was
previously artificial) a price for dealings in futures contracts on a futures
market in this jurisdiction.
(1) A person must not, in this jurisdiction or elsewhere, create, cause to
be created, or do anything that is calculated to create, a false or misleading
appearance:
(a) of active dealing in futures contracts on a futures market in this
jurisdiction; or
(b) with respect to the market for, or the price for dealings in, futures
contracts on a futures market in this jurisdiction.
(2) A person must not, in this jurisdiction or elsewhere, by any
fictitious or artificial transactions or devices, maintain, inflate, depress, or
cause fluctuations in, the price for dealings in futures contracts on a futures
market in this jurisdiction.
(3) In determining whether a transaction is fictitious or artificial for
the purposes of subsection (2), the fact that the transaction is, or was at
any time, intended by the parties who entered into it to have effect according
to its terms is not conclusive.
A person contravenes this section if the person:
(a) in this jurisdiction or elsewhere, makes a statement, or disseminates
information, that is false or misleading in a material particular and is
likely:
(i) to induce other persons to deal in futures contracts on a futures
market in this jurisdiction; or
(ii) to have the effect of raising, lowering, maintaining or stabilising
the price for dealings in futures contracts, or in a class of futures contracts,
on a futures market in this jurisdiction; and
(b) when making the statement, or disseminating the information:
(i) is recklessly indifferent as to whether the statement or information
is true or false; or
(ii) knows, or ought reasonably to know, that the statement is false or
misleading in a material particular.
(1) A person must not:
(a) by making or publishing any statement, promise or forecast that the
person 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 the person knows to be false or misleading in a
material particular;
induce or attempt to induce another person to deal in a futures contract or
a class of futures contracts.
(7) It is a defence to a prosecution for an offence under this section
constituted by recording or storing information as mentioned in
paragraph (1)(d) if it is proved that, when the defendant so recorded or
stored the information, the defendant had no reasonable grounds for expecting
that the information would be available to any person.
Where:
(a) in this jurisdiction or elsewhere, a person circulates or
disseminates, or authorises or is concerned in the circulation or dissemination
of, any statement or information to the effect that the price for dealings in
futures contracts, or in a class of futures contracts, on a futures market in
this jurisdiction will, or is likely to, rise or fall or be maintained because
of a transaction, or other act or thing done, in relation to such futures
contracts or futures contracts included in that class, being a transaction, or
other act or thing, that constitutes a contravention of section 1259, 1260,
1261 or 1262; and
(b) the person, or an associate of the person:
(i) has entered into such a transaction or done such an act or thing;
or
(ii) has received, or expects to receive, directly or indirectly, a
consideration or benefit for circulating or disseminating, or authorising or
being concerned in the circulation or dissemination of, the statement or
information;
the first-mentioned person contravenes this section.
Where, in connection with a dealing or proposed dealing in a futures
contract by a futures broker on behalf of a client of the broker, a person
who:
(a) is the broker or an employee or agent of the broker; or
(b) has an interest, or is otherwise concerned in, the dealing or proposed
dealing;
does any of the following:
(c) defrauds the client;
(d) does an act, or omits to do an act, knowing that the client will be
deceived or misled, or with reckless indifference as to whether or not the
client will be deceived or misled, as a result of the act or omission;
(e) (without limiting the generality of paragraph (d)) makes a
statement, promise or forecast to the client, or makes an entry in a record
relating to the client or persons including the client:
(i) knowing that the statement, promise, forecast or entry is false,
misleading or deceptive in a material particular; or
(ii) with reckless indifference as to whether or not the statement,
promise, forecast or entry is false, misleading or deceptive in a material
particular;
the person contravenes this section.
(1) Where:
(a) a person who, because of having particular information, is precluded
by section 1253 from dealing in a futures contract deals, in contravention
of section 1256, in that futures contract; or
(b) a person, being a body corporate, deals, in contravention of
section 1256, in a futures contract at a time when an officer of the body
is, because of having particular information, precluded from dealing in that
futures contract;
the person is liable (whether or not the person has been convicted of an
offence in respect of the contravention) to compensate any other party to the
dealing who did not have that information for any loss sustained by that party
because of any difference between the price at which the dealing took place and
the price at which it would be likely to have taken place if that information
had been generally available.
(2) A person who contravenes any of sections 1259 to 1264 (inclusive)
(whether or not the person has been convicted of an offence in respect of the
contravention) is liable to pay compensation to any other person who, in dealing
in futures contracts, suffers loss because of the difference between the price
at which the dealing takes place and the price at which it would be likely to
have taken place if the contravention had not occurred.
(3) The amount of compensation for which a person is liable under
subsection (1) or (2) 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
(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 Part 9.4B because of the same act or
transaction—the amount of that loss 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 compensation for a loss
is not maintainable after the end of the period of 2 years commencing on the day
of completion of the dealing in which the loss occurred.
(6) ASIC may, if it considers it to be in the public interest to do so,
bring an action in the name of, and for the benefit of, a person for recovery of
compensation for a loss referred to in subsection (1) and suffered by that
person.
(7) Nothing in subsection (1) affects any liability that a person may
incur under any other law.
(1) In this section, a reference to the transmission by a futures broker
of instructions to deal in a class of futures contracts is a
reference:
(a) where the broker has direct access to the futures market on which the
instructions are to be executed—to the transmission of the instructions to
that futures market; or
(b) where the broker has access to the futures market on which the
instructions are to be executed only through another futures broker—to the
transmission of the instructions to that other futures broker.
(2) Subject to subsection (3), a futures broker must transmit in the
sequence in which they are received by the broker all instructions to deal in a
class of futures contracts at or near the market price for a futures contract of
that class prevailing immediately before execution of the
instructions.
(3) Where a futures broker proposes to deal in a class of futures
contracts on the broker’s own account and the person by whom or on whose
instructions the instructions for the dealing are to be transmitted is aware of
instructions of a client of the broker to deal in that class of futures
contracts at or near the market price for a futures contract of that class
prevailing at that time (being instructions that have not been transmitted),
that person must not transmit, and must not give instructions to any other
person to transmit, the instructions to give effect to the proposal of the
broker to deal in that class of futures contracts before the instructions of the
client are transmitted.
(4) A futures broker, or a director, partner, officer or employee of a
futures broker, must not, except:
(a) to the extent necessary to execute the instructions concerned;
or
(b) as required by this Act or any other law; or
(c) as required by the business rules of a futures organisation of which
the broker is a member;
disclose to any other futures broker, or to a person engaged or employed in
the business of the first-mentioned broker or of any other futures broker,
instructions of a client to deal in a class of futures contracts.
(5) A member of a futures exchange who is concerned in the execution, on a
trading floor of the futures exchange, of instructions to deal in futures
contracts must execute in the order in which they are received by the member all
instructions to deal in a class of futures contracts at or near the market price
for a futures contract of that class prevailing immediately before execution of
the instructions.
(6) Where:
(a) during a particular period, a futures broker transmits instructions
(whether or not those instructions consist of, or include, instructions giving
effect to a proposal of the broker to deal in the class of contracts concerned
on the broker’s own account) to deal in a class of futures contracts at or
near the market price for a futures contract of that class prevailing
immediately before execution of the instructions; and
(b) dealings in that class of futures contracts are effected pursuant to
those instructions;
the broker must, except so far as the business rules of a futures
organisation of which the broker is a member otherwise provide, allocate the
dealings to those instructions:
(c) in the sequence in which the dealings were effected; and
(d) in the sequence in which the broker transmitted those
instructions.
(7) A futures broker must maintain, in accordance with the regulations,
records that set out the prescribed particulars of:
(a) instructions by a client to deal in futures contracts; and
(b) the date and time of receipt, transmission and execution of those
instructions; and
(c) the person by whom those instructions are received, the person by whom
they are transmitted and the person by whom they are executed; and
(d) the date and time of receipt, transmission and execution of
instructions to deal in futures contracts on the broker’s own account;
and
(e) the person by whom instructions of the kind referred to in
paragraph (d) are received, the person by whom they are transmitted and the
person by whom they are executed;
and must retain those records for the prescribed period.
(8) Where:
(a) a futures broker transmits for execution on a futures market outside
Australia and the external Territories instructions to deal in futures
contracts; and
(b) it is not reasonably practicable for the broker to set out in the
records maintained by the broker pursuant to subsection (7) the prescribed
particulars of the date and time of execution of those instructions;
the broker must so set out those particulars as precisely as is reasonably
practicable.
(1) A person who is a futures broker or a futures adviser and an employee
of that person must not, as principals, jointly deal in, or agree to deal in,
futures contracts.
(2) A person who is a partner in a partnership that carries on a business
of dealing in futures contracts and an employee of the partnership must not, as
principals, jointly deal in, or agree to deal in, futures contracts.
(3) A person who is a partner in a partnership that carries on a futures
advice business and an employee of the partnership must not, as principals,
jointly deal in, or agree to deal in, futures contracts.
(4) A person who is a futures broker or a futures adviser must 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 deal in futures contracts; or
(b) the person giving the credit knows or has reason to believe that the
credit will be used for the purpose of dealing in futures contracts.
(5) A person who is a partner in a partnership that carries on a business
of dealing in futures contracts must 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 deal in futures contracts; or
(b) the person giving the credit knows or has reason to believe that the
credit will be used for the purpose of dealing in futures contracts.
(6) A person who is a partner in a partnership that carries on a futures
advice business must 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 deal in futures contracts; or
(b) the person giving the credit knows or has reason to believe that the
credit will be used for the purpose of dealing in futures contracts.
(7) A person who is an employee of a member organisation of a futures
exchange in connection with a business of dealing in futures contracts carried
on by the member organisation must not, as principal, deal, or agree to deal, in
futures contracts unless the member organisation acts as the agent of the person
in respect of the transaction.
(8) A reference in subsection (1) or (4) to an employee of a person
who is a futures broker or a futures adviser includes, in the case of a body
corporate that is a futures broker or a futures adviser, a reference to an
officer of the body corporate.
(9) The reference in subsection (7) to an employee of a member
organisation of a futures exchange includes:
(a) in the case of a member organisation that is a body corporate;
and
(b) in the case of a member organisation that is a partnership in which a
partner is a body corporate;
a reference to an officer of the body corporate.
(10) A reference in this section to an employee of a futures broker, a
futures adviser, a partnership or a member organisation of a futures exchange
includes a reference to a person who, pursuant to a subsisting agreement,
performs services for the futures broker, futures adviser, partnership or member
organisation in connection with dealings in futures contracts by the futures
broker, futures adviser, partnership or member organisation.
(1) Where:
(a) on the application of ASIC, it appears to the Court that a
person:
(i) has contravened this Chapter, or any other law of a State or Territory
in this jurisdiction relating to dealing in futures contracts; or
(ii) has contravened the conditions of a licence, the business rules of a
futures exchange, a clearing house or a futures association; or
(iii) is about to do an act with respect to dealing in futures contracts
that, if done, would be such a contravention; or
(b) on the application of a futures exchange, clearing house or futures
association, it appears to the Court that a person has contravened the business
rules of the futures exchange, clearing house or futures association, as the
case may be;
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:
(c) in the case of persistent or continuing breaches of this Chapter, or
of a law of a State or Territory in this jurisdiction relating to dealing in
futures contracts, or the conditions or restrictions of a licence, or of the
business rules of a futures exchange, clearing house or futures
association—an order restraining a person from carrying on a business of
dealing in futures contracts, acting as a futures adviser, holding himself,
herself or itself out as so carrying on business or so acting, or from doing an
act as a representative of a futures broker or of a futures adviser;
(d) an order restraining a person from acquiring, disposing of or
otherwise dealing in any class of futures contracts that is specified in the
order;
(e) an order appointing a receiver of property of a futures broker or of
property that is held by a futures broker for or on behalf of another person,
whether as trustee or otherwise;
(f) an order declaring a futures contract 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 paragraphs.
(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 ASIC makes an application to the Court for the making of an
order under subsection (1), the Court must not require ASIC or any other
person, as a condition of granting an interim order under subsection (2),
to give any undertaking as to damages.
(4) The Court must not make an order under subsection (1) if it is
satisfied that the order would unfairly prejudice a person.
(5) 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.
(6) A person appointed by order of the Court under subsection (1) as
a receiver of property of a futures broker:
(a) may require the broker to deliver to the person any property of which
the person has been appointed receiver or to give to the person all information
concerning that property that may reasonably be required; and
(b) may acquire and take possession of any property of which the person
has been appointed receiver; and
(c) may deal with any property that the person has acquired or of which
the person has taken possession in any manner in which the broker 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.
(7) In paragraph (1)(e) and subsection (6),
property, in relation to a futures broker, includes money or other
property entrusted to or received on behalf of any other person by the broker or
another person in the course of or in connection with a business of dealing in
futures contracts carried on by the futures broker.
(8) A person must not, without reasonable excuse, contravene:
(a) an order under this section that is applicable to the person;
or
(b) a requirement of a receiver appointed by order of the Court under
subsection (1).
(9) The Court may rescind, vary or discharge an order made by it under
this section or suspend the operation of such an order.
(1) A person who is not the holder of a futures brokers licence must not
take or use, or by inference adopt, the name or title of futures broker, 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 person is a
futures broker.
(2) A person who is not the holder of a futures brokers licence must
not:
(a) take or use, or by inference adopt; or
(b) have attached to, or exhibited at, any place;
a name, title or description implying, or tending to create the belief,
that the person is the holder of a futures brokers licence.
(3) A body corporate that is not:
(a) a futures exchange; or
(b) a recognised futures exchange;
must not take or use, or by inference adopt, the name or title of futures
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 is:
(c) a futures exchange; or
(d) a recognised futures exchange.
(4) A body corporate that is not a futures association must not take or
use, or by inference adopt, the name or title of futures association, 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 is a
futures association.
(1) A person who is required by a provision of this Act to maintain, make
or keep a register or a financial or other record in relation to a business
carried on by the person must preserve that register or record for the
prescribed period, whether or not the person ceases to carry on that business
before the end 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 a financial 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 a financial record, the 7 years after the transactions
covered by the record are completed.
(3) Subsections (1) and (2) do not apply in relation to a contract
note or copy of a contract note received or issued by a futures broker who is a
member of a futures exchange if the matters required by subsection 1206(4), (5)
or (6), as the case requires, to be included in the contract note are
recorded:
(a) by the futures exchange; or
(b) subject to such conditions (if any) as ASIC imposes, by the
broker;
in a manner approved by ASIC and the record of those matters is retained
for not less than 5 years.
(4) ASIC 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 ASIC under or for the purposes of this Act and that has
been in the possession of ASIC 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.
(1) A person who:
(a) in any case—conceals, destroys, mutilates or alters a book
relating to the business carried on by a futures broker or required under this
Act to be kept by the holder of a licence; or
(b) sends or takes, or causes the sending or taking of, the book out of
this jurisdiction or out of Australia;
contravenes this subsection.
(2) In a prosecution of a person for an offence under subsection (1),
it is a defence if it is established that the person did not act with intent to
defraud, to defeat the purposes of this Act or the ASIC 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 or the ASIC Act.
(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 1270 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 the person knows
to be false or misleading in a material particular; or
(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;
contravenes this subsection.
(2) In a prosecution of a person for an offence under subsection (1),
it is a defence if it is established that the person acted honestly and that in
all the circumstances the act or omission constituting the offence should be
excused.
A person required by this Chapter to keep a book or record must take
reasonable precautions for guarding against falsification of the book or record
and for facilitating discovery of any falsification.
For the purposes of this Chapter, the business rules of a body corporate
that is, or proposes to be, a futures association are such of the rules,
regulations and by-laws made by the body or contained in its constitution as
govern the activities and conduct of the body and its members in relation to the
body’s operation as a futures association.
For the purposes of this Chapter, the business rules of a body corporate
that provides, or proposes to provide, clearing house facilities for a futures
market are such of the rules, regulations and by-laws made by the body or
contained in its constitution as govern:
(a) the activities and conduct of the body and its members; and
(b) the activities and conduct of other persons in relation to the
body’s provision of clearing house facilities for a futures
market.
For the purposes of this Chapter, the business rules of a body corporate
that conducts, or proposes to establish or conduct, a futures market are such of
the rules, regulations and by-laws made by the body corporate or contained in
its constitution as govern:
(a) the activities and conduct of the body and its members; and
(b) the activities and conduct of each clearing house for the body;
and
(c) the activities and conduct of other persons in relation to each
futures market run by the body.
A person must not establish or conduct, assist in establishing or
conducting, or hold out that the person conducts, an unauthorised futures
market.
(1) A body corporate may apply to ASIC in writing for approval by the
Minister as a futures exchange.
(2) Where a body applies under subsection (1) of this section, the
Minister may by writing approve the body as a futures exchange if, and only if,
he or she is satisfied that:
(c) the body’s business rules make satisfactory provision:
(i) for the admission as members of persons licensed, or proposing to
apply to be licensed, under Part 8.3, or of a specified class of such
persons; and
(ii) for the qualifications for membership, including the necessary
standards of training and experience for:
(A) responsible officers of bodies corporate that; and
(B) natural persons who;
are, or propose to be, members;
(iii) for the manner in which members are to conduct their business of
dealing in futures contracts so as to ensure efficiency, honesty and fair
practice in relation to such dealing; and
(iiia) for the exclusion of a body corporate from membership where a
responsible officer of the body corporate would be excluded from membership;
and
(iv) for the exclusion of a person from membership where:
(A) if the person is a body corporate—a responsible officer, or an
employee, of the body corporate; or
(B) otherwise—the person or an employee of the person;
is not of good character and high business integrity; and
(v) for the expulsion, suspension or disciplining of a member for conduct
inconsistent with just and equitable principles in the transaction of business
or for a contravention of the body’s business rules or of this Chapter;
and
(vi) for an appropriate mechanism whereby a person whose application for
membership of the body is refused, or whose membership of the body is cancelled
or suspended, in circumstances where the person does not have a right to appeal
to the Court under subsection 1135(1) against the decision to refuse the
application, or to cancel or suspend the membership, as the case may be, may
appeal against the decision; and
(vii) for an appropriate mechanism whereby a person who has been
disciplined by the body otherwise than by way of cancellation or suspension of
the person’s membership of the body may appeal against the decision to
discipline the person; and
(viii) for the inspection and audit of the financial records that this
Chapter requires members to keep; and
(ix) with respect to the classes of futures contracts that may be dealt in
by members; and
(xi) prohibiting a member from accepting or executing, otherwise than in
accordance with the business rules, instructions from another person to deal in
futures contracts; and
(xii) prohibiting a member from dealing in futures contracts on behalf of
another person otherwise than in accordance with instructions accepted by the
member from the person; and
(xiii) prohibiting a member from dealing in futures contracts, on behalf
of another person, on a futures market of a futures exchange or of a recognised
futures exchange, otherwise than in accordance with the business rules of the
futures exchange or recognised futures exchange, as the case may be;
and
(xiv) prohibiting a member, except as permitted by the business rules,
from executing the instructions of another person to deal in futures contracts
unless the instructions are executed in such a manner that the dealing is
effected on a futures market of a futures exchange or of a recognised futures
exchange or on an exempt futures market; and
(xv) with respect to the conditions under which members may deal in
futures contracts; and
(xvi) for the equitable and expeditious settlement of claims and
grievances between members, being claims and grievances relating to the
transaction of business by members in their capacity as members; and
(xvii) for appropriate mechanisms for the conciliation and settlement of
disputes between members and their clients, being disputes concerning dealings
in futures contracts by members on behalf of their clients or concerning
transactions between members and their clients in connection with such dealings;
and
(xviii) generally for carrying on the business of the proposed futures
exchange with due regard for the interests and protection of the public;
and
(d) there will be enough money in the body’s fidelity fund to make
the payments out of the fund that may reasonably be expected to be necessary for
the purposes of Part 8.6; and
(e) the interests of the public will be served by granting the
application.
(1) The Minister may by writing declare a specified futures market to be,
subject to any specified conditions, an exempt futures market.
(1A) A person must not contravene a condition specified in a declaration
in force under this section.
(1B) If a person has contravened a condition specified in a declaration in
force under this section, the Court may, on ASIC’s application, order the
person to comply with the condition.
(2) Without limiting the matters to which the Minister may have regard in
considering whether to vary or revoke a declaration in force under this section,
he or she may, in so considering, have regard to a breach of a condition
specified in the declaration.
A person must not provide, or hold out that the person provides, clearing
house facilities for a futures market (other than an exempt futures market)
unless:
(a) the futures market is conducted by a futures exchange; and
(b) the person is a body corporate; and
(c) an approval of the person under section 1131 as a clearing house
for that futures exchange is in force.
(1) A body corporate that proposes to provide clearing house facilities
for a futures market of a futures exchange may apply to ASIC in writing for
approval by the Minister as a clearing house for that futures
exchange.
(2) Where a body applies under subsection (1), the Minister may by
writing approve the body as a clearing house for the futures exchange if, and
only if, he or she is satisfied that:
(b) the body’s business rules are satisfactory, in particular such
of those business rules as relate to the registration of futures contracts made
on a futures market of the futures exchange; and
(c) the body’s business rules make satisfactory provision for the
expulsion, suspension or disciplining of members for a contravention of the
business rules or for a contravention of this Chapter; and
(d) the interests of the public will be served by granting the
application.
(3) Without limiting the matters to which the Minister may have regard in
considering an application under subsection (1), he or she may, in
considering the application, have regard to any business rules of the applicant
that relate to the guaranteeing, to members of the applicant, of the performance
of futures contracts made on a futures market of the futures
exchange.
(1) A body corporate that proposes to be a futures association may apply
to ASIC in writing for approval by the Minister as a futures
association.
(2) Where a body applies under subsection (1), the Minister may by
writing approve the body as a futures association if, and only if, he or she is
satisfied:
(c) that the body’s nature is such that the body may properly
exercise its functions as a futures association, being the functions
of:
(i) regulating the association’s affairs in the interests of the
public; and
(ii) administering and enforcing the association’s business rules;
and
(d) that the body’s business rules make satisfactory
provision:
(i) for the admission as members of persons licensed, or proposing to
apply to be licensed, under Part 8.3, or of a specified class of such
persons; and
(ii) for the qualifications for membership, including the necessary
standards of training and experience for:
(A) responsible officers of bodies corporate that; and
(B) natural persons who;
are, or propose to be, members; and
(iii) for the manner in which members are to conduct their business of
dealing in futures contracts so as to ensure efficient, honest and fair
practices in relation to such dealing; and
(iiia) for the exclusion of a body corporate from membership where a
responsible officer of the body corporate would be excluded from membership;
and
(iv) for the exclusion of a person from membership where:
(A) if the person is a body corporate—a responsible officer, or an
employee, of the body corporate; or
(B) otherwise—the person or an employee of the person;
is not of good character and high business integrity; and
(v) for the expulsion, suspension or disciplining of a member for conduct
inconsistent with just and equitable principles in the transaction of business
or for a contravention of the body’s business rules or of this Chapter;
and
(vi) for an appropriate mechanism whereby a person whose application for
membership of the body is refused, or whose membership of the body is cancelled
or suspended, in circumstances where the person does not have a right to appeal
to the Court under subsection 1135(1) against the decision to refuse the
application, or to cancel or suspend the membership, as the case may be, may
appeal against the decision; and
(vii) for an appropriate mechanism whereby a person who has been
disciplined by the body otherwise than by way of cancellation or suspension of
the person’s membership of the body may appeal against the decision to
discipline the person; and
(viii) for the inspection and audit of the financial records that this
Chapter requires members to keep; and
(x) prohibiting a member from accepting or executing, otherwise than in
accordance with the business rules, instructions from another person to deal in
futures contracts; and
(xi) prohibiting a member from dealing in futures contracts on behalf of
another person otherwise than in accordance with instructions accepted by the
member from the person; and
(xii) prohibiting a member from dealing in futures contracts, on behalf of
another person, on a futures market of a futures exchange or of a recognised
futures exchange, otherwise than in accordance with the business rules of the
futures exchange or recognised futures exchange, as the case may be;
and
(xiii) prohibiting a member, except as permitted by the business rules,
from executing the instructions of another person to deal in futures contracts
unless the instructions are executed in such a manner that the dealing is
effected on a futures market of a futures exchange or of a recognised futures
exchange or on an exempt futures market; and
(xiv) for the equitable and expeditious settlement of claims and
grievances between members, being claims and grievances relating to the
transaction of business by members in their capacity as members; and
(xv) for appropriate mechanisms for the conciliation and settlement of
disputes between members and their clients, being disputes concerning dealings
in futures contracts by members on behalf of their clients or concerning
transactions between members and their clients in connection with such
dealings;
(e) if the body is expected to be a futures organisation within the
meaning of Part 8.6—that:
(i) there will be enough money in the body’s fidelity fund to make
the payments out of the fund that may reasonably be expected to be necessary for
the purposes of Part 8.6; or
(ii) the body will enter into a contract, in a form approved by the
Minister, with an insurer approved by the Minister, under which the insurer
undertakes to supplement the fund, if a claim is made on the fund, so that the
total amount available to satisfy the claim will be not less than an amount so
approved; and
(f) that the interests of the public will be served by granting the
application.
(1) The Minister may cause to be served on a body corporate a written
notice requiring the body to show cause, at a hearing before a specified person,
why the body’s approval as a futures association should not be suspended
or cancelled on specified grounds.
(2) A notice under subsection (1) must specify, and give reasonable
notice of, the time and place at which the hearing is to occur, but the
specified person may, with the body’s consent, fix a different time, a
different place, or both, for the hearing.
(3) Where a notice is served under subsection (1), the specified
person must, after giving the body an opportunity to be heard at the hearing,
submit to the Minister a report about the hearing and a recommendation about the
matters to which the notice related.
(4) After considering a report and recommendation under
subsection (3), the Minister may:
(a) decide to take no further action in relation to the matter;
or
(b) by writing, suspend for a specified period, or cancel, the
body’s approval as a futures association.
(5) A body corporate is taken not to be a futures association at any time
during a period for which the body’s approval as a futures association is
suspended.
(6) A body corporate’s approval as a futures association must not be
suspended or cancelled except under this section.
ASIC must cause a copy of an instrument executed under subsection
1126(2), 1127(1), 1131(2), 1132(2) or 1133(4) to be published in the
Gazette.
(1) Where a body corporate, being a futures exchange or futures
association:
(a) decides, at a time when a person is a member of no futures
organisation, to refuse an application by the person for membership of the body
corporate; or
(b) decides, at a time when a person is a member of no other futures
organisation, to suspend or cancel the person’s membership of the body
corporate;
the body corporate must, within 14 days after so deciding, give to the
person, and to ASIC, a notice in writing setting out the decision and the
reasons for the decision, and the person may, within the period of 21 days
beginning when the notice is so given or within that period as extended by the
Court, appeal to the Court against the decision by filing a written notice of
appeal.
(2) A person whose membership of a futures organisation is suspended for a
period:
(a) is taken, for the purposes of paragraph (1)(a), to be a member of
that futures organisation throughout that period; and
(b) is taken, for the purposes of paragraph (1)(b), not to be a
member of that futures organisation at any time during that period.
(3) A person must, on the day on which the person files a notice of appeal
with the Court under subsection (1), lodge a copy of the notice.
(4) Where a body corporate decides as mentioned in paragraph (1)(b),
then:
(a) subject to paragraph (c) of this subsection and to
subsection (6), the decision takes effect at the end of the day on which a
notice relating to the decision is given by the body corporate in accordance
with subsection (1); and
(b) if the person to whom the decision relates appeals to the Court under
subsection (1) against the decision—the Court may, at any time before
it determines the appeal, make such order as it thinks fit concerning the
effect, pending determination of the appeal, of the decision, including, without
limiting the generality of the foregoing, an order that is subject to conditions
specified in the order; and
(c) an order made by the Court under paragraph (b) has effect
accordingly.
(5) The Court may, after hearing an appeal under subsection (1),
dismiss the appeal or:
(a) in the case of an appeal against a decision to refuse an application
for membership—decide that the application should be granted, or should be
granted subject to specified conditions; or
(b) in the case of an appeal against a decision to suspend for a period a
person’s membership—decide that the person’s
membership:
(i) should not be suspended; or
(ii) should be suspended for a specified lesser period; or
(c) in the case of an appeal against a decision to cancel a person’s
membership—decide that the person’s membership:
(i) should not be cancelled; or
(ii) should not be cancelled, but should be suspended for a specified
period.
(6) Where, on an appeal against a decision of a body corporate, the Court
decides as mentioned in paragraph (5)(a), (b) or (c), then, as from the day
on which the appeal is decided:
(a) the first-mentioned decision ceases to have effect; and
(b) the decision of the Court has effect, except for the purposes of
subsection (1), as a decision of the body corporate and takes effect
accordingly.
(1) Where an amendment is made by way of rescission or alteration of, or
addition to, the business rules of a futures exchange, of a clearing house for a
futures exchange, or of a futures association, the futures exchange, clearing
house or futures association, as the case may be, must, forthwith after the
making of the amendment, give written notice of the amendment to ASIC.
(2) A notice under subsection (1) must:
(a) set out the text of the amendment to which it relates; and
(b) specify the date on which the amendment was made; and
(c) contain an explanation of the purpose of the amendment.
(3) If a notice required by subsection (1) to be given in relation to
an amendment is not given within 21 days after the making of the amendment, the
amendment ceases to have effect.
(4) Where ASIC receives a notice under this section, ASIC must forthwith
send a copy of the notice to the Minister.
(5) The Minister may, within 28 days after the receipt by ASIC of a notice
under this section, disallow the whole or a specified part of the amendment to
which the notice relates.
(6) Where the Minister disallows under this section the whole or a part of
an amendment of the business rules of a body corporate, ASIC must forthwith give
notice of the disallowance to the body corporate and, upon receipt by the body
corporate of the notice of disallowance, the amendment ceases, to the extent of
the disallowance, to have effect.
(1) A futures exchange, and a clearing house for a futures exchange, must,
to the extent that it is reasonably practicable to do so, take all steps, and do
all things, necessary to ensure an orderly and fair market for dealings in
futures contracts on a futures market of the futures exchange.
(2) A futures exchange may, for the purpose of performing its functions
under subsection (1), give to a person who is not a member of the futures
exchange but in whose name a futures contract entered into on a futures market
of the futures exchange is registered a direction:
(a) to do a particular act or thing; or
(b) to refrain from doing a particular act or thing.
(3) A person must comply with a direction given to the person in
accordance with subsection (2), but a person who contravenes this
subsection is not guilty of an offence.
(1) Subject to subsections (2) and (6), ASIC may, in relation to a
futures market of a futures exchange, give a direction in writing to the futures
exchange:
(a) to close the futures market; or
(b) to suspend dealing on the futures market in a specified class of
futures contracts; or
(c) to limit transactions on the futures market to the closing out of
futures contracts; or
(d) to defer for a specified period the completion date for all futures
contracts, or for a specified class of futures contracts, made on the futures
market; or
(e) to cause a specified futures contract made on the futures market, or
each futures contract included in a specified class of futures contracts so
made, to be:
(i) closed out forthwith as the result of the matching up of the futures
contract with a futures contract of the same kind whose price or value is equal
to a price or value determined by the futures exchange; or
(ii) invoiced back to a specified date at a price or value determined by
the futures exchange; or
(f) to require a futures contract made on the futures market, or each
futures contract included in a specified class of futures contracts so made, to
be discharged by:
(i) the tendering of a merchantable lot of a commodity determined by the
futures exchange, being a commodity of a quality or standard that is:
(A) different from the quality or standard of the commodity specified in
the futures contract; and
(B) determined by the futures exchange; and
(ii) the tendering of a price adjusted by an amount that is:
(A) appropriate having regard to the quality or standard of the commodity
referred to in subparagraph (i); and
(B) determined by the futures exchange; or
(g) to require a member of the futures exchange to act in a specified
manner in relation to dealings in futures contracts on the futures market, or in
relation to a specified class of such dealings.
(2) ASIC must not give a direction under subsection (1) in relation
to a futures market of a futures exchange unless:
(a) it has determined that a direction should be so given because it is of
the opinion that:
(i) subsection 1137(1) has not been complied with in relation to that
futures market; and
(ii) it is necessary to protect the interests of persons on behalf of whom
futures contracts are or may be dealt with on that futures market; and
(iii) it would be in the public interest for a direction to be so given;
and
(b) it has given to the futures exchange a notice in writing stating that
it has formed that opinion and specifying:
(i) its reasons for forming that opinion; and
(ii) the direction that it considers should be so given; and
(iii) a time, or a date and time, before which it will not so give the
direction; and
(c) it has given a copy of the notice to each clearing house for that
futures market; and
(d) the direction is so given after the time, or date and time, as the
case may be, specified pursuant to subparagraph (b)(iii).
(3) ASIC must, before determining in relation to a futures market of a
futures exchange as mentioned in paragraph (2)(a), consult the futures
exchange and each clearing house for that futures market.
(4) A failure by ASIC to comply with subsection (3) does not affect
the validity of:
(a) a determination under paragraph (2)(a); or
(b) a direction given under subsection (1) pursuant to such a
determination.
(5) ASIC must, as soon as practicable after giving a notice under
paragraph (2)(b) in relation to a futures market of a futures
exchange:
(a) give to the Minister a copy of the notice and a written report setting
out the reasons for the giving of the notice; and
(b) give a copy of the report to the futures exchange; and
(c) give a copy of the report to each clearing house for that futures
market.
(6) ASIC must not give a direction under subsection (1) in relation
to a futures market of a futures exchange if:
(a) the Minister has directed ASIC not to give the direction; or
(b) the futures exchange has acted as if the direction had been
given.
(7) ASIC must, as soon as practicable after giving a direction under
subsection (1) in relation to a futures market of a futures
exchange:
(a) give to the Minister a copy of the direction; and
(b) give to each clearing house for that futures market:
(i) a copy of the direction; and
(ii) a direction in writing prohibiting the clearing house from acting in
a manner inconsistent with, and requiring the clearing house to do all that it
is reasonably capable of doing to give effect to, the direction under
subsection (1) while the last-mentioned direction remains in
force.
(8) The Minister may determine in writing the period throughout which a
particular direction under subsection (1) is to remain in force.
(9) A direction given under subsection (1) remains in
force:
(a) in a case where a determination under subsection (8) is in
force—throughout the period specified in the determination; or
(b) in any other case—unless sooner revoked, until the end of the
period of 21 days, or such shorter period (if any) as is specified in the
direction, commencing when the direction is given.
(10) A futures exchange must not, while a direction given under
subsection (1) in relation to a futures market of the futures exchange
remains in force, fail to comply with the direction.
(11) A clearing house for a futures exchange must not fail to comply with
a direction given to the clearing house under
subparagraph (7)(b)(ii).
(12) A document may be given to a person under this section by sending to
the person, by telegraph, telex, facsimile service or other similar means of
communication, a message to the effect of the document.
(1) A futures exchange, a clearing house for a futures exchange, and a
futures association, must each provide such assistance to ASIC, or to a person
acting on behalf of, or with the authority of, ASIC, as ASIC reasonably requires
for the performance of its functions under this Chapter.
(2) Where:
(a) a body corporate, being a futures exchange, a clearing house for a
futures exchange, or a futures association, decides to reprimand, fine, suspend,
expel or otherwise take disciplinary action against, a member of the body
corporate; and
(b) subsection 1135(1) does not require the body corporate to give to ASIC
a notice relating to the decision;
the body corporate must, within 14 days after so deciding, give to ASIC a
notice in writing setting out particulars of the name of the member, the
decision, the reasons for the decision and, in the case of a decision to fine a
member, the amount of the fine.
(2A) A futures exchange, a clearing house for a futures exchange or a
futures association that believes that a person has committed, is committing or
is about to commit a serious contravention of its business rules, or this Act,
must, as soon as practicable, lodge a statement setting out:
(a) particulars of the contravention that it believes the person has
committed, is committing or is about to commit; and
(b) its reasons for that belief.
(3) Where a clearing house for a futures exchange:
(a) refuses to register a dealing in a futures contract; or
(b) closes out a futures contract because of a failure to meet a call for
deposit or margin;
it must forthwith give ASIC particulars of its action.
(4) A person authorised by ASIC is entitled at all reasonable times to
full and free access for any of the purposes of this Act to the trading floor of
a futures market of a futures exchange.
(5) A person who refuses or fails, without lawful excuse, to allow a
person authorised by ASIC access in accordance with subsection (4) to the
trading floor of a futures market of a futures exchange contravenes this
subsection.
Where a person who is under an obligation to comply with, observe,
enforce or give effect to the business rules of a futures exchange, of a
clearing house for a futures exchange, or of a futures association, fails to
comply with, observe, enforce or give effect to those rules, the Court may, on
the application of the futures exchange, clearing house or futures association,
as the case may be, of ASIC, or of 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
compliance with, observance or enforcement of, or giving effect to, those
rules.
(1) Despite any law of a State or Territory in this jurisdiction about
gaming or wagering:
(a) a person may enter into a futures contract:
(i) on a futures market of a futures exchange or of a recognised futures
exchange; or
(ii) on an exempt futures market; or
(iii) as permitted by the business rules of a futures association, of a
futures exchange or of a recognised futures exchange; and
(b) the contract is valid and enforceable.
(2) Despite any law of a State or Territory in this jurisdiction about
gaming or wagering:
(a) a person may enter into a Chapter 8 agreement of a kind
prescribed for the purposes of paragraph 72A(1)(b); and
(b) the agreement is valid and enforceable.
(1) In this section:
disciplinary proceeding, in relation to a futures
organisation, means:
(a) a proceeding under the business rules of the futures organisation that
may result in the disciplining of a member of the futures organisation;
or
(b) an appeal under the business rules of the futures organisation from a
proceeding of a kind referred to in paragraph (a).
disciplining, in relation to a member of a futures
organisation, includes expulsion from, or suspension of, membership of the
futures organisation.
member, in relation to a futures organisation, includes a
person who is under an obligation to comply with or enforce the business rules
of the futures organisation.
(2) A futures organisation, or a member, officer or employee of a futures
organisation, has qualified privilege in respect of a statement made by a
person, orally or in writing, in the course of, or otherwise for the purposes of
or in connection with, a disciplinary proceeding of the futures
organisation.
(3) A person has qualified privilege in respect of the publication
of:
(a) a statement made by a person, orally or in writing, in the course of,
or otherwise for the purposes of or in connection with; or
(b) a document prepared, given or produced by a person, in the course of,
or otherwise for the purposes of or in connection with;
a disciplinary proceeding of a futures organisation.
A person must not:
(a) deal in a futures contract on another person’s behalf;
or
(b) hold out that the person carries on a futures broking
business;
unless the first-mentioned person holds a futures brokers licence or is an
exempt broker.
A person must not:
(a) carry on a futures advice business; or
(b) hold out that the person is a futures adviser;
unless the person is a licensee or an exempt futures adviser.
(1) A person may apply to ASIC, in the prescribed form and manner, for a
futures brokers licence or a futures advisers licence.
(2) ASIC may require an applicant for a licence to give ASIC such further
information in relation to the application as ASIC thinks necessary.
(1) This section applies where a natural person applies for a
licence.
(2) ASIC must grant the licence if:
(a) the application was made in accordance with section 1144;
and
(b) the person is not an insolvent under administration; and
(c) if the application is for a futures brokers licence—the person
is a member of a futures organisation; and
(d) ASIC 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; and
(e) ASIC has no reason to believe that the person is not of good fame and
character; and
(f) ASIC has no reason to believe that the person will not perform those
duties efficiently, honestly and fairly.
(3) Otherwise, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(e) or (f), ASIC must have regard to any conviction of the
person, during the 10 years ending on the day of the application, of serious
fraud.
(1) This section applies where a body corporate applies for a
licence.
(2) ASIC must grant the licence if:
(a) the application was made in accordance with section 1144;
and
(c) the applicant is not an externally-administered body corporate;
and
(d) if the application is for a futures brokers licence—the
applicant is a member of a futures organisation; and
(e) ASIC 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
(f) ASIC 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, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(f), ASIC must have regard, in relation to each responsible
officer of the applicant, to:
(a) whether or not the officer is an insolvent under administration;
and
(b) any conviction of the officer, during the 10 years ending on the day
of the application, of serious fraud; and
(c) any reason ASIC has to believe that the officer is not of good fame
and character; and
(d) any reason ASIC 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.
(1) Sections 1144A and 1145 apply subject to sections 1199A,
1200 and 1202 and the regulations.
(2) Nothing in subsection 1144A(4) or 1145(4) limits the matters to which
ASIC 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.
A licence is subject to:
(a) such conditions and restrictions as are prescribed; and
(b) subject to section 1200, such conditions and restrictions as ASIC
imposes when granting the licence or while it is in force.
(1) A futures brokers licence is subject to:
(a) a condition that the licensee be, throughout the currency of the
licence, a member of a futures organisation; and
(b) a condition that the licence is suspended throughout a period
throughout which the licensee:
(i) is a member of no futures organisation; and
(ii) would, but for the suspension of the licensee’s membership of a
futures organisation, be a member of the last-mentioned futures
organisation.
(2) A person whose membership of a futures organisation is suspended for a
period:
(a) is, for the purposes of paragraph (1)(a), a member of that
futures organisation throughout that period; and
(b) is, for the purposes of paragraph (1)(b), a member of that
futures organisation at no time during that period.
(1) Without limiting the generality of section 1147, one or more of
the following may be imposed under that section on a futures brokers
licence:
(a) a condition or restriction about limiting the liability that the
licensee may incur in connection with a business of dealing in futures
contracts;
(b) a condition or restriction about incurring, or a condition about
disclosing, liabilities of the licensee that arise otherwise than in connection
with such a business;
(c) a condition or restriction about the licensee’s financial
position, whether or not in relation to such a business;
(d) without limiting the generality of paragraph (c), a condition
that the licensee’s assets include, or not include, specified
assets;
(e) without limiting the generality of paragraph (c), a condition
that the sum of the values of specified assets included in the licensee’s
assets be not less than, or not greater than, an amount ascertained in
accordance with the condition.
(2) A condition imposed by virtue of paragraph (1)(e) may provide for
the values of assets to be ascertained, for the purposes of applying the
condition, in a manner specified in, or determined in accordance with, the
condition.
(3) Without limiting the generality of paragraph (1)(e), a condition
imposed by virtue of that paragraph may provide for the amount referred to in
that paragraph to be a specified percentage of the sum of:
(a) the values of all the licensee’s assets; or
(b) the values of specified assets included in the licensee’s
assets; or
(c) the amounts of all the licensee’s liabilities; or
(d) the amounts of specified liabilities included in the licensee’s
liabilities.
Without limiting the generality of section 1147, one or more of the
following may be imposed under that section on a licence:
(a) a condition about what the licensee is to do to, by way of supervision
or otherwise, in order to prevent the licensee’s representatives from
contravening:
(i) a futures law; or
(ii) other conditions of the licence;
(b) a condition about what the licensee is to do to ensure that each
representative of the licensee has adequate qualifications and experience having
regard to what the representative will do on the licensee’s behalf in
connection with a futures broking business or futures advice business carried on
by the licensee.
Subject to section 1200, ASIC may at any time revoke or vary a
condition of a licence unless it was imposed by the regulations.
(1) As soon as practicable after imposing a condition on, or revoking or
varying a condition of, a futures brokers licence, ASIC must inform in
writing:
(a) each futures organisation of which the licensee is a member;
and
(b) each corporation that is a clearing house for a futures exchange of
which the licensee is a member.
(2) A contravention of subsection (1) does not affect the validity of
an act done by ASIC.
(1) Within one business day after the happening of an event constituting a
contravention of a condition of a licence held by a corporation, the licensee
must give to:
(a) ASIC; and
(b) each futures organisation of which the licensee is a member;
a written notice setting out particulars of the event.
(2) It is a defence to a prosecution for failing to give a particular
notice to a person as required by this section if it is proved that:
(a) when the requirement arose, the defendant was unaware of the event
that gave rise to the requirement; and
(b) the defendant:
(i) did not become aware of the event before the date of the information;
or
(ii) did become so aware before that date but gave the notice to that
person as soon as reasonably practicable after becoming so aware.
(1) ASIC may, by writing given to the holder of a futures brokers licence,
direct the holder to give ASIC specified information about, or a specified
statement relating to, a business of dealing in futures contracts that the
holder carries on or has carried on.
(2) A direction under subsection (1) to give a specified statement
may also direct the holder to cause the statement to be audited by a registered
company auditor before it is given to ASIC.
(3) A person must comply with a direction under this section:
(a) if the direction specifies a reasonable period for
compliance—within that period; or
(b) in any other case—within a reasonable period;
or within that period as extended by ASIC by writing given to the
person.
(1) ASIC must keep a Register of Futures Licensees for the purposes of
this Part.
(2) ASIC must include in the Register, 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.
(3) ASIC must enter in the Register, in relation to each
licence:
(a) the name of the licensee; and
(b) if the licensee is a body corporate—the name of each director,
and of each secretary, of the licensee; and
(c) the day on which the licence was granted; and
(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; and
(ii) the addresses of the other places (if any) at which the business is
carried on; and
(iii) if the business is carried on under a name or style other than the
name of the licensee—that name or style; and
(e) in the case of a futures brokers licence—the name, and the
address of the principal place of business, of each futures organisation of
which the licensee is a member; and
(f) particulars of any suspension of the licence; and
(g) such other matters (if any) as are prescribed.
(4) Where a person ceases to hold a particular licence, ASIC must remove
from the Register the documents included in it, and the particulars entered in
it, in relation to that licence.
(5) A person may inspect, and may make copies of, or take extracts from,
the Register.
Within 21 days after:
(a) the holder of a futures brokers licence ceases to carry on the
business to which the licence relates; or
(b) the holder of a futures advisers licence ceases to act as, or to hold
out that the holder is, a futures adviser; or
(c) there is a change in a matter particulars of which are required by
virtue of any of paragraphs 1155(3)(a) to (e), inclusive, to be entered, in
relation to a licence, in the Register of Futures Licensees;
the holder of the licence must give ASIC written particulars, in the
prescribed form, of that fact, or of that change, as the case may be.
(1) A person who is or has been a licensee must 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 must 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 must also contain such information as is
prescribed.
A person required by section 1157 to lodge a statement must lodge
the statement:
(a) if the licence is a futures brokers licence—within the period
within which the person must lodge with ASIC a profit and loss statement and
balance sheet referred to in section 1218; or
(b) if the licence is a futures advisers licence—within the period
of 1 month immediately before the anniversary of the day on which the licence
was granted;
or within that period as extended by ASIC by writing given to the
person.
In this Division:
excluded client means a person who is:
(a) a futures broker; or
(b) a futures adviser; or
(c) one of 2 or more persons who together constitute a futures broker or
futures adviser.
Where a person (in this section and Subdivision B called the
non-licensee) and another person (in this section and Subdivision
B called the client), not being an excluded client, enter into an
agreement relating to a dealing or proposed dealing in a futures contract by the
non-licensee on the client’s behalf, being a dealing or proposed dealing
involving a contravention by the non-licensee of section 1142, Subdivision
B applies, whether or not anyone else is a party to the agreement.
Where, during a period when a person (in this section and Subdivision B
called the non-licensee), in contravention of section 1143,
carries on a futures advice business or holds out that the person is a futures
adviser, the non-licensee and a client (other than an excluded client) of the
non-licensee enter into an agreement that relates to advising the client about
futures contracts or to giving the client futures reports, Subdivision B
applies, whether or not anyone else is a party to the agreement.
(1) Subject to this section, the client may, whether before or after
completion of the agreement, give to the non-licensee a written notice stating
that the client wishes to rescind the agreement.
(2) The client may only give a notice under this section within a
reasonable period after becoming aware of the facts entitling the client to give
the notice.
(3) The client is not entitled to give a notice under this section if the
client engages in conduct by engaging in which the client would, if the
entitlement so to give a notice were a right to rescind the agreement for
misrepresentation by the non-licensee, be taken to have affirmed the
agreement.
(4) The client is not entitled to give a notice under this section if,
within a reasonable period before the agreement was entered into, the
non-licensee informed the client (whether or not in writing) that:
(a) the non-licensee did not hold a futures brokers licence; or
(b) the non-licensee did not hold a futures brokers licence and did not
hold a futures advisers licence;
as the case requires.
(5) If, at a time when a futures brokers licence or futures advisers
licence held by the non-licensee was suspended, the non-licensee informed the
client that the licence was suspended, the non-licensee is taken for the
purposes of subsection (4) to have informed the client at that time that
the non-licensee did not hold a futures brokers licence or futures advisers
licence, as the case may be.
(6) None of subsections (2), (3) and (4) limits the generality of
either of the others.
(7) Subject to this section, the client may give a notice under this
section whether or not:
(a) the notice will result under section 1165 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 1166.
A notice given under section 1164 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.
(1) If the client gives a notice under section 1164 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 1165, 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 1165 and the application were for orders under
section 1166.
(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
is taken for the purposes of section 1166 to have been rescinded under
section 1165.
(6) An order under subsection (4) does not affect the application of
section 1168 or 1170 in relation to the agreement as originally made or as
varied by the order.
(1) Subject to subsection (2), on rescission of the agreement under
section 1165, the Court may, on the application of the client or the
non-licensee, make such orders as it would have power to make if the client had
duly rescinded the agreement for misrepresentation by the
non-licensee.
(2) The Court is not empowered to make a particular order under
subsection (1) if the order would prejudice a right, or an estate in
property, acquired by a person (other than the non-licensee) in good faith, for
valuable consideration and without notice of the facts entitling the client to
give the notice.
(1) This section:
(a) applies while both of the following are the case:
(i) the client is entitled to give a notice under
section 1164;
(ii) a notice so given will result under section 1165 in rescission
of the agreement; and
(b) applies after the agreement is rescinded under
section 1165;
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.
(1) Without limiting the generality of section 1167, this
section:
(a) applies while the client is entitled to give a notice under
section 1164; and
(b) applies after the client so gives a notice, even if the notice does
not result under section 1165 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.
For the purposes of determining, in a proceeding in a court, whether or
not the non-licensee is, or was at a particular time, entitled as mentioned in
subsection 1167(2) or 1168(2), it is presumed, unless the contrary is proved,
that section 1167 or 1168, as the case may be, applies, or applied at that
time, as the case may be.
(1) Without limiting the generality of section 1166, if the client
gives a notice under section 1164, the client may, even if the notice does
not result under section 1165 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) ASIC 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.
The client’s rights and remedies under this Division are additional
to, and do not prejudice, any other right or remedy of the client.
A natural person must not do an act as a representative of a futures
broker (other than an exempt broker) unless:
(a) the broker holds a futures brokers licence; and
(b) the person holds a proper authority from the broker.
A natural person must not do an act as a representative of a futures
adviser (other than an exempt futures adviser) unless the futures
adviser:
(a) is also a futures broker and holds a futures brokers licence;
or
(b) holds a futures advisers licence;
and the person holds a proper authority from the futures adviser.
It is a defence to a prosecution for a contravention of section 1172
or 1173 constituted by an act done by a person as a representative of another
person if it is proved that:
(a) but for the revocation or suspension of a licence held by the other
person, the act would not have been such a contravention; and
(b) when he or she did the act, the first-mentioned person:
(i) believed in good faith that the other person held the licence;
and
(ii) was unaware of the revocation or suspension; 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
suspension.
A body corporate must not do an act as a representative of a
person.
(1) A licensee must establish a register of the persons who hold proper
authorities from the licensee and must keep it in accordance with this
section.
(2) The register must be in writing or in such other form as ASIC
approves.
(3) The register must contain, in relation to each person (if any) who
holds a proper authority from the licensee:
(a) a copy of the proper authority; and
(b) the person’s name; and
(c) the person’s current residential address; and
(d) unless the person’s current business address is the same as the
licensee’s—the person’s current business address;
and
(e) such other information (if any) as is prescribed.
(4) A copy of a proper authority of a person from the licensee that
subsection (3) requires the register to contain must be included in the
register within 2 business days after the person begins to hold that proper
authority.
(5) Information that subsection (3) requires the register to contain
in relation to a person must 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 must:
(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 is taken the purposes of subsections (3) and
(5) not to be contained or entered in the register.
(8) Where a licensee whom subsection (1) requires to establish a
register already keeps one under this section, the licensee need not establish a
new register but must keep the existing one in accordance with this
section.
(1) This section has effect where a licensee keeps a register under
section 1176.
(2) Within 14 days after establishing the register, the licensee must
lodge written notice of where the register is kept.
(3) As soon as practicable after changing the place where the register is
kept, the licensee must lodge written notice of the new place where the register
is kept.
(4) Within 2 business days after the day on which a person begins to hold
a particular proper authority from the licensee, the licensee must, 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 1176(5) requires the
licensee to enter in the register information that the register is required by
virtue of paragraph 1176(3)(b), (c), (d) or (e) to contain, the licensee must
lodge a written notice setting out the information and stating that the
information has been, or is to be, entered in the register.
(6) Within 2 business days after a person ceases to hold a proper
authority from the licensee, the licensee must, 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.
(1) A licensee must ensure that a register kept by it under
section 1176 is open for inspection without charge.
(2) A person may by writing request a licensee to give the person a copy
of the whole, or of a specified part, of a register kept by the licensee under
section 1176.
(3) A licensee must comply with a request under subsection (2) within
2 business days after:
(a) if the licensee requires the person to pay for the copy an amount of
not more than the prescribed amount—receiving the amount from the person;
or
(b) otherwise—receiving the request.
(1) Where ASIC has reason to believe that a person:
(a) holds a proper authority from a licensee; or
(b) has done an act as a representative of another person;
then, whether or not ASIC knows who the licensee or other person is, it may
require the first-mentioned person to produce:
(c) any proper authority from a licensee; or
(d) any invalid futures authority from a person;
that the first-mentioned person holds.
(2) A person must not, without reasonable excuse, refuse or fail to comply
with a requirement under this section.
(1) Where ASIC believes on reasonable grounds that:
(a) a person (in this section called the holder) holds, or
will hold, a proper authority from a licensee; and
(b) having regard to that fact, ASIC should give to the licensee
particular information that ASIC has about the person; and
(c) the information is true;
ASIC may give the information to the licensee.
(2) Where ASIC 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 must not give to
another person, make use of, or make a record of, information given by ASIC
under subsection (1).
(4A) Subsection 8(3) does not apply in relation to a reference in
subsection (2), (3) or (4) of this section to a provision of this
section.
(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
must 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; or
(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; or
(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 futures broking business or futures
advice business carried on by the first-mentioned person.
(8) In addition, and without prejudice, to the effect it has of its own
force, subsection (6) has by force of this subsection the effect it would
have if:
(a) the reference in it to information being given in accordance with this
section were a reference to information being given in accordance with
section 1181; and
(b) a reference in it to a court were a reference to a court of an
external Territory or of a country outside Australia and the external
Territories; and
(c) paragraphs (6)(d) and (e) were omitted.
(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 futures 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 futures authority to the other
person within a specified period of not less than 2 business days.
(3) A person must not, without reasonable excuse, refuse or fail to comply
with a requirement made of the person in accordance with subsection (1) or
(2).
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 ASIC), 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.
(1) This section applies for the purposes of a proceeding in a court
where:
(a) in this jurisdiction or elsewhere, a person (in this section called
the representative) engages in particular conduct while the person
is a representative of 2 or more persons (in this section called the
indemnifying principals); and
(b) it is proved for the purposes of the proceeding that the
representative engaged in the conduct as a representative of some person (in
this section called the unknown principal) but it is not proved
for those purposes who the unknown principal is.
(2) If only one of the indemnifying principals is a party to the
proceeding, he, she or it is liable in respect of that conduct as if he, she or
it were the unknown principal.
(3) If 2 or more of the indemnifying principals are parties to the
proceeding, each of those parties is liable in respect of that conduct as if he,
she or it were the unknown principal.
(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, in this jurisdiction or elsewhere:
(i) engages in particular conduct; or
(ii) proposes, or represents that the representative proposes, to engage
in particular conduct; and
(b) another person (in this section called the client) does,
or omits to do, a particular act, in this jurisdiction or elsewhere, because the
client believes at a particular time in good faith that the representative
engaged in, or proposes to engage in, as the case may be, that
conduct:
(i) on behalf of some person (in this section called the assumed
principal) whether or not identified, or identifiable, at that time by
the client; and
(ii) in connection with a futures broking business or futures advice
business carried on by the assumed principal; and
(c) it is reasonable to expect that a person in the client’s
circumstances would so believe and would do, or omit to do, as the case may be,
that act because of that belief;
whether or not that conduct is or would be within the scope of the
representative’s employment by, or authority from, any person.
(2) If:
(a) subparagraph (1)(a)(i) applies; or
(b) subparagraph (1)(a)(ii) applies and the representative engages in
that conduct;
then, for the purposes of a proceeding in a court:
(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).
(3A) Subsection (3) does not apply unless:
(a) the conduct was engaged in, the proposed conduct would have been
engaged in, or the representation was made, in this jurisdiction; or
(b) the act referred to in paragraph (1)(b) was done, or would have
been done, as the case may be, in this jurisdiction; or
(c) some or all of the loss or damage was suffered in this
jurisdiction.
(4) If:
(a) there are 2 or more indemnifying principals; and
(b) 2 or more of them are parties (in this subsection called the
indemnifying parties) to a proceeding in a court; and
(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.
(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, in this jurisdiction or elsewhere, 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
is 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 1185 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 is 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.
(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 1185 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; or
(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) A person must 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).
(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 1183, 1184 or 1185:
(a) affects a liability arising otherwise than by virtue of this Division;
or
(b) notwithstanding paragraph (a) of this subsection, entitles a
person to be compensated twice in respect of the same loss or damage;
or
(c) makes a person guilty of an offence.
ASIC may, by written order, revoke a licence held by a natural person if
the person:
(a) becomes an insolvent under administration; or
(b) is convicted of serious fraud; or
(c) becomes incapable, through mental or physical incapacity, of managing
his or her affairs; or
(d) asks ASIC to revoke the licence.
ASIC may, by written order, revoke a licence held by a body corporate
if:
(a) the body ceases to carry on business; or
(b) the body becomes an externally-administered body corporate;
or
(c) the body asks ASIC 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.
(1) Subject to section 1200, ASIC 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; or
(b) there was an omission of material matter from the application for the
licence; or
(c) the licensee contravenes a futures law; or
(d) the licensee contravenes a condition of the licence; or
(ea) the licensee is a natural person and ASIC has reason to believe that
he or she is not of good fame and character; or
(e) the licensee is a body corporate and ASIC is satisfied that the
educational qualifications or experience of a person who:
(i) is an officer of the licensee; and
(ii) was not an officer of the licensee 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;
or
(f) the licensee is a body corporate and ASIC is satisfied that:
(i) an officer of the licensee 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 ASIC 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; or
(g) the licensee is a body corporate and:
(i) a licence held by a director, secretary or executive officer of the
body is suspended or revoked; or
(ii) an order is made under section 1194 against such a director,
secretary or executive officer; or
(h) ASIC has reason to believe that the licensee has not performed
efficiently, honestly and fairly the duties of a holder of a futures brokers
licence or a futures advisers licence, as the case requires; or
(j) ASIC 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)(ea) or (j) in relation to a licensee, ASIC is not precluded
from having regard to a matter that arose before the time when the licence was
granted unless ASIC was aware of the matter at that time.
(1) Subject to section 1200, where:
(a) section 1189A or 1190 empowers ASIC to revoke a licence otherwise
than because the licensee has asked for the revocation; or
(b) ASIC is empowered by virtue of paragraph 1191(1)(c), (d), (e), (f),
(g), (h) or (j) to revoke a licence;
ASIC 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 1142
or 1143 would prohibit the licensee from doing if the licensee did not hold the
licence.
(2) ASIC may at any time, by written order, vary or revoke an order in
force under this section.
(3) For the purposes of sections 1142, 1143, 1172 and 1173 a licensee
is taken not to hold the licence at any time during a period for which the
licence is suspended.
(4) Where an order in force under this section prohibits the licensee as
mentioned in paragraph (1)(d):
(a) the licensee must 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 1172 and 1173 apply,
or apply during the period specified in the order, as the case requires, as if
the licensee did not hold the licence.
Subject to section 1200, where ASIC:
(a) revokes under section 1189A; or
(b) revokes because of paragraph 1191(1)(a), (b), (c), (d), (h) or (j);
or
(c) revokes because of paragraph 1191(1)(ea); or
(d) suspends because of paragraph 1192(1)(a); or
(e) suspends because of paragraph 1192(1)(b);
a licence held by a natural person, it may also make a banning order
against the person.
Subject to section 1200, ASIC may make a banning order against a
natural person (other than a licensee) if:
(a) he or she becomes an insolvent under administration; or
(b) he or she is convicted of serious fraud; or
(c) he or she becomes incapable, through mental or physical incapacity, of
managing his or her affairs; or
(d) he or she contravenes a futures law; or
(e) ASIC has reason to believe that he or she is not of good fame and
character; or
(f) ASIC has reason to believe that he or she has not performed
efficiently, honestly and fairly the duties of:
(i) a representative of a futures broker; or
(ii) a representative of a futures adviser; or
(g) ASIC has reason to believe that he or she will not perform
efficiently, honestly and fairly the duties of:
(i) a representative of a futures broker; or
(ii) a representative of a futures adviser.
(1) Where this Division empowers ASIC to make a banning order against a
person, ASIC may, by written order, prohibit the person:
(a) in any case—permanently; or
(b) except where ASIC is empowered by virtue of paragraph 1193(e) to make
the order—for a specified period;
from doing an act as:
(c) a representative of a futures broker; or
(d) a representative of a futures adviser; or
(e) a representative of a futures broker or a futures adviser;
whichever the order specifies.
(2) ASIC must not vary or revoke a banning order except under
section 1195, 1196 or 1197.
(1) An order made against a person under subsection 1194(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 1200, ASIC 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); or
(b) by varying such a provision in relation to conditions, circumstances
or acts specified in the provision; or
(c) by omitting such a provision and substituting another such provision;
or
(d) by omitting such a provision.
(1) Subject to sections 1197 and 1200, this section has effect where
a person applies to ASIC to vary or revoke a banning order relating to the
person.
(2) If:
(a) the person is not an insolvent under administration; and
(b) ASIC has no reason to believe that the person is not of good fame and
character; and
(c) ASIC has no reason to believe that the person will not perform
efficiently, honestly and fairly the duties of:
(i) a representative of a futures broker; or
(ii) a representative of a futures adviser;
ASIC must, by written order:
(d) if only one of subparagraphs (c)(i) and (ii) applies—vary
the banning order so that it no longer prohibits the person from doing an act as
a representative of a futures broker or of a futures adviser, as the case may
be; or
(e) in any other case—revoke the banning order.
(3) Otherwise, ASIC must refuse the application.
(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2)(b) or (c), ASIC must 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 ASIC 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.
Where:
(a) section 1196 requires ASIC to vary a banning order so that it no
longer has a particular operation; and
(b) the order has no other operation;
ASIC must, by written order, instead revoke the banning order.
(1) An order by ASIC 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 ASIC
under this Division takes effect, ASIC must publish in the Gazette a
notice that sets out a copy of:
(a) if the order is made under section 1189A, 1190, 1191, 1192 or
1194 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; and
(b) the banning order as so in force includes a provision that permits a
person as mentioned in subsection 1195(1); and
(c) in ASIC’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.
A person must not contravene a banning order relating to the
person.
ASIC must not grant a futures brokers licence or a futures advisers
licence to a person if a banning order prohibits the person (except as permitted
by the order) from doing an act as a representative of a futures broker, or of a
futures adviser, as the case may be.
(1) ASIC must not:
(a) refuse an application for a licence on the ground, or grounds
including the ground, that paragraph 1144A(2)(d), (e) or (f) or 1145(2)(e) or
(f) does not apply in relation to the applicant; or
(b) impose conditions on a licence; or
(c) vary the conditions of a licence; or
(d) revoke or suspend a licence otherwise than by virtue of
section 1189A or 1190 or paragraph 1192(1)(a); or
(e) make, otherwise than by virtue of paragraph 1192A(a) or (d) or
1193(a), (b) or (c), an order under section 1194 against a person;
or
(f) make under subsection 1195(2) an order varying a banning order against
a person; or
(g) refuse an application by a person under section 1196;
unless ASIC complies with subsection (2) of this section.
(2) ASIC must give the applicant, licensee or person, as the case may be,
an opportunity:
(a) to appear at a hearing before ASIC that takes place in private;
and
(b) to make submissions and give evidence to ASIC in relation to the
matter.
(1) Where ASIC:
(a) revokes under section 1189A, 1190 or 1191 a licence held by a
person; or
(b) makes under section 1194 against a person an order that is to
operate otherwise than only for a specified period;
ASIC may apply to the Court for an order or orders under this section in
relation to the person.
(2) On an application under subsection (1), the Court may make one or
more of the following:
(a) an order disqualifying the person, permanently or for a specified
period, from holding:
(i) a futures brokers licence;
(ii) a futures advisers licence; or
(iii) a futures brokers licence or a futures 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 futures broker;
(ii) a representative of a futures adviser; or
(iii) a representative of a futures broker or of a futures
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
subsection (2).
(1) ASIC must not grant a futures brokers licence or a futures advisers
licence to a person whom an order in force under section 1201 disqualifies
from holding a futures brokers licence or a futures advisers licence, as the
case may be.
(2) A person must not contravene an order that:
(a) is of a kind referred to in paragraph 1201 (2) (b); and
(b) is in force under section 1201; and
(c) relates to the person.
(1) A person who is the holder of a licence must not represent or imply,
or knowingly 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 ASIC.
(2) A statement that a person is the holder of a licence is not a
contravention of this section.
(1) In this section:
broadcast, in relation to a statement, means broadcast the
statement by wireless transmission or television or cause it to be so
broadcast.
publish, in relation to a statement, means:
(a) insert the statement in a newspaper or periodical or cause it to be so
inserted; or
(b) publicly exhibit the statement or cause it to be publicly exhibited;
or
(c) include the statement, or cause it to be included, in a document that,
whether or not in response to a request, is sent or delivered to a person, or
thrown or left upon premises in the occupation of a person.
(2) Where ASIC considers that, having regard to conduct that a person has
engaged in, is engaging in, or proposes to engage in, it is in the public
interest to do so, it may, by written order given to the person, prohibit the
person from publishing or broadcasting statements about:
(a) futures contracts; or
(b) businesses carried on, or proposed to be carried on, by persons and
involving dealing in futures contracts on behalf of other persons; or
(c) futures advice businesses or proposed futures advice
businesses;
unless the form and content of the statements have first been approved by
ASIC.
(3) An order under subsection (2) must not be made unless ASIC has
first given the person in relation to whom it proposes to make the order an
opportunity to appear at a hearing before ASIC (being a hearing that takes place
in private) and make submissions and give evidence to ASIC in relation to the
matter.
(4) A person the subject of an order under subsection (2) must comply
with the order.
(5) For the purposes of this section, where a statement is published or
broadcast and there is also published or broadcast in relation to the
statement:
(a) the name or address of a person; or
(b) the telephone or telex number of a person; or
(c) the post office or other delivery box number of a person;
it is presumed, unless the contrary is proved, that the statement was
published or broadcast by that person.
Neither of sections 1206 and 1207 applies in relation to an exempt
broker, except in so far as the exempt broker carries on a futures broking
business as a personal representative of a dead futures broker.
(1) A futures broker must, in respect of a transaction, being the
acquisition or disposal of a futures contract, that is entered into by the
broker on behalf of another person, give as soon as practicable:
(a) in a case where the transaction is not an operation by the broker on a
discretionary account—to that other person; or
(b) in a case where the transaction is an operation by the broker on a
discretionary account—to the person, or to each person, as the case
requires, who gave instructions to the broker authorising the broker to operate
on the discretionary account, other than a person who agrees in the prescribed
manner to waive the operation of this paragraph;
a contract note that complies with subsection (3), (4) or (5), as the
case requires.
(2) Subsection (1) does not require a futures broker to give a
contract note to a person in respect of a transaction if the person was at the
time of the transaction the holder of a futures brokers licence.
(3) A contract note given by a futures broker under subsection (1) in
respect of a transaction, being the acquisition or disposal of a futures
contract (other than a futures option or an eligible exchange-traded option),
must include:
(a) the name or style under which the broker carries on business as a
futures broker and the address of the principal place at which the broker so
carries on business; and
(b) the name of the person to whom the broker gives the contract note;
and
(c) the day on which the transaction took place; and
(d) a description of the futures contract sufficient to identify the
nature of the transaction, including:
(i) in a case where the futures contract is a commodity agreement—a
description of the commodity and a statement of the contract price;
and
(ii) in a case where the futures contract is an adjustment
agreement:
(A) a description of the class of adjustment agreements in which the
futures contract is included; and
(B) a statement of the contract price; and
(C) if the transaction is the completion of the futures contract—the
value or worth (as determined in accordance with the futures contract) of the
futures contract at the time of that completion; and
(iii) in a case where the transaction is a liquidating trade—details
of the liquidating trade and of the futures contract that is intended to be
closed out following the entering into of the liquidating trade; and
(e) the deposit paid or payable in respect of the transaction;
and
(f) the month and year for the performance or settlement of the contract;
and
(g) in a case where the transaction took place on a futures market of a
futures exchange or of a recognised futures exchange, or on an exempt futures
market—a name or abbreviation by which the futures exchange, recognised
futures exchange or exempt futures market, as the case may be, is generally
known; and
(h) a statement of the amount of commission charged or the rate (if any)
at which ASIC was charged; and
(j) a statement of the amounts (if any) of all stamp duties and other
duties and taxes payable in connection with the transaction.
(4) A contract note given by a futures broker under subsection (1) in
respect of a transaction, being the acquisition or disposal of a futures option,
must include:
(a) the matters specified in paragraphs (3)(a), (b), (c), (g), (h)
and (j); and
(b) a description of the class of futures contracts in which is included
the futures contract to which the futures option relates; and
(c) the month and year for performance or settlement of the futures
contract to which the futures option relates; and
(d) the date by which the purchaser of the futures option, in order to
exercise the futures option, must declare an intention to exercise the futures
option; and
(e) a statement of the amount of the premium; and
(f) details of the price at which the purchaser of the futures option has,
by virtue of the futures option, an option or Chapter 8 right to assume a
bought position, or sold position, as the case requires, in relation to the
futures contract to which the futures option relates.
(5) A contract note given by a futures broker under subsection (1) in
respect of a transaction, being the acquisition or disposal of an eligible
exchange-traded option (in this subsection called the option),
must include:
(a) the matters specified in paragraphs (3)(a), (b), (c), (g), (h)
and (j); and
(b) a description of the commodity or index to which the option relates;
and
(c) the date by which the purchaser of the option, in order to exercise
the option, must declare an intention to exercise the option; and
(d) a statement of the amount of the premium; and
(e) details of:
(i) in a case where the option relates to a commodity—the price at
which the purchaser of the option has, by virtue of the option, an option or
right to purchase, or sell, as the case requires, that commodity; or
(ii) in a case where the purchaser of the option has, by virtue of the
option, an option or right to be paid 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—the specified number and the manner in which
that amount of money is to be determined.
(6) A futures broker must not include in a contract note given under
subsection (1), as the name of a person with or on behalf of whom the
broker has entered into the transaction, a name that the broker knows, or could
reasonably be expected to know, is not a name by which that person is ordinarily
known.
(7) For the purposes of this section, a futures contract is included in
the same class of futures contracts as another futures contract if, and only if,
the first-mentioned futures contract is of the same kind as the other futures
contract.
(1) Where:
(a) a futures broker has, at any time during a particular month, held
money or property on account of a client; or
(b) a futures broker has, before or during a particular month, acquired a
futures contract on behalf of a client, and, as at the end of that month, the
futures contract has not been disposed of;
the broker must, within 7 days after the end of that month, send to the
client a written statement setting out:
(c) the name or style under which the broker carries on business as a
futures broker and the address of the principal place at which the broker so
carries on business; and
(d) the opening cash balance for that month in the client’s account;
and
(e) all deposits, credits, withdrawals and debits affecting the account
during that month; and
(f) the cash balance in the account at the end of that month;
and
(g) in relation to each futures contract that the broker has, before or
during that month, acquired on behalf of the client and that, as at the end of
that month, has not been disposed of, particulars of the futures contract,
including the particulars required by virtue of paragraph 1206(3)(d), or
paragraphs 1206(4)(b), (e) and (f) or (5)(b), (d) and (e), as the case requires,
to be included in a contract note relating to the acquisition of the futures
contract; and
(h) details of each outstanding call for a deposit or margin in respect of
a futures contract that the broker has acquired on behalf of the
client.
(2) Where a futures broker has, during a particular month, authority to
operate on a discretionary account, the broker must, within 7 days after the end
of that month, send to the person, or to each person, as the case requires, who
gave instructions to the broker authorising the broker to operate on the
discretionary account a written statement setting out:
(a) the name or style under which the broker carries on business as a
futures broker and the address of the principal place at which the broker so
carries on business; and
(b) the opening cash balance for that month in the account (in this
subsection called the account) maintained by the broker in respect
of the discretionary account; and
(c) all deposits, credits, withdrawals and debits affecting the account
during that month; and
(d) the cash balance in the account at the end of that month;
and
(e) in relation to each futures contract:
(i) that the broker has acquired before or during that month;
and
(ii) the acquisition of which was an operation by the broker on the
discretionary account; and
(iii) that, as at the end of that month, has not been disposed
of;
particulars of the futures contract, including the particulars required
by virtue of paragraph 1206(3)(d), or paragraphs 1206(4)(b), (e) and (f) or
(5)(b), (d) and (e), as the case requires, to be included in a contract note
relating to the acquisition of the futures contract; and
(f) details of each outstanding call for a deposit or margin in respect of
a futures contract that the broker has acquired on behalf of the client and the
acquisition of which was an operation by the broker on the discretionary
account.
(1) A futures broker must maintain separately from other records such
records as correctly record and explain dealings in futures contracts by the
broker on the broker’s own account including, but not limited to, records
specifying:
(a) a description of each of those dealings together with the date on
which and the time at which:
(i) the instructions (if any) for each of those dealings were received by
the futures broker; and
(ii) the instructions (if any) for each of those dealings were transmitted
to the futures market on which the dealing was effected; and
(iii) the dealing was effected; and
(b) the source of the funds used for effecting those dealings.
(2) A futures broker is taken not to have maintained records in compliance
with subsection (1) unless the entries in the records are made in writing
in the English language or are made in such a manner as will enable them to be
readily accessible and to be readily converted into writing in the English
language.
(3) A futures broker must not knowingly take the other side of an order of
a client of the broker in relation to a futures contract unless:
(a) the client has consented to the broker taking the other side of the
order in relation to that futures contract; or
(b) in dealing in that futures contract on behalf of the client, the
broker is taken, for the purposes of this Act, to be dealing in that futures
contract on the broker’s own account.
(4) For the purposes of subsection (3), a futures broker takes the
other side of an order of a client of the broker in relation to a futures
contract where the broker:
(a) when dealing on the broker’s own account, assumes a bought
position or sold position in relation to the contract; and
(b) when dealing on the instructions of the client, assumes the opposite
sold position or bought position in relation to the contract.
(1) In this section:
client, in relation to a futures broker, means a person on
behalf of whom the broker deals, or from whom the broker accepts instructions to
deal, in futures contracts, but does not include:
(a) the broker; or
(b) if the broker is a body corporate—a director, or an officer, of
the broker; or
(c) an employee of the broker; or
(d) if the broker is a body corporate—a body corporate that is
related to the broker; or
(e) a person who is associated with, or who is a partner of, the broker;
or
(f) a body corporate in which the broker has, or the broker and partners
of the broker together have, a controlling interest.
credit facility means a document evidencing the right of a
person to obtain money on credit from another person, and, without limiting the
generality of the foregoing, includes a letter of credit and a bank
guarantee.
property includes credit facilities and securities.
relevant credit balance, in relation to a client of a futures
broker, means the total of:
(a) the amounts deposited by the broker in respect of the client in a
clients’ segregated account, or clients’ segregated accounts, of the
broker, less so much of those amounts as has been withdrawn from the account or
accounts; and
(b) the values of the items of property that:
(i) have, in respect of the client, been deposited by the broker in safe
custody pursuant to subsection (3); and
(ii) have not been withdrawn from safe custody; and
(iii) under the terms and conditions on which they were deposited with, or
received by, the broker, are available to meet, or to provide security in
connection with the meeting of, relevant liabilities of the client.
relevant liabilities, in relation to a client of a futures
broker, means debts and liabilities of the client arising out of dealings in
futures contracts effected by the broker on behalf of the client.
settling, in relation to a dealing in a futures contract,
includes making delivery, or taking delivery, of a commodity to which the
futures contract relates.
(2) For the purposes of the definition of relevant credit
balance in subsection (1), the value of an item of property at a
particular time is:
(a) in the case of a credit facility—the amount of money that the
person entitled to the right evidenced by the credit facility can, at that time
or within a reasonable period after that time, obtain by virtue of that right;
or
(b) in any other case—the market value of the property as at the end
of the last business day before that time.
(3) Where, in connection with:
(a) dealings in futures contracts effected, whether in this jurisdiction
or elsewhere or proposed to be effected, by a futures broker on behalf of a
client of the broker; or
(b) instructions by a client of a futures broker to deal in futures
contracts, whether in this jurisdiction or elsewhere;
money or property (other than property to which section 1214 applies)
is deposited with the broker by the client, or is received by the broker for, or
on behalf of, the client, the broker must:
(c) in the case of money—deposit the money in a clients’
segregated account of the broker maintained in this jurisdiction or in the place
where the money was deposited with, or received by, the broker; or
(d) in the case of property—deposit the property in safe custody, in
this jurisdiction or in the place where the property was deposited with, or
received by, the broker, in such a manner that the property is segregated from
property other than property deposited by the broker in safe custody pursuant to
this subsection;
on or before the next day after the money or property is deposited with, or
received by, the broker that is a day on which the money or property can be
deposited as first mentioned in paragraph (c) or (d).
(4) Without limiting the generality of subsection (3), where, in
connection with dealings in futures contracts effected, whether in this
jurisdiction or elsewhere, by a futures broker, the broker receives from a
person an amount of money some or all of which is attributable to dealings in
futures contracts so effected on behalf of clients of the broker, the broker
must, on the next day on which the amount can be so deposited, deposit the
amount in a clients’ segregated account of the broker maintained in this
jurisdiction or in the place where the broker receives the amount.
(4A) A clients’ segregated account of a futures broker must be
designated as a clients’ segregated account, unless it is maintained
outside this jurisdiction and the law in force in the place where it is
maintained requires it to be designated in some other way.
(4B) If:
(a) a clients’ segregated account of a futures broker is required by
subsection (4A) to be designated as a clients’ segregated account;
and
(b) the account is designated in a way that complies substantially, but
not completely, with that requirement;
subsection (4A) is taken to be complied with in relation to the
account.
(5) Where, pursuant to this section, a futures broker deposits money in
respect of a client in a clients’ segregated account of the broker, the
broker must not withdraw any of the money except for the purpose of:
(a) making a payment to, or in accordance with the written direction of, a
person entitled to the money; or
(b) making a payment for, or in connection with, the entering into,
margining, guaranteeing, securing, transferring, adjusting or settling of
dealings in futures contracts effected by the broker on behalf of clients only;
or
(c) defraying brokerage and other proper charges incurred in respect of
dealings in futures contracts effected by the broker on behalf of the client;
or
(d) investing it:
(i) in any manner in which trustees are for the time being authorised by
law to invest trust funds; or
(ii) on deposit with an eligible money market dealer; or
(iii) on deposit at interest with:
(A) an Australian ADI; or
(B) an approved foreign bank in relation to the broker; or
(iv) on deposit with a clearing house for a futures exchange; or
(v) in the purchase of cash management trust interests; or
(e) paying to the broker the amount of a fee that the broker may charge,
or an amount to which the broker is entitled, under an agreement with the client
made under subsection (7); or
(f) making a payment that is otherwise authorised by law;
or as permitted by subsection (10).
(5A) If, under subsection (5), a broker (the paying
broker) withdraws money from a clients’ segregated account and
pays it to another broker (the receiving broker):
(a) the paying broker must ensure that the receiving broker is notified,
at the same time as the payment is made or as close to that time as is
practicable, of the fact that the money has been withdrawn from a clients’
segregated account of the paying broker and should be paid into a clients’
segregated account of the receiving broker; and
(b) on or before the next day after the receiving broker receives the
payment, the receiving broker must pay the money into a clients’
segregated account of the receiving broker.
(5B) A notification under paragraph (5A)(a) may be in writing or in
an electronic or other form and may convey its message by express words, or by a
code or some other means understood by the brokers concerned.
(6) A futures broker must not deal with property deposited by the broker
in safe custody under subsection (3) except:
(a) in accordance with the terms and conditions on which it was deposited
with, or received by, the broker; or
(b) for the purpose of meeting obligations incurred by the broker in
connection with margining, guaranteeing, securing, transferring, adjusting or
settling dealings in futures contracts effected by the broker on behalf of
clients only.
(7) A futures broker who invests as mentioned in paragraph (5)(d)
money that was, in respect of a client of the broker, deposited by the broker
under subsection (3):
(a) may charge such fee (if any) for so investing the money; and
(b) is entitled to so much (if any) of the return on the money so
invested;
as the broker and the client agree in writing.
(8) A futures broker must not invest an amount pursuant to
paragraph (5)(d) by depositing it with a person for that person to invest
unless:
(a) the broker:
(i) has informed the person that the amount has been withdrawn from a
clients’ segregated account of the broker and is money to which clients of
the broker are entitled; and
(ii) has obtained from the person a written statement that is signed by
the person, sets out the amount and acknowledges that the broker has informed
the person as mentioned in subparagraph (i); or
(b) the investment is made by the broker paying the amount into an account
maintained with the person in relation to which the following conditions are
satisfied:
(i) the account is maintained for the sole purpose of having amounts
invested in it pursuant to paragraph (5)(d);
(ii) the broker has informed the person that amounts paid into the account
will be amounts withdrawn from a clients’ segregated account of the broker
and will be moneys to which clients of the broker are entitled;
(iii) the broker has obtained from the person a written statement signed
by the person that acknowledges that the broker has informed the person as
mentioned in subparagraph (ii).
(9) Where, at a particular time, the total amount of the relevant
liabilities of a client of a futures broker exceeds the relevant credit balance
of the client, the broker may, in respect of the client, deposit in a
clients’ segregated account of the broker an amount of money not greater
than the amount of the excess, and, if the broker does so, the amount so
deposited is, subject to subsection (10), taken to be money to which the
client is entitled.
(10) Where:
(a) a futures broker has, in respect of a client of the broker, deposited
an amount pursuant to subsection (9) in a clients’ segregated account
of the broker; and
(b) the relevant credit balance of the client exceeds by a particular
amount the total amount of the relevant liabilities of the client;
the broker may withdraw from the account so much of the amount referred to
in paragraph (a) as does not exceed the amount first referred to in
paragraph (b).
(11) A futures broker must keep in relation to the clients’
segregated account, or clients’ segregated accounts, of the broker
financial records that:
(a) are separate from any other financial records of the broker;
and
(b) record separately in respect of each client of the broker particulars
of the amounts deposited in, and the amounts withdrawn from, the account or
accounts in respect of the client; and
(c) record, separately from the particulars referred to in
paragraph (b):
(i) particulars (including particulars of withdrawals) of so much of the
amounts deposited as required by subsection (4) in the account or accounts
as was not attributable to dealings in futures contracts effected by the broker
on behalf of clients of the broker; and
(ii) particulars of all amounts deposited in the account or accounts
pursuant to subsection (9); and
(iii) particulars of all amounts withdrawn from the account or accounts
pursuant to subsection (10).
(12) A futures broker must keep records that:
(a) relate to deposits of property in safe custody by the broker pursuant
to subsection (3); and
(b) record separately in respect of each client of the broker particulars
of the property deposited in respect of the client.
(13) Section 1213 applies, so far as it is capable of application, in
relation to financial records, and other records, that are required by
subsections (11) and (12), respectively, of this section to be kept by a
futures broker, and so applies as if those accounting records and other records
were financial records required by that section to be kept by the
broker.
(14) Subject to subsections (15) and (16), none of the
following:
(a) money deposited by a futures broker pursuant to this section in a
clients’ segregated account of the broker;
(b) property in which money deposited by a futures broker as mentioned in
paragraph (a) of this subsection has been invested pursuant to
paragraph (5)(d);
(c) property deposited by a futures broker in safe custody pursuant to
subsection (3);
is available for the payment of a debt or liability of the broker or is
liable to be attached, or taken in execution, under the order or process of a
court at the instance of a person suing in respect of such a debt or
liability.
(15) Nothing in subsection (14) affects the right of a client of a
futures broker to recover money or property to which the client is
entitled.
(16) Where a futures broker is entitled to withdraw money from a
clients’ segregated account of the broker for the purpose of making a
payment to the broker, subsection (14) does not apply in relation to that
money.
(17) Where a futures broker invests money pursuant to
paragraph (5)(d) by depositing it with a person for the person to invest,
neither that money, nor any property in which the person invests any of that
money, is available for the payment of a debt or liability of the person or is
liable to be attached, or taken in execution, under the order or process of a
court at the instance of a person suing in respect of such a debt or
liability.
(18) Nothing in this section affects a claim or lien that a futures broker
has, under an agreement, under an Australian law or otherwise, against or
on:
(a) money deposited by the broker pursuant to this section in a
clients’ segregated account of the broker; or
(b) property in which such money has been invested pursuant to
paragraph (5)(d); or
(c) property deposited by the broker in safe custody pursuant to
subsection (3).
(19) A futures broker must not pay an amount into a client’s
segregated account of the broker except as required or authorised by this
section or the regulations.
A futures broker must, before accepting a person as a client of the
broker, give to the person:
(a) a document that:
(i) explains the nature of futures contracts; and
(ii) explains the nature of the obligations assumed by a person who
instructs a futures broker to enter into a futures contract; and
(iii) sets out a risk disclosure statement in the prescribed form;
and
(iv) sets out the specifications, and details of the essential terms, of
each kind of futures contract in which the broker deals on behalf of clients;
and
(b) a copy of each agreement into which the broker proposes, if the broker
agrees to accept instructions from the person in relation to dealings in futures
contracts, to require the person to enter.
In this Part, unless the contrary intention appears, a reference to a
book, futures contract or business of or in relation to a futures broker who
carries on business in partnership is a reference to such a book, futures
contract or business of or in relation to the partnership.
(1) This Part applies in relation to a futures broker in relation to his,
her or its business of dealing in futures contracts, whether carried on in this
jurisdiction or elsewhere.
(2) This Part does not affect the operation of Chapter 2M in relation
to a company that holds a futures brokers licence or in relation to a business
of dealing in futures contracts that such a company carries on.
(1) A futures broker must:
(a) keep such financial records as correctly record and explain the
transactions and financial position of the business of dealing in futures
contracts carried on by the broker; and
(b) keep financial records in such a manner as will enable true and fair
profit and loss statements and balance sheets to be prepared from time to time;
and
(c) keep financial records in such a manner as will enable profit and loss
statements and balance sheets of the business of dealing in futures contracts
carried on by the broker to be conveniently and properly audited.
(2) Without limiting the generality of subsection (1), a futures
broker is taken not to have complied with that subsection in relation to records
if those records:
(a) are not 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; or
(b) are not kept in sufficient detail to show particulars of:
(i) all money received or paid by the broker, including money paid to, or
disbursed from, an account of the kind referred to in paragraph 1209(3)(c);
and
(ii) all dealings in futures contracts made by the broker, the charges and
credits arising from them, and the name of the person on whose behalf each
dealing was effected; and
(iii) all income received from commissions, interest and other sources,
and all expenses, commissions and interest paid, by the broker; and
(iv) all the assets and liabilities (including contingent liabilities) of
the broker; and
(v) all futures contracts to which the broker has become a party as a
result of trading on the broker’s own account; and
(vi) all futures contracts dealt with by the broker pursuant to
instructions given by another person, showing who gave the instructions;
and
(vii) all property that is property of the broker and in respect of which
the business rules of a futures exchange authorise the making of a futures
contract in the futures market of the futures exchange, showing by whom the
property is held and, if held by some other person, whether or not the property
is so held as security against loans or advances; and
(viii) all such property that is not property of the broker and for which
the broker or any nominee controlled by the broker is accountable, showing by
whom, and for whom, the property is held and the extent to which the property is
either held for safe custody or deposited with a third party as security for
loans or advances made to the broker; or
(c) are not kept in sufficient detail to show separately particulars of
every transaction by the broker; or
(d) do not specify the day on which or the period during which each
transaction by the broker took place; or
(e) do not contain copies of acknowledgments of the receipts of property
received by the broker from clients.
(3) Without affecting the operation of subsections (1) and (2), a
futures broker is taken not to have complied with subsection (1) in
relation to records if, in respect of a discretionary account on which the
broker operates, those records are not kept in sufficient detail to show the
particulars that the broker is required to give to clients in order to comply
with subsection 1207(2).
(4) Without affecting the operation of subsection (2) or (3), a
futures broker must keep records in sufficient detail to show separately
particulars of all transactions by the broker:
(a) with, on behalf of, or on the account of, clients of the broker,
excluding, in a case where the broker carries on business in partnership, the
partners in the firm; and
(b) in a case where the broker carries on business in partnership—on
the broker’s own account or with, on behalf of, or on the account of, the
partners in the firm; and
(c) in a case where the broker does not carry on business in
partnership—on the broker’s own account; and
(d) with, on behalf of, or on the account of, other futures brokers;
and
(e) with, on behalf of, or on the account of, representatives of the
broker; and
(f) with, on behalf of, or on the account of, employees of the
broker.
(5) An entry in the financial and other records of a futures broker
required to be kept in accordance with this section, and any matter recorded by
a futures exchange in relation to a member pursuant to subsection 1270(3) is
taken to have been made by, or with the authority of, the broker or
member.
(6) Where a record required by this section to be kept is not kept in
writing in the English language, the futures broker must, 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.
(7) Notwithstanding any other provision of this section, a futures broker
is not taken 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 futures contracts that is
carried on by the broker.
(8) If financial records or other records are kept by a futures broker at
a place outside this jurisdiction, the broker must cause to be sent to and kept
at a place in this jurisdiction such particulars with respect to the business
dealt with in those records as will enable true and fair profit and loss
statements and balance-sheets to be prepared.
(9) If any financial records of a futures broker are kept at a place
outside this jurisdiction, the broker must, if required by ASIC to produce those
records at a place in this jurisdiction, comply with the requirement not later
than 28 days after the requirement is made.
(1) Where a futures broker receives for safe custody property:
(a) that is the property of another person (in this section called the
client); and
(b) that is, or is to be, delivered in accordance with a futures contract;
and
(c) for which the broker or a nominee of the broker is
accountable;
the broker must forthwith:
(d) if the client requests that the property be deposited in safe custody
with the broker’s bankers—cause it to be so deposited or notify the
client of any failure to comply with the request, whether or not caused by a
refusal by the bankers to comply with the request; or
(e) if the client does not make, or the bankers refuse to comply with,
such a request and the business rules of the futures exchange that maintained or
provided the futures market on which the contract was made enable the property
to be deposited in safe custody—cause the property to be so deposited in
accordance with those rules.
(2) A futures broker must not deposit as security for a loan or advance
made to the broker property of a kind referred to in subsection (1) unless
an amount is owed to the broker by the client in connection with a transaction
entered into on the instructions of the client and the broker:
(a) gives a written notice to the client identifying the property and
stating that the broker intends to deposit the property as security for a loan
or advance to the broker; and
(b) deposits the property as security for a loan or advance to the broker,
being a loan or advance of an amount that does not exceed the amount owed to the
broker by the client on the day of the receipt by the broker of the
property.
(3) Where:
(a) a futures broker has given a notice to a person as mentioned in
subsection (2) and has deposited the property referred to in the notice as
security for a loan or advance; and
(b) the person:
(i) has paid to the broker the amount owed by the person to the broker at
the time the property was so deposited; and
(ii) requests the broker to withdraw the property from deposit;
the broker must, as soon as practicable after the request, withdraw the
property from deposit, but nothing in this subsection prevents the broker from
redepositing the property, as permitted by subsection (2), as a security
for a loan or advance.
(4) Where a futures broker deposits as security for a loan or advance made
to the broker property of a kind referred to in subsection (1), the broker
must, at the end of the period of 3 months after the day on which the property
is deposited, and at the end of each subsequent period of 3 months if the
property is still on deposit, send to the person whose property it is written
notice to that effect.
(1) Within 1 month after becoming the holder of a futures brokers licence,
a futures broker (other than an Australian ADI) must 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 the broker’s financial statements.
(2) Subject to this section, a person must not:
(a) consent to be appointed as auditor of a futures broker; or
(b) act as auditor of a futures broker; or
(c) prepare a report required by this Act to be prepared by an auditor of
a futures broker;
if:
(d) the person is not a registered company auditor; or
(e) the person, or a body corporate in which the person has a substantial
holding, is indebted in an amount exceeding $5,000 to the futures broker or, if
the futures broker is a body corporate, to a body corporate related to the
futures broker; or
(f) the person is a partner or employee of the futures broker;
or
(g) in a case where the futures broker is a body corporate—the
person is:
(i) an officer of the body; or
(ii) a partner, employer or employee of an officer of the body;
or
(iii) a partner or employee of an employee of an officer of the
body.
(3) Subject to this section, a firm must not:
(a) consent to be appointed as an auditor of a futures broker;
or
(b) act as auditor of a futures broker; or
(c) prepare a report required by this Act to be prepared by an auditor of
a futures broker;
unless:
(d) at least one member of the firm is a registered company auditor who is
ordinarily resident in Australia; and
(e) where the business name under which the firm is carrying on business
is not registered under a law of a State or Territory relating to the
registration of business names—there has been lodged a return in the
prescribed form showing, in relation to each member of the firm, the
member’s full name and address as at the time when the firm so consents,
acts or prepares a report; and
(f) no member of the firm, and no body corporate in which any member of
the firm has a substantial holding, is indebted in an amount not exceeding
$5,000 to the futures broker or, if the futures broker is a body corporate, to a
body corporate that is related to the futures broker; and
(ga) no member of the firm is a partner or employee of the futures broker;
and
(g) in a case where the futures broker is a body corporate—no member
of the firm is:
(i) an officer of the body; or
(ii) a partner, employer or employee of an officer of the body;
or
(iii) a partner or employee of an employee of an officer of the body;
and
(h) in a case where the futures broker is a body corporate—no
officer of the body receives any remuneration from the firm for acting as a
consultant to it on accounting or auditing matters.
(4) For the purposes of paragraphs (2)(e) and (3)(f), disregard a
debt owed by a natural person to a body corporate if:
(a) the body corporate is:
(i) an Australian ADI; or
(ii) a body corporate registered under the Life Insurance Act
1995; and
(b) the debt arose because of a loan that the body corporate or entity
made to the person in the ordinary course of its ordinary business;
and
(c) the person used the amount of the loan to pay the whole or part of the
purchase price of premises that the person uses as their principal place of
residence.
(5) For the purposes of subsections (2) and (3), a person is taken to
be an officer of a body corporate if:
(a) the person is an officer of a related body corporate; or
(b) except where ASIC, if it thinks fit in the circumstances of the case,
directs that this paragraph not apply in relation to the person—the person
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 is not taken to be an
officer of a body corporate by reason only of being or having been the
liquidator of the body corporate or of a related body corporate.
(7) For the purposes of this section, a person is not taken to be an
officer of a body corporate by reason only of having been appointed as an
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 being or having been authorised 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 futures broker is taken to
be an appointment of all persons who are members of the firm and are registered
company auditors, whether resident in Australia or not, at the date of the
appointment.
(9) Where a firm that has been appointed as auditor of a futures broker 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 taken under subsection (8) to be an auditor of
the broker and who has so retired or withdrawn from the firm as previously
constituted is taken to have resigned as auditor of the company as from the day
of the person’s 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 1216 does not apply to that
resignation; and
(b) a person who is a registered company auditor and who is so admitted to
the firm is taken to have been appointed as an auditor of the broker as from the
day of 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 broker;
but nothing in 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 futures broker that is taken by
subsection (8) to have been made by reason of the appointment of the firm
as auditor of the broker 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 futures broker is not taken to be duly made or given
unless it is signed, in the firm name and in the name of the member concerned,
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 taken to be made by virtue
of subsection (9)) or under subsection (16), the futures broker must,
within 14 days after the appointment, lodge with ASIC a notice in writing
stating that the broker has made the appointment and specifying the name of the
person or firm.
(13) Without limiting the generality of section 1311, if, in
contravention of this section, a firm consents to be appointed, or acts as, an
auditor of a futures broker or prepares a report required by this Act to be
prepared by an auditor of a futures broker, each member of the firm is guilty of
an offence.
(14) A person must not:
(a) if the person has been appointed auditor of a futures
broker—knowingly disqualify himself or herself while the appointment
continues from acting as auditor of the broker; or
(b) if the person is a member of a firm that has been appointed auditor of
a futures broker—knowingly disqualify the firm while the appointment
continues from acting as auditor of the broker.
(15) An auditor of a futures broker holds office until death, until
removal or resignation from office in accordance with section 1216 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 futures broker, if there is no surviving or continuing auditor of the broker,
the broker must 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 futures broker must not appoint a person or firm as auditor of the
broker unless that person or firm has, before the appointment, consented by
notice in writing given to the broker to act as auditor and has not withdrawn
the consent by notice in writing given to the broker.
(19) This section does not apply in relation to a body corporate (except a
proprietary company) in relation to which section 327 applies.
(1) A futures broker may, with the consent of ASIC, remove an auditor of
the broker from office.
(2) An auditor of a futures broker may, by notice in writing given to the
broker, resign as auditor of the broker if:
(a) the auditor has, by notice in writing given to ASIC, applied for
consent to the resignation and, at or about the same time as the notice was
given to ASIC, notified the broker in writing of the application to ASIC;
and
(b) the auditor has received the consent of ASIC.
(3) ASIC must, as soon as practicable after receiving a notice from an
auditor under subsection (2), notify the auditor and the futures broker
whether it consents to the resignation of the auditor.
(4) A statement made by an auditor in an application to ASIC under
subsection (2) or in answer to an inquiry by ASIC 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 1308; and
(b) may not be made the ground of a prosecution (other than a prosecution
for an offence against section 1308), action or suit against the
auditor;
and a certificate by ASIC that the statement was made in the application or
in answer to an inquiry by ASIC is conclusive evidence that the statement was so
made.
(5) Subject to subsection (6), the resignation of an auditor takes
effect:
(a) on the date (if any) specified for the purpose in the notice of
resignation; or
(b) on the date on which ASIC gives its consent to the resignation;
or
(c) on the date (if any) fixed by ASIC 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
1215(3)(d), of acting as auditor of a futures broker, the member so retiring or
withdrawing is, if not disqualified from acting as auditor of the broker, taken
to be the auditor of the broker until the member obtains the consent of ASIC to
the retirement or withdrawal.
(7) This section does not apply in relation to a body corporate (except a
proprietary company) in relation to which section 329 applies.
The reasonable fees and expenses of an auditor of a futures broker are
payable by the broker.
(1) In this section:
financial year, in relation to a futures broker,
means:
(a) if the broker is a natural person—a period of 12 months ending
on 30 June in a year; or
(b) if the broker is a body corporate—a period that is a financial
year of the body corporate because of the definition of financial
year in section 9.
prescribed day, in relation to a financial year of a futures
broker, means the day that is:
(a) if the broker is a natural person—2 months; or
(b) if the broker is a body corporate—3 months;
after the end of that financial year or, if an extension is approved under
subsection (3), the day on which the extended period ends.
(2) A futures broker (other than an Australian ADI) must, in respect of
each financial year, other than a financial year that ended before the date on
which the broker commenced to carry on business as a futures broker, prepare a
true and fair profit and loss statement and balance sheet on the basis of such
accounting principles (if any) and containing such information and matters as
are prescribed for the purposes of this subsection and lodge them with ASIC
before the prescribed day for that financial year, together with an
auditor’s report containing such information and matters as are prescribed
for the purposes of this subsection and such other information and matters as
the auditor thinks fit to include in the report.
(3) ASIC may, on application made by a futures broker and the auditor of
the broker before the end of the period referred to in paragraph (a) or
(b), as the case requires, of 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 end 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 ASIC
imposes.
(4) Where an approval under subsection (3) in relation to a futures
broker is given subject to conditions, the broker must comply with those
conditions.
(1) An auditor of a futures broker has a right of access at all reasonable
times to the financial records and other records, including any register, of the
broker, and is entitled to require from the broker or, in the case of a futures
broker that is a body corporate, from any executive officer of the broker, such
information and explanations as the auditor desires for the purposes of
audit.
(2) A futures broker, or an executive officer of a futures broker that is
a body corporate, must not, without lawful excuse:
(a) refuse or fail to allow an auditor of the broker access, in accordance
with subsection (1), to financial records or other records, including any
register, of the broker; or
(b) refuse or fail to give information, or an explanation, as and when
required under subsection (1); or
(c) otherwise hinder, obstruct or delay an auditor of the broker in the
performance or exercise of the auditor’s duties or powers.
(1) Where an auditor, in the performance of the duties of auditor of a
futures broker, becomes aware of a prescribed matter, the auditor must, within 7
days after becoming aware of that matter, lodge a written report on the matter
and send a copy of the report to:
(a) the broker; and
(b) each futures exchange of which the broker is a member and to each
clearing house (if any) for that futures exchange; and
(c) each futures association of which the broker is a member, unless the
futures association is also a futures exchange of which the broker 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 futures broker to meet the broker’s obligations
as a broker; or
(b) constitutes or may constitute a contravention of section 1209,
1213 or 1214; or
(c) constitutes or may constitute a contravention of a condition of a
licence held by the futures broker.
(1) Where, in relation to a futures broker who is a member of a futures
exchange, the futures exchange becomes aware of a prescribed matter, the futures
exchange must, as soon as practicable after becoming aware of the matter, lodge
a written report on the matter and send a copy of the report to the
broker.
(2) Subsection (1) applies:
(a) in relation to a clearing house for a futures exchange and a member of
the clearing house; and
(b) in relation to a futures association and a member of the futures
association (unless the futures association is also a futures
exchange);
in the same manner as it applies in relation to a futures exchange and a
member of the futures exchange.
(3) In this section, prescribed matter, in relation to a
futures broker, means a matter that, in the opinion of the futures exchange,
clearing house or futures association concerned:
(a) has adversely affected, is adversely affecting, or may adversely
affect, the ability of the broker to meet the broker’s obligations as a
broker; or
(b) constitutes or may constitute a contravention of section 1209,
1213 or 1214; or
(c) constitutes or may constitute a contravention of a condition of a
licence held by the broker; or
(d) constitutes a failure to make, in accordance with Part 8.6,
contributions to a fidelity fund.
(1) An auditor of a futures broker has qualified privilege in respect
of:
(a) any statement made, orally or in writing, in the course of performing
the duties of an auditor; or
(b) the lodging of a report, or the sending of a report under
section 1220 to the futures broker, a futures exchange, a clearing house
for a futures exchange, or a futures association.
(2) A futures exchange, a clearing house for a futures exchange, a futures
association, or an officer of a futures exchange, of a clearing house for a
futures exchange, or of a futures association, has qualified privilege in
respect of:
(a) any statement made, orally or in writing, in the course of performing
the duties imposed by section 1221; or
(b) the lodging of any report with ASIC, or the sending of any report to a
futures broker, under section 1221.
(3) A person has qualified privilege in respect of the publishing
of:
(a) a statement made by an auditor of a futures broker as mentioned in
paragraph (1)(a), or by a futures exchange, a clearing house for a futures
exchange, a futures association, or an officer, as mentioned in
paragraph (2)(a); or
(b) a document prepared by an auditor of a futures broker in the course of
performing the duties of an auditor; or
(c) a document prepared by a futures exchange, a clearing house for a
futures exchange, a futures association, or an officer of a futures exchange, of
a clearing house for a futures exchange, or of a futures association, in the
course of performing the duties imposed by section 1221; or
(d) a document required by or under this Chapter to be lodged, whether or
not the document has been lodged.
Nothing in this Part prevents a futures exchange or futures association
imposing on members of that futures exchange or futures association any
obligations or requirements (not being obligations or requirements inconsistent
with this Act) that the futures exchange or futures association thinks fit with
respect to:
(a) the audit of financial statements (including the audit of financial
statements by an auditor appointed by the futures exchange or futures
association); or
(b) the information to be given in reports from auditors; or
(c) the keeping of books.
(1) Where the Court is satisfied that:
(a) there are reasonable grounds for believing that:
(i) there is a deficiency in an account that is, or has at any time been,
a clients’ segregated account of a person; and
(ii) the person was, when the deficiency occurred, a futures broker or a
member of a futures organisation; or
(b) there has been, at a time when a person was a futures broker or a
member of a futures organisation, undue delay, or unreasonable refusal, on the
person’s part in paying, applying or accounting for money as required by
this Chapter; or
(c) a person has, at a time when the person was a futures broker or a
member of a futures organisation, failed to pay money into a clients’
segregated account of the person as required by this Chapter; or
(d) a person who is, or has at any time been, a futures broker or a member
of a futures organisation, is carrying on, or last carried on, as the case
requires, a futures broking business otherwise than in partnership
and:
(i) in any case—the last futures brokers licence held by the person
has been revoked or suspended; or
(ii) in any case—the person no longer carries on a futures broking
business; or
(iii) if the person is a natural person—the person has died, or is
incapable, because of physical or mental incapacity, of managing his or her
affairs;
the Court may by order restrain dealings in respect of specified bank
accounts that the person holds or maintains (whether in Australia or elsewhere),
subject to such terms and conditions as the Court imposes.
(2) An order under subsection (1) may only be made on an application
by ASIC or by the futures organisation (if any) concerned.
(4) 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.
(5) Where ASIC makes an application to the Court for the making of an
order under subsection (1), the Court must not require ASIC, as a condition
of granting an interim order under subsection (4), to give any undertaking
as to damages.
Where an order made under section 1224 is directed to a banker or a
body corporate, the banker or body corporate must:
(a) disclose to the applicant for the order every account kept by the bank
or body corporate in the name of the person to whom the order relates, and any
account that the banker or body corporate reasonably suspects is held or kept by
the bank or body corporate for the benefit of that person; and
(b) permit the applicant for the order 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 or the like books in the possession
of the body corporate.
Where an order is made under section 1224, the Court may, on the
application of ASIC, a futures organisation or a person affected by the order,
make further orders:
(a) dealing with such ancillary matters as the Court considers necessary
or desirable; and
(b) directing that all or any of the money in an account affected by an
order so made be paid by the bank or body corporate to ASIC or a person
nominated by ASIC, on such terms and conditions as the Court thinks fit;
and
(c) discharging or varying the order.
(1) An order made under section 1226 may include directions to
the person to whom the money is paid directing that that person:
(a) must cause the money to be paid into a trust account; or
(b) is authorised to prepare a scheme for distributing the money to
persons who claim, during a period of 6 months after ASIC or that other person
receives the money, to be entitled to the money and satisfy ASIC or that other
person that they are so entitled; or
(c) where the money received is insufficient to pay all proved claims,
may, notwithstanding any rule of law or equity to the contrary, apportion the
money among the claimants in proportion to their proved claims and show in the
scheme how the money is so apportioned.
(2) Where a person prepares a scheme for distribution of money pursuant to
subsection (1), the person must apply to the Court for approval of the
scheme and for directions with respect to it.
(3) The Court may give such directions as to the money held in a trust
account pursuant to subsection (1), as to the persons to whom and in what
amounts the whole or any portion of that money must be paid, and as to the
payment of the balance of the money (if any) remaining in the account, as the
Court thinks fit.
(1) A futures organisation must keep a fidelity fund, and the board of the
futures organisation must administer the fidelity fund.
(2) The assets of a fidelity fund of a futures organisation are the
property of the futures organisation, but must be kept separately from all other
property of the futures organisation and must be held in trust for the purposes
set out in this Part.
(1) The fidelity fund of a futures organisation consists of:
(a) in the case of a fidelity fund established before the commencement of
this Act—the money, and other property, of which the fund consisted
immediately before that commencement; and
(b) in the case of a fidelity fund established after the commencement of
this Act—any amount that is paid to the credit of the fund by the futures
organisation on the establishment of the fund; and
(ba) money paid into the fidelity fund as required by paragraphs
1234(4)(d) and 1235(4)(d); and
(c) money paid to the futures organisation, in accordance with this Part
or the business rules of the futures organisation, by contributing members of
the futures organisation; and
(d) the interests and profits from time to time accruing from the
investment of the fidelity fund; and
(e) money paid into the fidelity fund by the futures organisation;
and
(f) money recovered by or on behalf of the futures organisation in the
exercise of a right of action conferred by this Part; and
(g) money paid by an insurer pursuant to a contract of insurance or
indemnity entered into by the futures organisation under section 1249;
and
(h) all other money lawfully paid into the fund.
(2) Where a futures organisation has, under paragraph (1)(b), paid an
amount to the credit of its fidelity fund:
(a) the Minister may approve in writing, on such conditions (if any) as
are specified in the approval, the repayment of the whole, or a specified part,
of the amount from the fidelity fund to the general funds of the futures
organisation; and
(b) if the Minister does so, the whole, or the specified part, as the case
may be, of the amount may, in accordance with the conditions (if any) so
specified, be so repaid.
The money in a fidelity fund must, until invested or applied in
accordance with this Part, be kept in a separate account with an Australian
ADI.
Subject to this Part, there must be paid out of the fidelity fund of a
futures organisation in such order as the board of the futures organisation
deems proper:
(a) the amount of all claims, including costs, allowed by the board or
established against the futures organisation under this Part; and
(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 futures organisation or the board of the rights, powers and
authorities vested in it by this Part in relation to the fund; and
(c) all premiums payable in respect of contracts of insurance or indemnity
entered into by the futures organisation under section 1249; and
(d) the expenses incurred in the administration of the fund, including the
salaries and wages of persons employed by the futures organisation or the board
in relation to the fund; and
(e) all other money payable out of the fund in accordance with the
provisions of this Chapter.
(1) A futures organisation must establish and keep proper accounts of its
fidelity fund and must, within the period of 3 months that next succeeds the end
of its financial year, cause a balance-sheet in respect of those accounts to be
made out as at the end of that financial year.
(2) A futures organisation must appoint a registered company auditor to
audit the accounts of the fidelity fund.
(3) The auditor appointed by a futures organisation must audit the
accounts of the fidelity fund and must audit each balance-sheet and cause a
report on the accounts and balance-sheet to be laid before the board of the
futures organisation not later than 1 month after the balance-sheet is made
out.
(4) A futures organisation must give to ASIC a copy of each report laid
before the board of the futures organisation under this section and of the
balance-sheet to which the report relates within 14 days after the report was so
laid before the board.
(1) The board of a futures organisation may, by resolution, appoint a
management sub-committee of not fewer than 3 and not more than 5 persons, at
least one of whom is also a member of the board.
(2) The board of a futures organisation 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).
(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 board of a futures organisation under this section
may at any time, by resolution of the board, be varied or revoked.
(5) The board of a futures organisation 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.
(6) A delegation by the board of a futures organisation under this section
does not prevent the exercise of a power, authority or discretion by that
board.
(1) A person is not to be admitted to membership of a futures organisation
unless:
(a) in any case—the person has paid to the futures organisation, as
agent for the Commonwealth, the levy known as futures organisation (application
for membership) fidelity fund contribution; or
(b) if the organisation is not a futures exchange—the person is
already a member of a futures exchange.
Note: For the imposition and amount of the levy referred to
in paragraph (a), see the Corporations (Futures Organisations Levies)
Act 2001.
(2) A contributing member of a futures organisation must, on or before
31 March in each year, pay to the futures organisation, as agent for the
Commonwealth, the levy known as futures organisation (annual membership)
fidelity fund contribution.
Note: For the imposition and amount of the levy, see the
Corporations (Futures Organisations Levies) Act 2001.
(3) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(1) of the Corporations (Futures
Organisations Levies) Act 2001, to a futures organisation as agent for the
Commonwealth:
(a) the futures organisation must pay an amount equal to the levy amount
to the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the futures organisation; and
(c) the Commonwealth must pay the amount so appropriated to the futures
organisation; and
(d) the futures organisation must pay the amount it receives under
paragraph (c) into its fidelity fund.
(4) A payment of an amount to a futures organisation as required by
paragraph (3)(c) in respect of a particular levy amount is subject to a
condition that, if the Commonwealth becomes liable to refund the whole or a part
of the levy amount, the future organisation must pay to the Commonwealth an
amount equal to the amount that the Commonwealth is liable to refund. The
futures organisation may pay, out of its fidelity fund, any amount so required
to be paid to the Commonwealth.
(5) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to a
futures organisation as agent for the Commonwealth. However, the operation of
that Act in relation to the following payments is not affected.
(a) the payment of an amount to the Commonwealth as required by
paragraph (3)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (3)(c).
The futures organisation must, in accordance with the regulations, notify
the Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(6) An amount payable by a futures organisation as required by
paragraph (3)(a) may be set off against an amount payable to the futures
organisation as required by paragraph (3)(c).
(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 1231,
the futures organisation concerned may determine that levy known as futures
organisation additional fidelity fund contribution is to be paid by specified
contributing members of the futures organisation. When such a determination is
made, the levy is payable to futures organisation, as agent for the Commonwealth
in accordance with this section.
Note: For the imposition and amount of the levy, see the
Corporations (Futures Organisations Levies) Act 2001.
(2) An amount of levy payable under subsection (1) must be paid
within the time and in the manner specified by the futures organisation either
generally or in relation to a particular case.
(3) If a levy is imposed by subsection 6(2) of the Corporations
(Futures Organisations Levies) Act 2001 on a person, the levy must be paid
by the time by which the levy under subsection 1235(1) of the old Corporations
Law referred to in that subsection was required to be paid.
(4) Whenever an amount of levy (the levy amount) is paid
under this section, or under subsection 6(2) of the Corporations (Futures
Organisations Levies) Act 2001, to a futures organisation as agent for the
Commonwealth:
(a) the futures organisation must pay an amount equal to the levy amount
to the Commonwealth; and
(b) the Consolidated Revenue Fund is appropriated by that amount for the
purpose of payment to the futures organisation; and
(c) the Commonwealth must pay the amount so appropriated to the futures
organisation; and
(d) the futures organisation must pay the amount it receives under
paragraph (c) into its fidelity fund.
(5) A payment of an amount to a futures organisation as required by
paragraph (4)(c) in respect of a particular levy amount is subject to a
condition that, if the Commonwealth becomes liable to refund the whole or a part
of the levy amount, the futures organisation must pay to the Commonwealth an
amount equal to the amount that the Commonwealth is liable to refund. The
futures organisation may pay, out of its fidelity fund, any amount so required
to be paid to the Commonwealth.
(6) The Financial Management and Accountability Act 1997 does not
apply in relation to the payment of an amount of levy under this section to a
futures organisation as agent for the Commonwealth. However, the operation of
that Act in relation to the following payments is not affected.
(a) the payment of an amount to the Commonwealth as required by
paragraph (4)(a); or
(b) the payment of an amount by the Commonwealth as required by
paragraph (4)(c).
The futures organisation must, in accordance with the regulations, notify
the Commonwealth of payments of levy it receives as agent for the
Commonwealth.
(7) An amount payable by a futures organisation as required by
paragraph (4)(a) may be set off against an amount payable to the futures
organisation as required by paragraph (4)(c).
(3) A futures organisation may determine in writing that subsection
1234(1) does not apply in relation to the futures organisation in relation to
specified persons.
(4) A futures organisation may determine in writing that subsection
1234(2) does not apply in relation to the futures organisation in relation to
specified contributing members of the futures organisation.
(5) A determination in force under subsection (3) or (4) has effect
accordingly.
(1) A futures organisation may, from its general funds, give or advance,
on such terms as the board of the futures organisation thinks fit, any sums of
money to its fidelity fund.
(2) Money that is advanced under subsection (1) may at any time be
repaid from the fidelity fund to the general funds of the futures
organisation.
Money in a fidelity fund of a futures organisation that is not
immediately required for the purposes of the fund may be invested by the futures
organisation in any manner in which trustees are for the time being authorised
by a law in force in a State or Territory in this jurisdiction to invest trust
funds or on deposit with an eligible money market dealer.
(1) Subject to this Part, where:
(a) a person (in this subsection called the futures person)
suffers pecuniary loss at a particular time because of a defalcation, or because
of fraudulent misuse of money or other property, by:
(i) a person who is at that time a contributing member of a futures
organisation; or
(ii) a director, partner, officer or employee of a person who is at that
time a contributing member of a futures organisation; or
(iii) a partner in, or employee of, a partnership that is at that time a
contributing member of a futures organisation; and
(b) the loss is suffered in respect of money or other property that was,
in connection with the contributing member’s dealings in futures contracts
(whether or not any of those dealings was effected on a futures market),
entrusted to or received by the contributing member, or a director, partner,
officer or employee of the contributing member (whether before or after the
commencement of this section):
(i) for or on behalf of the futures person or another person; or
(ii) because the contributing member was trustee of the money or other
property;
the fidelity fund of the futures organisation must be applied for the
purpose of compensating the futures person.
(2) The reference in paragraph (1)(b) to a partner of a contributing
member of a futures organisation is, in a case where the contributing member is
a partnership, a reference to a partner in the partnership.
(3) Subject to this Part, where a right to compensation does not arise
under subsection (1), a fidelity fund of a futures organisation may, if the
board of the futures organisation thinks fit, 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 the
official receiver or trustee, as the case may be, certifies is required in order
to make up or reduce the total deficiency arising because the available assets
of a bankrupt who is a contributing member of the futures organisation are
insufficient to satisfy the debts arising from dealings in futures contracts
that have been proved in the bankruptcy by creditors of the bankrupt.
(4) Subsection (3) applies in the case of a contributing member of a
futures organisation who has made a composition with the member’s
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 a contributing member of a futures organisation 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 is taken to be a
reference to a controlling trustee within the meaning of that Part;
and
(b) the reference to debts proved in the bankruptcy is taken to be a
reference to provable debts in relation to the composition or deed within the
meaning of that Part; and
(c) a reference to the bankrupt is taken to be a reference to the person
who made the composition or executed the deed.
(5) Subject to this Part, where a right to compensation does not arise
under subsection (1), a fidelity fund of a futures organisation may, if the
board of the futures organisation thinks fit, be applied for the purpose of
paying to the liquidator of a body corporate that is a contributing member of
the futures organisation and that has commenced to be wound up, an amount not
greater than the amount that the liquidator certifies is required to make up or
reduce the total deficiency arising because the available assets of the body
corporate are insufficient to satisfy the debts of the body corporate arising
from dealings in futures contracts that have been proved in the winding up by
creditors of the body corporate.
(6) Money paid pursuant to subsection (3) or (5) is so paid only on
condition that it is applied by the official receiver, trustee or liquidator
towards satisfaction of debts arising from dealings in futures contracts and for
no other purpose.
(7) Subject to subsection (9), the amount, or the sum of the amounts,
paid under this Part out of a fidelity fund of a futures organisation:
(a) for the purpose of compensating pecuniary loss as mentioned in
subsection (1); or
(b) for the purpose of making payments under subsection (3) or
(5);
must not exceed, in respect of a particular contributing member of the
futures organisation:
(c) unless paragraph (d) applies—$500,000; or
(d) if some other amount is prescribed, for the purposes of this
subsection, in relation to the futures organisation, a class of futures
organisations that includes the futures organisation, or futures organisations
generally—that amount.
(8) For the purposes of calculating the sum referred to in
subsection (7), an amount that is paid from a fidelity fund is, to the
extent to which that amount is repaid to the fund, to be disregarded.
(9) If a futures organisation considers, having regard to the ascertained
or contingent liabilities of its fidelity fund, that the assets of the fund so
permit, the futures organisation may apply out of the fund such sums in excess
of the amount limited by or under this section as the futures organisation, in
its discretion, thinks fit in or towards the compensation of persons who have
suffered pecuniary loss as mentioned in subsection (1) or making a payment
under subsection (3) or (5).
(10) Where:
(a) money or other property has been entrusted to, or received
by:
(i) a person or partnership; or
(ii) a director, partner, officer or employee of a person; or
(iii) a partner in or employee of, a partnership;
being a person who, or a partnership that, has at any time been but is no
longer a contributing member of a futures organisation; and
(b) immediately before that person or partnership last ceased to be a
member or member organisation of the futures organisation, he, she or it was a
contributing member of the futures organisation; and
(c) because of a defalcation, or the fraudulent misuse of money or other
property by:
(i) that person or a director, partner, officer or employee of that
person; or
(ii) a partner in, or employee of, that partnership;
as the case may be, the person by or from whom the money or other
property was so entrusted or received suffered pecuniary loss; and
(d) at the time when the money or other property was so entrusted or
received, the person suffering the pecuniary loss believed, on reasonable
grounds, that that person or partnership was at that time a member or member
organisation of the futures organisation;
that person or partnership is, for the purposes of this section (other than
this subsection and subsection (11)), taken to have been, when the
pecuniary loss was suffered, a contributing member of the futures
organisation.
(11) Where:
(a) a person who or a partnership that has at any time been, but is no
longer, a contributing member of a futures organisation has incurred a debt
arising from dealings in futures contracts; and
(b) at the time when the debt was incurred, the creditor, or one or more
of the creditors, in relation to the debt believed on reasonable grounds that
that person or partnership was at that time a member or member organisation of
the futures organisation;
a reference in this section (other than subsection (10) and this
subsection) to a contributing member of the futures organisation is, for the
purpose of determining the application of subsection (3) or (5) in relation
to that creditor or those creditors, as the case may be, in relation to that
debt, taken to include a reference to that person or partnership.
(12) A reference in this section to a defalcation, or to a fraudulent
misuse of money or other property, is a reference to a defalcation, or to such a
fraudulent misuse, wherever and whenever occurring.
(1) Subject to this Part, a person who suffers pecuniary loss as mentioned
in subsection 1239(1) is entitled to claim compensation from the fidelity fund
of a futures organisation whose fidelity fund is, pursuant to that subsection,
required to be applied to compensate the person, and to take proceedings in the
Court as provided in this Part against the futures organisation to establish
that claim.
(2) A person does not have a claim against a fidelity fund of a futures
organisation in respect of:
(a) pecuniary loss suffered before 1 July 1986; 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 organisation of the futures
organisation.
(3) Subject to this Part, the amount that a claimant is entitled to claim
as compensation from a fidelity fund of a futures organisation is the amount of
the actual pecuniary loss suffered by the claimant (including the reasonable
costs of, and disbursements incidental to, the making and proof of the claim)
less the total amount or value of all amounts or other benefits received or
receivable by the claimant 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 prescribed rate
calculated from and including the day on which the pecuniary loss was suffered
until the day on which the claim is satisfied.
(1) Where all persons who have submitted claims pursuant to
section 1240 have been fully compensated in accordance with the provisions
of this Part for pecuniary loss in relation to a contributing member of a
futures organisation, being pecuniary loss as mentioned in subsection 1239(1)
suffered in relation to money or other property, any partner of the contributing
member who has made payment to a person in compensation for loss suffered by the
person in relation to that money or property is taken to be subrogated to the
extent of that payment to all the rights and remedies of that person against the
fidelity fund of the futures organisation if the board of the futures
organisation, 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 of a contributing member of a futures organisation feels
aggrieved by the determination of a board under subsection (1), the partner
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 must, on the day on which the appellant lodges notice of
appeal with the Court, lodge a copy of the notice with the futures organisation
concerned.
(4) The Court must 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 the opinion having
regard to all the circumstances that the appellant was not a party to the
defalcation or fraudulent misuse of money or other property from which the
pecuniary loss arose and that the appellant acted honestly and reasonably in the
matter, it may order that the appellant, to the extent of any payment made by
the appellant, be subrogated to the rights and remedies, in relation to the
fidelity fund of the futures organisation concerned, of the person to whom the
appellant made such a payment.
(1) A futures organisation may cause to be published in a daily newspaper
circulating generally in each State and 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 futures
organisation in respect of a pecuniary loss must be made in writing to the
futures organisation:
(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 futures organisation
otherwise determines.
(3) A futures organisation, a member of a board of a futures organisation,
or a member or employee of a futures organisation, has qualified privilege in
respect of the publication of a notice under subsection (1).
(1) Subject to this Part, the board of a futures organisation may allow
and settle a proper claim for compensation from a fidelity fund of the futures
organisation at any time after the occurrence of the pecuniary loss in respect
of which the claim arose.
(2) Subject to subsection (3), a person must not commence proceedings
under this Part against a futures organisation without leave of the board
unless:
(a) the board has disallowed the person’s claim; and
(b) the claimant has exhausted all relevant rights of action and other
legal remedies for the recovery of the money or other property in respect of
which the pecuniary loss occurred, being rights and remedies that are available
against the member of the futures organisation 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, under
section 1240, against a person other than the futures
organisation.
(3) A person who has been refused leave by the board of a futures
organisation under subsection (2) may apply to the Court for leave to
commence proceedings against the futures organisation and the Court may make
such order in the matter as it thinks fit.
(4) The board of a futures organisation, after disallowing, whether wholly
or partly, a claim for compensation from the fidelity fund of the futures
organisation, must serve notice of the disallowance in the prescribed form on
the claimant or on the claimant’s solicitor.
(5) Proceedings against a futures organisation in respect of a claim that
has been disallowed by the board of the futures organisation must not be
commenced after the end 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
futures organisation.
(7) The board 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 board or the 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.
(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
must, 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 board 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.
The board of a futures organisation may at any time require a person to
produce and deliver any documents or statements of evidence necessary to support
a claim made or necessary for the purpose either of exercising its rights
against a contributing member of the futures organisation or a partner or the
partners in a partnership that is a contributing member of the futures
organisation 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 such documents or statements of evidence by the
first-mentioned person, the board may disallow any claim by the first-mentioned
person under this Part.
On payment out of a fidelity fund of a futures organisation of any money
in respect of a claim under this Part, the futures organisation is subrogated to
the extent of that payment to all the rights and remedies of the claimant in
relation to the loss suffered by the claimant from the defalcation or fraudulent
misuse of property.
Money or other property belonging to a futures organisation, other than
its fidelity fund, is not available for the payment of a claim under this Part,
whether the claim is allowed by the board of the futures organisation or is made
the subject of an order of the Court.
(1) Where the amount in a fidelity fund of a futures organisation 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 must, subject to subsection (2), be apportioned among
the claimants in such manner as the board of the futures organisation thinks
equitable, and such a claim so far as it then remains unpaid is taken to be
charged against future receipts of the fund and paid out of the fund when money
is 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 contributing member of
a futures organisation exceeds the total amount that may, pursuant to
section 1239, be paid under this Part in respect of that contributing
member, the total amount must be apportioned among the claimants in such manner
as the board 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 contributing member are
discharged.
(1) A futures organisation may enter into a contract with a person
carrying on fidelity insurance business whereby the futures organisation 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 contributing
members of the futures organisation generally, or in relation to particular
contributing members named in the contract, or in relation to contributing
members generally with the exclusion of particular contributing members named in
the contract.
(3) A futures organisation, a member or employee of a futures organisation
or of the board of a futures organisation, or a member of the management
sub-committee of the board of a futures organisation, has qualified privilege in
respect of the publication of a statement that a contract entered into under
this section does, or does not, as the case may be, apply in relation to that
member.
A claimant against a fidelity fund of a futures organisation 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 money paid by the insurer in accordance with such a
contract.
For the purposes of this Division, a futures contract concerns a body
corporate if, and only if:
(a) the futures contract is a commodity agreement and a commodity to which
it relates is securities of the body; or
(b) the futures contract is an adjustment agreement and a state of affairs
to which it relates concerns the price of securities of the body, or the prices
of a class of securities that includes securities of the body, at a particular
time.
(1) For the purposes of this Division, a person is connected with a body
corporate (in this subsection called the relevant body corporate)
if the person is a natural person and:
(a) is an officer of the relevant body corporate or of a related body
corporate; or
(b) has a substantial holding in the relevant body corporate or in a
related body corporate; or
(c) occupies a position that may reasonably be expected to give the person
access to information of a kind referred to in subsection 1253(1) or (2) by
virtue of:
(i) any professional or business relationship existing between the person
(or the person’s employer or a body corporate of which the person is an
officer) and the relevant body corporate or a related body corporate;
or
(ii) the person being an officer of a body corporate that has a
substantial holding in the relevant body corporate or in a related body
corporate.
(2) For the purposes of subsection (1), officer, in
relation to a body corporate, includes:
(a) a director, secretary, executive officer or employee of the body
corporate; and
(b) a receiver, or a receiver and manager, of property of the body
corporate; and
(c) an administrator of the body corporate; and
(ca) an administrator of a deed of company arrangement executed by the
body corporate; and
(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.
(1) For the purposes of this Part, a person is precluded on a particular
day from dealing in a futures contract concerning a body corporate if, by virtue
of being, or having been at any time during the 6 months ending on that day,
connected with the body, the person has inside information in relation to that
futures contract.
(2) For the purposes of this Part, a person is also precluded on a
particular day from dealing in a futures contract concerning a body corporate
if, by virtue of being, or having been at any time during the 6 months ending on
that day, connected with another body corporate, the person has information
that:
(a) is inside information in relation to that futures contract;
and
(b) relates to any transaction (actual or expected) involving both those
bodies, or involving one of them and securities of the other.
(3) For the purposes of this Part, a person is also precluded from dealing
in a futures contract if the person:
(a) has inside information in relation to the futures contract;
and
(b) obtained the information, directly or indirectly, from another person;
and
(c) is aware, or ought reasonably to be aware, of facts or circumstances
by virtue of which that other person is precluded by subsection (1) or (2)
from dealing in the futures contract; and
(d) when the information was so obtained:
(i) was an associate of the other person; or
(ii) had with the other person an arrangement for the communication of
information of a kind referred to in subsection (1) or (2) with a view to a
dealing, by the first-mentioned person, by the other person, or by both of them
together, in that futures contract or a futures contract of the same kind as
that futures contract.
(1) Without prejudice to subsection 1253(3), but subject to this section,
while an officer of a body corporate is precluded from dealing in a futures
contract, the body is, for the purposes of this Part, also precluded from
dealing in the futures contract.
(2) A body corporate is not, merely because of information that an officer
of the body has, precluded by subsection (1) from dealing at a particular
time in a futures contract if:
(a) the decision to deal in the futures contract at that time was taken on
the body’s behalf by a person other than the officer; and
(b) the body 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 that person by a person who had the information;
and
(c) the information was not so communicated and no such advice was so
given.
(3) A body corporate is not, merely because of information that an officer
of the body has, precluded by subsection (1) from dealing in a futures
contract concerning another body corporate if the information:
(a) was obtained by the officer in the course of performing duties as an
officer of the first-mentioned body; and
(b) relates only to a proposed dealing by the first-mentioned body in
securities of, or a futures contract concerning, the other body.
For the purposes of this Part, a person who holds a futures brokers
licence is not precluded from dealing in a futures contract concerning a body
corporate if:
(a) the licensee enters into the dealing as agent for another person
pursuant to a specific instruction by that other person to enter into that
dealing; and
(b) the licensee has not given any advice to the other person in relation
to dealing in a futures contract concerning the body corporate; and
(c) the other person is not, in relation to the dealing, an associate of
the licensee.
(1) A person must not, while precluded from dealing in a futures contract,
deal in that futures contract.
(2) A person who, because of having particular information, is precluded
from dealing in a futures contract, must not, while so precluded, communicate
the information to another person if the first-mentioned person knows, or ought
reasonably to know, that the other person will make use of the information for
the purpose of dealing in that futures contract.
Where a prosecution is begun against a person for an offence because the
person had particular information and dealt in a futures contract in
contravention of section 1256, it is a defence if it is proved that the
other party to the dealing knew, or ought reasonably to have known, the
information before entering into the dealing.
A futures broker must not deal in a futures contract on behalf of another
person unless the dealing is effected:
(a) on a futures market of a futures exchange or recognised futures
exchange; or
(b) on an exempt futures market; or
(c) as permitted by the business rules of a futures organisation of which
the broker is a member.
A person must not, in this jurisdiction or elsewhere, take part in, be
concerned in, or carry out, whether directly or indirectly:
(a) a transaction (whether a dealing in a futures contract or not) that
has, is intended to have, or is likely to have; or
(b) 2 or more transactions (whether any of them is a dealing in a futures
contract or not) that have, are intended to have, or are likely to
have:
the effect of:
(c) creating an artificial price for dealings in futures contracts on a
futures market in this jurisdiction; or
(d) maintaining at a level that is artificial (whether or not it was
previously artificial) a price for dealings in futures contracts on a futures
market in this jurisdiction.
(1) A person must not, in this jurisdiction or elsewhere, create, cause to
be created, or do anything that is calculated to create, a false or misleading
appearance:
(a) of active dealing in futures contracts on a futures market in this
jurisdiction; or
(b) with respect to the market for, or the price for dealings in, futures
contracts on a futures market in this jurisdiction.
(2) A person must not, in this jurisdiction or elsewhere, by any
fictitious or artificial transactions or devices, maintain, inflate, depress, or
cause fluctuations in, the price for dealings in futures contracts on a futures
market in this jurisdiction.
(3) In determining whether a transaction is fictitious or artificial for
the purposes of subsection (2), the fact that the transaction is, or was at
any time, intended by the parties who entered into it to have effect according
to its terms is not conclusive.
A person contravenes this section if the person:
(a) in this jurisdiction or elsewhere, makes a statement, or disseminates
information, that is false or misleading in a material particular and is
likely:
(i) to induce other persons to deal in futures contracts on a futures
market in this jurisdiction; or
(ii) to have the effect of raising, lowering, maintaining or stabilising
the price for dealings in futures contracts, or in a class of futures contracts,
on a futures market in this jurisdiction; and
(b) when making the statement, or disseminating the information:
(i) is recklessly indifferent as to whether the statement or information
is true or false; or
(ii) knows, or ought reasonably to know, that the statement is false or
misleading in a material particular.
(1) A person must not:
(a) by making or publishing any statement, promise or forecast that the
person 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 the person knows to be false or misleading in a
material particular;
induce or attempt to induce another person to deal in a futures contract or
a class of futures contracts.
(7) It is a defence to a prosecution for an offence under this section
constituted by recording or storing information as mentioned in
paragraph (1)(d) if it is proved that, when the defendant so recorded or
stored the information, the defendant had no reasonable grounds for expecting
that the information would be available to any person.
Where:
(a) in this jurisdiction or elsewhere, a person circulates or
disseminates, or authorises or is concerned in the circulation or dissemination
of, any statement or information to the effect that the price for dealings in
futures contracts, or in a class of futures contracts, on a futures market in
this jurisdiction will, or is likely to, rise or fall or be maintained because
of a transaction, or other act or thing done, in relation to such futures
contracts or futures contracts included in that class, being a transaction, or
other act or thing, that constitutes a contravention of section 1259, 1260,
1261 or 1262; and
(b) the person, or an associate of the person:
(i) has entered into such a transaction or done such an act or thing;
or
(ii) has received, or expects to receive, directly or indirectly, a
consideration or benefit for circulating or disseminating, or authorising or
being concerned in the circulation or dissemination of, the statement or
information;
the first-mentioned person contravenes this section.
Where, in connection with a dealing or proposed dealing in a futures
contract by a futures broker on behalf of a client of the broker, a person
who:
(a) is the broker or an employee or agent of the broker; or
(b) has an interest, or is otherwise concerned in, the dealing or proposed
dealing;
does any of the following:
(c) defrauds the client;
(d) does an act, or omits to do an act, knowing that the client will be
deceived or misled, or with reckless indifference as to whether or not the
client will be deceived or misled, as a result of the act or omission;
(e) (without limiting the generality of paragraph (d)) makes a
statement, promise or forecast to the client, or makes an entry in a record
relating to the client or persons including the client:
(i) knowing that the statement, promise, forecast or entry is false,
misleading or deceptive in a material particular; or
(ii) with reckless indifference as to whether or not the statement,
promise, forecast or entry is false, misleading or deceptive in a material
particular;
the person contravenes this section.
(1) Where:
(a) a person who, because of having particular information, is precluded
by section 1253 from dealing in a futures contract deals, in contravention
of section 1256, in that futures contract; or
(b) a person, being a body corporate, deals, in contravention of
section 1256, in a futures contract at a time when an officer of the body
is, because of having particular information, precluded from dealing in that
futures contract;
the person is liable (whether or not the person has been convicted of an
offence in respect of the contravention) to compensate any other party to the
dealing who did not have that information for any loss sustained by that party
because of any difference between the price at which the dealing took place and
the price at which it would be likely to have taken place if that information
had been generally available.
(2) A person who contravenes any of sections 1259 to 1264 (inclusive)
(whether or not the person has been convicted of an offence in respect of the
contravention) is liable to pay compensation to any other person who, in dealing
in futures contracts, suffers loss because of the difference between the price
at which the dealing takes place and the price at which it would be likely to
have taken place if the contravention had not occurred.
(3) The amount of compensation for which a person is liable under
subsection (1) or (2) 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
(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 Part 9.4B because of the same act or
transaction—the amount of that loss 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 compensation for a loss
is not maintainable after the end of the period of 2 years commencing on the day
of completion of the dealing in which the loss occurred.
(6) ASIC may, if it considers it to be in the public interest to do so,
bring an action in the name of, and for the benefit of, a person for recovery of
compensation for a loss referred to in subsection (1) and suffered by that
person.
(7) Nothing in subsection (1) affects any liability that a person may
incur under any other law.
(1) In this section, a reference to the transmission by a futures broker
of instructions to deal in a class of futures contracts is a
reference:
(a) where the broker has direct access to the futures market on which the
instructions are to be executed—to the transmission of the instructions to
that futures market; or
(b) where the broker has access to the futures market on which the
instructions are to be executed only through another futures broker—to the
transmission of the instructions to that other futures broker.
(2) Subject to subsection (3), a futures broker must transmit in the
sequence in which they are received by the broker all instructions to deal in a
class of futures contracts at or near the market price for a futures contract of
that class prevailing immediately before execution of the
instructions.
(3) Where a futures broker proposes to deal in a class of futures
contracts on the broker’s own account and the person by whom or on whose
instructions the instructions for the dealing are to be transmitted is aware of
instructions of a client of the broker to deal in that class of futures
contracts at or near the market price for a futures contract of that class
prevailing at that time (being instructions that have not been transmitted),
that person must not transmit, and must not give instructions to any other
person to transmit, the instructions to give effect to the proposal of the
broker to deal in that class of futures contracts before the instructions of the
client are transmitted.
(4) A futures broker, or a director, partner, officer or employee of a
futures broker, must not, except:
(a) to the extent necessary to execute the instructions concerned;
or
(b) as required by this Act or any other law; or
(c) as required by the business rules of a futures organisation of which
the broker is a member;
disclose to any other futures broker, or to a person engaged or employed in
the business of the first-mentioned broker or of any other futures broker,
instructions of a client to deal in a class of futures contracts.
(5) A member of a futures exchange who is concerned in the execution, on a
trading floor of the futures exchange, of instructions to deal in futures
contracts must execute in the order in which they are received by the member all
instructions to deal in a class of futures contracts at or near the market price
for a futures contract of that class prevailing immediately before execution of
the instructions.
(6) Where:
(a) during a particular period, a futures broker transmits instructions
(whether or not those instructions consist of, or include, instructions giving
effect to a proposal of the broker to deal in the class of contracts concerned
on the broker’s own account) to deal in a class of futures contracts at or
near the market price for a futures contract of that class prevailing
immediately before execution of the instructions; and
(b) dealings in that class of futures contracts are effected pursuant to
those instructions;
the broker must, except so far as the business rules of a futures
organisation of which the broker is a member otherwise provide, allocate the
dealings to those instructions:
(c) in the sequence in which the dealings were effected; and
(d) in the sequence in which the broker transmitted those
instructions.
(7) A futures broker must maintain, in accordance with the regulations,
records that set out the prescribed particulars of:
(a) instructions by a client to deal in futures contracts; and
(b) the date and time of receipt, transmission and execution of those
instructions; and
(c) the person by whom those instructions are received, the person by whom
they are transmitted and the person by whom they are executed; and
(d) the date and time of receipt, transmission and execution of
instructions to deal in futures contracts on the broker’s own account;
and
(e) the person by whom instructions of the kind referred to in
paragraph (d) are received, the person by whom they are transmitted and the
person by whom they are executed;
and must retain those records for the prescribed period.
(8) Where:
(a) a futures broker transmits for execution on a futures market outside
Australia and the external Territories instructions to deal in futures
contracts; and
(b) it is not reasonably practicable for the broker to set out in the
records maintained by the broker pursuant to subsection (7) the prescribed
particulars of the date and time of execution of those instructions;
the broker must so set out those particulars as precisely as is reasonably
practicable.
(1) A person who is a futures broker or a futures adviser and an employee
of that person must not, as principals, jointly deal in, or agree to deal in,
futures contracts.
(2) A person who is a partner in a partnership that carries on a business
of dealing in futures contracts and an employee of the partnership must not, as
principals, jointly deal in, or agree to deal in, futures contracts.
(3) A person who is a partner in a partnership that carries on a futures
advice business and an employee of the partnership must not, as principals,
jointly deal in, or agree to deal in, futures contracts.
(4) A person who is a futures broker or a futures adviser must 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 deal in futures contracts; or
(b) the person giving the credit knows or has reason to believe that the
credit will be used for the purpose of dealing in futures contracts.
(5) A person who is a partner in a partnership that carries on a business
of dealing in futures contracts must 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 deal in futures contracts; or
(b) the person giving the credit knows or has reason to believe that the
credit will be used for the purpose of dealing in futures contracts.
(6) A person who is a partner in a partnership that carries on a futures
advice business must 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 deal in futures contracts; or
(b) the person giving the credit knows or has reason to believe that the
credit will be used for the purpose of dealing in futures contracts.
(7) A person who is an employee of a member organisation of a futures
exchange in connection with a business of dealing in futures contracts carried
on by the member organisation must not, as principal, deal, or agree to deal, in
futures contracts unless the member organisation acts as the agent of the person
in respect of the transaction.
(8) A reference in subsection (1) or (4) to an employee of a person
who is a futures broker or a futures adviser includes, in the case of a body
corporate that is a futures broker or a futures adviser, a reference to an
officer of the body corporate.
(9) The reference in subsection (7) to an employee of a member
organisation of a futures exchange includes:
(a) in the case of a member organisation that is a body corporate;
and
(b) in the case of a member organisation that is a partnership in which a
partner is a body corporate;
a reference to an officer of the body corporate.
(10) A reference in this section to an employee of a futures broker, a
futures adviser, a partnership or a member organisation of a futures exchange
includes a reference to a person who, pursuant to a subsisting agreement,
performs services for the futures broker, futures adviser, partnership or member
organisation in connection with dealings in futures contracts by the futures
broker, futures adviser, partnership or member organisation.
(1) Where:
(a) on the application of ASIC, it appears to the Court that a
person:
(i) has contravened this Chapter, or any other law of a State or Territory
in this jurisdiction relating to dealing in futures contracts; or
(ii) has contravened the conditions of a licence, the business rules of a
futures exchange, a clearing house or a futures association; or
(iii) is about to do an act with respect to dealing in futures contracts
that, if done, would be such a contravention; or
(b) on the application of a futures exchange, clearing house or futures
association, it appears to the Court that a person has contravened the business
rules of the futures exchange, clearing house or futures association, as the
case may be;
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:
(c) in the case of persistent or continuing breaches of this Chapter, or
of a law of a State or Territory in this jurisdiction relating to dealing in
futures contracts, or the conditions or restrictions of a licence, or of the
business rules of a futures exchange, clearing house or futures
association—an order restraining a person from carrying on a business of
dealing in futures contracts, acting as a futures adviser, holding himself,
herself or itself out as so carrying on business or so acting, or from doing an
act as a representative of a futures broker or of a futures adviser;
(d) an order restraining a person from acquiring, disposing of or
otherwise dealing in any class of futures contracts that is specified in the
order;
(e) an order appointing a receiver of property of a futures broker or of
property that is held by a futures broker for or on behalf of another person,
whether as trustee or otherwise;
(f) an order declaring a futures contract 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 paragraphs.
(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 ASIC makes an application to the Court for the making of an
order under subsection (1), the Court must not require ASIC or any other
person, as a condition of granting an interim order under subsection (2),
to give any undertaking as to damages.
(4) The Court must not make an order under subsection (1) if it is
satisfied that the order would unfairly prejudice a person.
(5) 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.
(6) A person appointed by order of the Court under subsection (1) as
a receiver of property of a futures broker:
(a) may require the broker to deliver to the person any property of which
the person has been appointed receiver or to give to the person all information
concerning that property that may reasonably be required; and
(b) may acquire and take possession of any property of which the person
has been appointed receiver; and
(c) may deal with any property that the person has acquired or of which
the person has taken possession in any manner in which the broker 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.
(7) In paragraph (1)(e) and subsection (6),
property, in relation to a futures broker, includes money or other
property entrusted to or received on behalf of any other person by the broker or
another person in the course of or in connection with a business of dealing in
futures contracts carried on by the futures broker.
(8) A person must not, without reasonable excuse, contravene:
(a) an order under this section that is applicable to the person;
or
(b) a requirement of a receiver appointed by order of the Court under
subsection (1).
(9) The Court may rescind, vary or discharge an order made by it under
this section or suspend the operation of such an order.
(1) A person who is not the holder of a futures brokers licence must not
take or use, or by inference adopt, the name or title of futures broker, 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 person is a
futures broker.
(2) A person who is not the holder of a futures brokers licence must
not:
(a) take or use, or by inference adopt; or
(b) have attached to, or exhibited at, any place;
a name, title or description implying, or tending to create the belief,
that the person is the holder of a futures brokers licence.
(3) A body corporate that is not:
(a) a futures exchange; or
(b) a recognised futures exchange;
must not take or use, or by inference adopt, the name or title of futures
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 is:
(c) a futures exchange; or
(d) a recognised futures exchange.
(4) A body corporate that is not a futures association must not take or
use, or by inference adopt, the name or title of futures association, 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 is a
futures association.
(1) A person who is required by a provision of this Act to maintain, make
or keep a register or a financial or other record in relation to a business
carried on by the person must preserve that register or record for the
prescribed period, whether or not the person ceases to carry on that business
before the end 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 a financial 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 a financial record, the 7 years after the transactions
covered by the record are completed.
(3) Subsections (1) and (2) do not apply in relation to a contract
note or copy of a contract note received or issued by a futures broker who is a
member of a futures exchange if the matters required by subsection 1206(4), (5)
or (6), as the case requires, to be included in the contract note are
recorded:
(a) by the futures exchange; or
(b) subject to such conditions (if any) as ASIC imposes, by the
broker;
in a manner approved by ASIC and the record of those matters is retained
for not less than 5 years.
(4) ASIC 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 ASIC under or for the purposes of this Act and that has
been in the possession of ASIC 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.
(1) A person who:
(a) in any case—conceals, destroys, mutilates or alters a book
relating to the business carried on by a futures broker or required under this
Act to be kept by the holder of a licence; or
(b) sends or takes, or causes the sending or taking of, the book out of
this jurisdiction or out of Australia;
contravenes this subsection.
(2) In a prosecution of a person for an offence under subsection (1),
it is a defence if it is established that the person did not act with intent to
defraud, to defeat the purposes of this Act or the ASIC 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 or the ASIC Act.
(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 1270 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 the person knows
to be false or misleading in a material particular; or
(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;
contravenes this subsection.
(2) In a prosecution of a person for an offence under subsection (1),
it is a defence if it is established that the person acted honestly and that in
all the circumstances the act or omission constituting the offence should be
excused.
A person required by this Chapter to keep a book or record must take
reasonable precautions for guarding against falsification of the book or record
and for facilitating discovery of any falsification.
(1) ASIC must, subject to this Act, keep such registers as it considers
necessary in such form as it thinks fit.
(2) A person may:
(a) inspect any document lodged with ASIC, not being:
(iaa) a notice lodged under subsection 205D(3); or
(i) an application under section 1279; or
(ia) a document lodged under a provision of Chapter 7 (other than
subsection 776(2B), section 1001B or Part 7.13) or Chapter 8;
or
(ii) a document lodged under section 1287 or 1288; or
(iii) a document lodged under paragraph 1296(2)(b); or
(iv) a report made or lodged under section 422, 438D, 452 or 533;
or
(v) a document that has been destroyed or otherwise disposed of;
or
(b) require a certificate of the registration of a company or any other
certificate authorised by this Act to be given by ASIC; or
(c) require a copy of or extract from any document that the person is
entitled to inspect pursuant to paragraph (a) or any certificate referred
to in paragraph (b) to be given, or given and certified, by ASIC.
(2A) For the purposes of subsection (2), a document given to ASIC
under subsection 776(2B) is taken to be a document lodged with ASIC.
(3) If a reproduction or transparency of a document or certificate is
produced for inspection, a person is not entitled pursuant to
paragraph (2)(a) to require the production of the original of that document
or certificate.
(4) The reference in paragraph (2)(c) to a document or certificate
includes, where a reproduction or transparency of that document or certificate
has been incorporated with a register kept by ASIC, a reference to that
reproduction or transparency and, where such a reproduction or transparency has
been so incorporated, a person is not entitled pursuant to that paragraph to a
copy of or extract from the original of that document or certificate.
(4A) A person is not entitled under paragraph (2)(a) to require the
production of the original of a document or certificate if ASIC keeps by means
of a mechanical, electronic or other device a record of information set out in
the document or certificate and:
(a) ASIC produces to the person for inspection a writing that sets out
what purports to be the contents of the document or certificate; or
(b) ASIC causes to be displayed for the person what purports to be the
contents of the document or certificate and, as at the time of the displaying,
the person has not asked for the production of a writing of the kind referred to
in paragraph (a).
(4B) Where:
(a) a person makes under paragraph (2)(c) a requirement that relates
to a document or certificate; and
(b) ASIC keeps by means of a mechanical, electronic or other device a
record of information set out in the document or certificate; and
(c) pursuant to that requirement, ASIC gives a writing or document that
sets out what purports to be the contents of:
(i) the whole of the document or certificate; or
(ii) a part of the document or certificate;
then, for the purposes of that paragraph, ASIC is taken to have given,
pursuant to that requirement:
(d) if subparagraph (c)(i) applies—a copy of the document or
certificate; or
(e) if subparagraph (c)(ii) applies—an extract from the
document or certificate setting out that part of it.
(4C) Where:
(a) the requirement referred to in paragraph (4B)(a) includes a
requirement that the copy or extract be certified; and
(b) pursuant to that requirement, ASIC gives a writing or document as
mentioned in paragraph (4B)(c);
then:
(c) ASIC may certify that the writing or document sets out the contents of
the whole or part of the document or certificate, as the case requires;
and
(d) the writing or document is, in a proceeding in a court, admissible as
prima facie evidence of the information contained in it.
(5) A copy of or extract from any document lodged with ASIC, and certified
by ASIC, is, in any proceeding, admissible in evidence as of equal validity with
the original document.
(6) The reference in subsection (5) to a document includes, where a
reproduction or transparency of that document has been incorporated with a
register kept by ASIC, a reference to that reproduction or
transparency.
(7) In any proceeding:
(a) a certificate by ASIC that, at a date or during a period specified in
the certificate, no company was registered under this Act by a name specified in
the certificate is to be received as prima facie evidence that at that
date or during that period, as the case may be, no company was registered by
that name under this Act; and
(b) a certificate by ASIC that a requirement of this Act specified in the
certificate:
(i) had or had not been complied with at a date or within a period
specified in the certificate; or
(ii) had been complied with at a date specified in the certificate but not
before that date;
is to be received as prima facie evidence of matters specified in
the certificate; and
(c) a certificate by ASIC that, during a period specified in the
certificate, a particular company was registered, or taken to be registered,
under this Act is to be received as prima facie evidence that, during that
period, that company was registered under this Act.
(7A) A certificate issued by ASIC stating that a company has been
registered under this Act is conclusive evidence that:
(a) all requirements of this Act for its registration have been complied
with; and
(b) the company was duly registered as a company under this Act on the
date specified in the certificate.
(8) If ASIC is of opinion that a document submitted for
lodgment:
(a) contains matter contrary to law; or
(b) contains matter that, in a material particular, is false or misleading
in the form or context in which it is included; or
(c) because of an omission or misdescription has not been duly completed;
or
(d) contravenes this Act; or
(e) contains an error, alteration or erasure;
ASIC may refuse to register or receive the document and may
request:
(f) that the document be appropriately amended or completed and
resubmitted; or
(g) that a fresh document be submitted in its place; or
(h) where the document has not been duly completed, that a supplementary
document in the prescribed form be lodged.
(9) ASIC may require a person who submits a document for lodgment to
produce to ASIC such other document, or to give to ASIC such information, as
ASIC thinks necessary in order to form an opinion whether it may refuse to
receive or register the first-mentioned document.
(10) ASIC may, if in the opinion of ASIC it is no longer necessary or
desirable to retain them, destroy or dispose of:
(a) in relation to a body corporate:
(i) any return of allotment of shares for cash that has been lodged for
not less than 2 years; or
(ii) any annual return or balance-sheet that has been lodged for not less
than 7 years or any document creating or evidencing a charge, or the complete or
partial satisfaction of a charge, where a memorandum of satisfaction of the
charge has been registered for not less than 7 years; or
(iii) any other document (other than the constitution or any other
document affecting it) that has been lodged or registered for not less than 15
years; or
(c) any document a transparency of which has been incorporated with a
register kept by ASIC.
(11) If a body corporate or other person, having made default in complying
with:
(a) any provision of this Act or of any other law that requires the
lodging in any manner of any return, account or other document or the giving of
notice to ASIC of any matter; or
(b) any request of ASIC to amend or complete and resubmit any document or
to submit a fresh document;
fails to make good the default within 14 days after the service on the body
or person of a notice requiring it to be done, a court may, on an application by
any member or creditor of the body or by ASIC, make an order directing the body
or any officer of the body or the person to make good the default within such
time as is specified in the order.
(12) Any such order may provide that all costs of and incidental to the
application are to be borne by the body or by any officers of the body
responsible for the default or by the person.
(13) A person must not contravene an order made under
subsection (11).
(14) Nothing in this section prejudices the operation of any law imposing
penalties on a body corporate or its officers or on another person in respect of
a default mentioned in subsection (11).
(15) Where information about a person is included on a register kept by
ASIC, ASIC may at any time, in writing, require that person to give ASIC
specified information about the person, being information of the kind included
on that register.
(16) The person must provide the information within such reasonable
period, and in such form, as are specified by ASIC.
(1) ASIC must keep a register of persons who have been disqualified from
managing corporations under Part 2D.6 or under any previous law of a State
or Territory.
(2) The register must contain a copy of:
(b) every notice that was served under section 206F; or
(c) every order lodged under section 206G.
(3) Subsections 1274(2) and (5) apply to a copy of an order or notice as
if that copy were a document lodged with ASIC.
(1) In this section:
data processor means a mechanical, electronic or other device
for the processing of data.
register means a register kept by ASIC under this
Act.
search includes inspect.
(2) ASIC may permit a person to search, otherwise than by using a data
processor, a prescribed register.
(3) ASIC may permit a person to search a prescribed register by using a
data processor in order to obtain prescribed information from the
register.
(4) ASIC may make available to a person prescribed information (in the
form of a document or otherwise) that ASIC has obtained from a prescribed
register by using a data processor.
(5) Nothing in this section limits:
(a) a power or function that ASIC has apart from this section;
or
(b) a right that a person has apart from this section.
(1) In this section:
data processor means a mechanical, electronic or other device
for processing data.
(2) In a proceeding in a court, a writing that purports to have been
prepared by ASIC is admissible as prima facie evidence of the matters stated in
so much of the writing as sets out what purports to be information obtained by
ASIC, by using a data processor, from the national database. In other words, the
writing is proof of such a matter in the absence of evidence to the
contrary.
(3) A writing need not bear a certificate or signature in order to be
taken to purport to have been prepared by ASIC.
(4) Nothing in this section limits, or is limited by, section 1274 or
1274A.
ASIC may certify that a person was a director or secretary of a company
at a particular time or during a particular period. In the absence of evidence
to the contrary, a certificate is proof of the matters stated in it.
Note: See section 1274B for the evidentiary status of
documents prepared by ASIC from the national database.
(1) Where a document forming part of the constitution of, or any other
document relating to, a body corporate has, since being lodged, been lost or
destroyed, a person may apply to ASIC for leave to lodge a copy of the document
as originally lodged.
(2) Where such an application is made, ASIC may direct that notice of the
application be given to such persons and in such manner as it thinks
fit.
(3) Whether or not an application has been made to ASIC under
subsection (1), ASIC, upon being satisfied:
(a) that an original document has been lost or destroyed; and
(b) of the date of the lodging of that document; and
(c) that a copy of that document produced to ASIC is a correct
copy;
may certify upon the copy that it is so satisfied and grant leave for the
copy to be lodged in the manner required by law in respect of the
original.
(4) Upon the lodgment the copy has, and is taken to have had from such
date as is mentioned in the certificate as the date of the lodging of the
original, the same force and effect for all purposes as the original.
(5) A decision of the Tribunal varying or setting aside a decision of ASIC
to certify and grant leave under subsection (3) may be lodged with ASIC and
is to be registered by it, but no payments, contracts, dealings, acts or things
made, had or done in good faith before the registration of the Tribunal’s
decision and upon the faith of and in reliance upon the certificate are to be
invalidated or affected by the Tribunal’s decision.
(6) Where a transparency of a document referred to in subsection (1)
has been incorporated with a register kept by ASIC and is lost or destroyed as
referred to in that subsection, this section applies as if the document of which
it is a transparency had been so lost or destroyed.
In this Part, unless the contrary intention appears:
body corporate includes a Part 5.7 body.
decision, in relation to the Board, means, in
Division 3, a decision of the Board under that Division and includes a
refusal to exercise a power under section 1292.
registered means registered under
Division 2.
(1) A natural person may make an application to ASIC:
(a) for registration as an auditor; or
(b) for registration as a liquidator; or
(c) for registration as a liquidator of a specified body corporate, being
a body corporate that is to be wound up under this Act.
(2) An application under this section must be made in writing as
prescribed and must contain such information as is prescribed.
(2) Subject to this section, where an application for registration as an
auditor is made under section 1279, ASIC must grant the application and
register the applicant as an auditor if:
(a) the applicant:
(i) is a member of the Institute of Chartered Accountants in Australia,
the Australian Society of Certified Practising Accountants or any other
prescribed body; or
(ii) holds a degree, diploma or certificate from a prescribed university
or another prescribed institution in Australia and has passed examinations in
such subjects, under whatever name, as the appropriate authority of the
university or other institution certifies to ASIC to represent a course of study
in accountancy (including auditing) of not less than 3 years duration and in
commercial law (including company law) of not less than 2 years duration;
or
(iii) has other qualifications and experience that, in the opinion of
ASIC, are equivalent to the qualifications mentioned in subparagraph (i) or
(ii); and
(b) ASIC is satisfied that the applicant has had such practical experience
in auditing as is prescribed; and
(c) ASIC is satisfied that the applicant is capable of performing the
duties of an auditor and is otherwise a fit and proper person to be registered
as an auditor;
but otherwise ASIC must refuse the application.
(3) ASIC must not register as an auditor a person who is disqualified from
managing corporations under Part 2D.6.
(4) Subject to subsection (8), ASIC may refuse to register as an
auditor a person who is not resident in Australia.
(5) Where ASIC grants an application by a person for registration as an
auditor, ASIC must cause to be issued to the person a certificate by ASIC
stating that the person has been registered as an auditor and specifying the day
on which the application was granted.
(7) A registration under this section is taken to have taken effect at the
beginning of the day specified in the certificate as the day on which the
application for registration was granted and remains in force until:
(a) the registration is cancelled by ASIC or the Board; or
(b) the person who is registered dies.
(8) ASIC must not refuse to register a person as an auditor unless ASIC
has given the person an opportunity to appear at a hearing before ASIC and to
make submissions and give evidence to ASIC in relation to the matter.
(9) Where ASIC refuses an application by a person for registration as an
auditor, ASIC must, not later than 14 days after the decision, give to the
person a notice in writing setting out the decision and the reasons for
it.
A person who holds office as, or is for the time being exercising the
powers and performing the duties of:
(a) the Auditor-General; or
(b) the Auditor-General of a State or Territory in this
jurisdiction;
is taken, despite any other provision of this Part, to be registered as an
auditor.
(2) Subject to this section, where an application for registration as a
liquidator is made under section 1279, ASIC must grant the application
if:
(a) the applicant:
(i) is a member of The Institute of Chartered Accountants in Australia,
the Australian Society of Certified Practising Accountants or any other
prescribed body; or
(ii) holds a degree, diploma or certificate from a prescribed university
or another prescribed institution in Australia and has passed examinations in
such subjects, under whatever name, as the appropriate authority of the
university or other institution certifies to ASIC to represent a course of study
in accountancy of not less than 3 years duration and in commercial law
(including company law) of not less than 2 years duration; or
(iii) has other qualifications and experience that, in the opinion of
ASIC, are equivalent to the qualifications mentioned in subparagraph (i) or
(ii); and
(b) ASIC is satisfied as to the experience of the applicant in connection
with the winding up of bodies corporate; and
(c) ASIC is satisfied that the applicant is capable of performing the
duties of a liquidator and is otherwise a fit and proper person to be registered
as a liquidator;
but otherwise ASIC must refuse the application.
(3) Where an application for registration as a liquidator of a specified
body corporate is made under section 1279, ASIC must grant the application
and register the applicant as a liquidator of that body if ASIC is satisfied
that the applicant has sufficient experience and ability, and is a fit and
proper person, to act as liquidator of the body, having regard to the nature of
the property or business of the body and the interests of its creditors and
contributories, but otherwise ASIC must refuse the application.
(4) ASIC must not register as a liquidator, or as a liquidator of a
specified body corporate, a person who is disqualified from managing
corporations under Part 2D.6.
(5) Subject to subsection (10), ASIC may refuse to register as a
liquidator or as a liquidator of a specified body corporate a person who is not
resident in Australia.
(6) Where:
(a) ASIC grants an application by a person for registration as a
liquidator or as a liquidator of a specified body corporate; and
(b) the person has complied with the requirements of
section 1284;
ASIC must cause to be issued to the person a certificate by ASIC:
(c) stating that the person has been registered as a liquidator or as a
liquidator of a specified body corporate; and
(d) specifying a day as the day of the beginning of the registration,
being:
(i) the day on which ASIC granted the application; or
(ii) the day on which the person complied with the requirements of
section 1284;
whichever was the later; and
(e) in the case of a person who is registered under subsection (3) as
a liquidator of a specified body corporate—setting out the name of that
body.
(8) The registration of a person as a liquidator under subsection (2)
comes into force at the beginning of the day specified in the certificate as the
day of the beginning of the registration and remains in force until:
(a) the registration is cancelled by ASIC or by the Board; or
(b) the person dies.
(9) The registration of a person as a liquidator of a specified body
corporate under subsection (3) comes into force at the beginning of the day
specified in the certificate as the day of the beginning of the registration and
remains in force until:
(a) the registration is cancelled by ASIC or by the Board; or
(b) the person dies; or
(c) the body corporate is dissolved or deregistered.
(10) ASIC must not refuse to register a person as a liquidator, or as a
liquidator of a specified body corporate, unless ASIC has given the person an
opportunity to appear at a hearing before ASIC and to make submissions and give
evidence to ASIC in relation to the matter.
(11) Where ASIC refuses an application by a person for registration as a
liquidator, or as a liquidator of a specified body corporate, ASIC must, not
later than 14 days after the decision, give to the person notice in writing
setting out the decision and the reasons for it.
(1) ASIC may register as an official liquidator a natural person who is a
registered liquidator.
(2) A person who is registered as an official liquidator is entitled, upon
request, to be issued with a certificate of his or her registration.
(3) ASIC may register under subsection (1) as official liquidators as
many registered liquidators as it thinks fit.
(1) Where ASIC grants an application by a person for registration as a
liquidator or as a liquidator of a specified body corporate, the person must
lodge and maintain with ASIC a security for the due performance of his or her
duties as such a liquidator in such form and for such amount as is, from time to
time, determined by ASIC in relation to that liquidator and with such surety or
sureties (if any) as ASIC, from time to time, requires.
(2) Where a security is lodged in accordance with subsection (1), the
security may be applied by ASIC in such circumstances, for such purposes and in
such manner as is prescribed.
(3) The regulations may make provision in relation to:
(a) the discharge in whole or part by ASIC of securities lodged under this
section; and
(b) the release by ASIC of sureties referred to in subsection (1)
from all or any of their obligations as such sureties.
(1) ASIC must cause a Register of Auditors to be kept for the purposes of
this Act and must cause to be entered in the Register in relation to a person
who is registered as an auditor:
(a) the name of the person; and
(b) the day on which the application by that person for registration as an
auditor was granted; and
(c) the address of the principal place where the person practises as an
auditor and the address of the other places (if any) at which he or she so
practises; and
(d) if the person practises as an auditor as a member of a firm or under a
name or style other than his or her own name—the name of that firm or the
name or style under which he or she so practises; and
(e) particulars of any suspension of the person’s registration,
under Division 2, as an auditor and of any action taken in respect of the
person under paragraph 1292(9)(a), (b) or (c);
and may cause to be entered in the Register in relation to a person who is
registered as an auditor such other particulars as ASIC considers
appropriate.
(2) Where a person ceases to be registered as an auditor, ASIC must cause
to be removed from the Register of Auditors the name of the person and any other
particulars entered in the Register in relation to that person.
(3) A person may inspect and make copies of, or take extracts from, the
Register of Auditors.
(1) ASIC must cause a Register of Liquidators to be kept for the purposes
of this Act and must cause to be entered in the Register:
(a) in relation to a person who is registered as a liquidator:
(i) the name of the person; and
(ii) the day of the beginning of the registration of that person as a
liquidator; and
(iii) the address of the principal place where the person practises as a
liquidator and the addresses of the other places (if any) at which he or she so
practises; and
(iv) if the person practises as a liquidator as a member of a firm or
under a name or style other than his or her own name—the name of that firm
or the name or style under which he or she so practises; and
(v) particulars of any suspension of the registration of the person as a
liquidator or as a liquidator of a specified body corporate, and of any action
taken in respect of the person under paragraph 1292(9)(a), (b) or (c);
and
(b) in relation to a person who is registered as a liquidator of a
specified body corporate:
(i) the name of the person; and
(ii) the name of the body corporate; and
(iii) the day of commencement of the registration of the person as a
liquidator of the body corporate; and
(iv) the address of the principal place where the person proposes to
perform his or her functions as the liquidator of the body corporate;
and
(v) if the person practises a profession as a member of a firm or under a
name or style other than his or her own name, being a profession by virtue of
which he or she is qualified to be appointed as a liquidator of the body
corporate—the name and address of that firm or the name or style under
which he or she so practises; and
(vi) particulars of any suspension or deemed suspension of the
registration of the person as a liquidator of that body corporate or as a
liquidator of a specified body corporate, and of any action taken in respect of
the person under paragraph 1292(9)(a), (b) or (c);
and may cause to be entered in the Register in relation to a person who is
registered as a liquidator, or as a liquidator of a specified body corporate,
such other particulars as ASIC considers appropriate.
(2) ASIC must cause a Register of Official Liquidators to be kept for the
purposes of this Act and must cause to be entered in the Register the name, and
such other particulars as ASIC considers appropriate, of any person registered
as an official liquidator.
(3) Where a person ceases to be registered as a liquidator, as a
liquidator of a specified body corporate or as an official liquidator, ASIC must
cause to be removed from the Register of Liquidators or from the Register of
Official Liquidators, as the case may be, the name of the person and any other
particulars entered in that Register in relation to that person.
(4) A person may inspect and make copies of, or take extracts from, the
Register of Liquidators or the Register of Official Liquidators.
(1) Where:
(a) a person who is a registered company auditor ceases to practise as an
auditor; or
(b) a change occurs in any matter particulars of which are required by
paragraph 1285(1)(a), (c) or (d) to be entered in the Register of Auditors in
relation to a person who is a registered company auditor;
the person must, not later than 21 days after the occurrence of the event
concerned, lodge, in the prescribed form, particulars in writing of that
event.
(2) Where:
(a) a person who is a registered liquidator ceases to practise as a
liquidator; or
(b) a change occurs in any matter particulars of which are required by
subparagraph 1286(1)(a)(i), (iii) or (iv) to be entered in the Register of
Liquidators in relation to a person who is a registered liquidator;
the person must, not later than 21 days after the occurrence of the event
concerned, lodge, in the prescribed form, particulars in writing of that
event.
(3) Where:
(a) a person who is registered as a liquidator of a specified body
corporate ceases to act as a liquidator in the winding up of that body;
or
(b) a change occurs in any matter particulars of which are required by
subparagraph 1286(1)(b)(i), (ii), (iv) or (v) to be entered in the Register of
Liquidators in relation to a person who is registered as a liquidator of a
specified body corporate;
the person must, not later than 21 days after the occurrence of the event
concerned, lodge, in the prescribed form, particulars in writing of that
event.
(4) If a person who is registered as an auditor, as a liquidator or as a
liquidator of a specified corporate body is disqualified from managing
corporations under Part 2D.6, then, within a period of 3 days after they
become disqualified, they must lodge written particulars in the prescribed form
of the circumstances because of which they become disqualified.
(3) A person who is a registered company auditor or registered liquidator
must, within one month after the end of:
(a) the period of 3 years beginning on the day on which the person’s
registration begins; and
(b) each subsequent period of 3 years;
lodge a statement in respect of that period of 3 years setting out such
information as is prescribed.
(4) ASIC may, on the application of a registered company auditor or a
registered liquidator made before the end of the period for lodging a statement
under subsection (3), extend, or further extend, that period.
(5) ASIC may, by notice in writing served on the person, require a person
who is registered as a liquidator of a specified body corporate to lodge, within
a period specified in the notice, a statement in respect of a period specified
in the notice setting out such information as is prescribed.
(1) An auditor has qualified privilege in respect of:
(a) any statement that he or she makes, orally or in writing, in the
course of his or her duties as auditor; or
(b) any statement that he or she makes, orally or in writing, on a
directors’ report under section 298 or 306 or on any statement,
report or other document that is taken, for any purpose, to be part of the
first-mentioned report; or
(c) notifying ASIC of a matter under section 311.
(2) A person has qualified privilege in respect of:
(a) the publishing of any document prepared by an auditor in the course of
his or her duties and required by or under this Act to be lodged, whether or not
the document has been lodged; or
(b) the publishing of any statement made by an auditor as mentioned in
subsection (1).
(1) Where a person who is registered as an auditor, as a liquidator, as a
liquidator of a specified body corporate or as an official liquidator requests
ASIC to cancel his or her registration, ASIC may cancel the registration of that
person as an auditor, as a liquidator, as a liquidator of that body corporate or
as an official liquidator, as the case may be.
(2) A decision of ASIC under subsection (1) to cancel the
registration of a person as an auditor, as a liquidator, as a liquidator of a
specified body corporate or as an official liquidator comes into effect as soon
as practicable upon the making of the decision.
(1) ASIC may, at any time, cancel, or suspend for a specified period, the
registration as an official liquidator of a person who is so
registered.
(2) ASIC may, at any time, require a person registered as an official
liquidator to give an undertaking to refrain from engaging in specified conduct
except on specified conditions.
(3) Where ASIC decides to exercise a power under subsection (1) or
(2), ASIC must, not later than 14 days after the decision, give to the person a
notice in writing setting out the decision and the reasons for it, but the
validity of the decision is not affected by failure of ASIC to do so.
(4) A decision of ASIC under subsection (1) to cancel or suspend the
registration of a person as an official liquidator comes into effect at the end
of the day on which there is given to the person a notice of the decision, being
a notice of the kind referred to in subsection (3).
(1) The Board may, if it is satisfied on an application by ASIC for a
person who is registered as an auditor to be dealt with under this section that,
before, at or after the commencement of this section:
(a) the person has:
(i) contravened section 1288; or
(ii) ceased to be resident in Australia; or
(d) the person has failed, whether in or outside this jurisdiction, to
carry out or perform adequately and properly:
(i) the duties of an auditor; or
(ii) any duties or functions required by an Australian law to be carried
out or performed by a registered company auditor;
or is otherwise not a fit and proper person to remain registered as an
auditor;
by order, cancel, or suspend for a specified period, the registration of
the person as an auditor.
(2) The Board may, if it is satisfied on an application by ASIC for a
person who is registered as a liquidator to be dealt with under this section
that, before, at or after the commencement of this section:
(a) the person has:
(i) contravened section 1288; or
(ii) ceased to be resident in Australia; or
(d) that the person has failed, whether in or outside this jurisdiction,
to carry out or perform adequately and properly:
(i) the duties of a liquidator; or
(ii) any duties or functions required by an Australian law to be carried
out or performed by a registered liquidator;
or is otherwise not a fit and proper person to remain registered as a
liquidator;
by order, cancel, or suspend for a specified period, the registration of
the person as a liquidator.
(3) The Board may, if it is satisfied on an application by ASIC for a
person who is registered as a liquidator of a specified body corporate to be
dealt with under this section that, before, at or after the commencement of this
section:
(a) the person has:
(i) contravened subsection 1288(5); or
(ii) ceased to be resident in Australia; or
(d) that the person has failed, whether in or outside this jurisdiction,
to carry out adequately and properly the duties of a liquidator in respect of
the winding up of that body corporate or is otherwise not a fit and proper
person to remain registered as a liquidator of that body corporate;
by order, cancel, or suspend for a specified period, the registration of
the person as a liquidator of that body corporate.
(4) Where:
(a) ASIC applies to the Board for a person who is registered as an auditor
to be dealt with under this section; and
(b) the person is also registered as a liquidator or as a liquidator of a
specified body corporate;
the Board may, in addition to making an order under subsection (1), if
it is satisfied as to any of the matters specified in paragraph (2)(a) or
(d) or (3)(a) or (d), make an order cancelling, or suspending for a specified
period, the registration of the person as a liquidator or as a liquidator of
that body, as the case may be, and, where the Board makes such an order, the
order is, for the purposes of this Division, taken to have been made under
subsection (2) or (3), as the case may be.
(5) Where:
(a) ASIC applies to the Board for a person who is registered as a
liquidator to be dealt with under this section; and
(b) the person is also registered as an auditor or as a liquidator of a
specified body corporate;
the Board may, in addition to making an order under subsection (2), if
it is satisfied as to any of the matters specified in paragraph (1)(a) or
(d) or (3)(a) or (d), make an order cancelling, or suspending for a specified
period, the registration of the person as an auditor or as a liquidator of that
body, as the case may be, and, where the Board makes such an order, the order
is, for the purposes of this Division, taken to have been made under
subsection (1) or (3), as the case may be.
(6) Where:
(a) ASIC applies to the Board for a person who is registered as a
liquidator of a specified body corporate to be dealt with under this section;
and
(b) the person is also registered as an auditor or as a
liquidator;
the Board may, in addition to making an order under subsection (3), if
it is satisfied as to any of the matters specified in paragraph (1)(a) or
(d) or (2)(a) or (d), make an order cancelling, or suspending for a specified
period, the registration of the person as an auditor or as a liquidator, as the
case may be, and, where the Board makes such an order, the order is, for the
purposes of this Division, taken to have been made under subsection (1) or
(2), as the case may be.
(7) The Board must, if it is satisfied on an application by ASIC for a
prescribed person to be dealt with under this section:
(a) that the person is disqualified from managing corporations under
Part 2D.6; or
(b) that the person is incapable, because of mental infirmity, of managing
his or her affairs;
by order, cancel each prescribed registration of the person.
(8) In subsection (7) and in this subsection:
prescribed person means a person who is registered as an
auditor, as a liquidator or as a liquidator of a specified body
corporate.
prescribed registration, in relation to a prescribed person,
means a registration of the person as an auditor, as a liquidator or as the
liquidator of a specified body corporate.
(9) Where, on an application by ASIC for a person who is registered as an
auditor, as a liquidator or as a liquidator of a specified body corporate to be
dealt with under this section, the Board is satisfied that the person has failed
to carry out or perform adequately and properly any of the duties or functions
mentioned in paragraph (1)(d), (2)(d) or (3)(d), as the case may be, or is
otherwise not a fit and proper person to remain registered as an auditor,
liquidator or liquidator of that body, as the case may be, the Board may deal
with the person in one or more of the following ways:
(a) by admonishing or reprimanding the person;
(b) by requiring the person to give an undertaking to engage in, or to
refrain from engaging in, specified conduct;
(c) by requiring the person to give an undertaking to refrain from
engaging in specified conduct except on specified conditions;
and, if a person fails to give an undertaking when required to do so under
paragraph (b) or (c), or contravenes an undertaking given pursuant to a
requirement under that paragraph, the Board may, by order, cancel, or suspend
for a specified period, the registration of the person as an auditor, as a
liquidator or as a liquidator of a specified body corporate, as the case may
be.
(10) Where, on an application by ASIC for a person who is registered as an
auditor, as a liquidator or as a liquidator of a specified body corporate to be
dealt with under this section, the Board is empowered to deal with the person as
mentioned in subsection (9), the Board may so deal with the
person:
(a) if the Board is required to make an order under subsection (6) on
the application—in addition to making such an order; or
(b) otherwise—in addition to, or instead of, cancelling or
suspending the registration of the person as an auditor, as a liquidator or as a
liquidator of that body, as the case may be.
(11) The Board may exercise any of its powers under this Division in
relation to a person as a result of conduct engaged in by the person whether or
not that conduct constituted or might have constituted an offence, and whether
or not any proceedings have been brought or are to be brought in relation to
that conduct.
(12) This section has effect subject to section 1294.
(1) The Board must not:
(a) cancel or suspend the registration of a person as an auditor, as a
liquidator or as a liquidator of a specified body corporate; or
(b) deal with a person in any of the ways mentioned in subsection
1292(9);
unless the Board has given the person an opportunity to appear at a hearing
held by the Board and to make submissions to, and adduce evidence before, the
Board in relation to the matter.
(2) Where subsection (1) requires the Board to give a person an
opportunity to appear at a hearing and to make submissions to, and bring
evidence before, the Board in relation to a matter, the Board must give ASIC an
opportunity to appear at the hearing and to make submissions to, and bring
evidence before, the Board in relation to the matter.
(1) Where a registration of a person is suspended, the Board may, on an
application by the person or of its own motion, by order, terminate the
suspension.
(2) An order under subsection (1) has effect accordingly.
(1) Where the Board decides to exercise any of its powers under
section 1292 in relation to a person, or decides that it is required to
make an order under subsection 1292(7) in relation to a person, the Board must,
within 14 days after the decision:
(a) give to the person a notice in writing setting out the decision and
the reasons for it; and
(b) lodge a copy of the notice referred to in paragraph (a);
and
(c) cause to be published in the Gazette a notice in writing
setting out the decision.
(2) Where the Board decides to refuse to exercise its powers under
section 1292 in relation to a person, or decides that it is not required to
make an order under subsection 1292(7) in relation to a person, the Board must,
within 14 days after the decision:
(a) give to the person a notice in writing setting out the decision and
the reasons for it; and
(b) lodge a copy of the notice referred to in
paragraph (a).
(3) The validity of a decision of the Board is not affected by failure of
the Board to comply with subsection (1) or (2), as the case requires, in
relation to the decision.
(1) Subject to subsection (2) and to sections 41 and 44A of the
Administrative Appeals Tribunal Act 1975, an order made by the Board
cancelling or suspending the registration of a person as an auditor, as a
liquidator or as a liquidator of a specified body corporate comes into effect at
the end of the day on which there is given to the person a notice of the
decision pursuant to which the order is made, being a notice of the kind
referred to in paragraph 1296(1)(a).
(2) Where the Board makes an order of a kind referred to in
subsection (1), it may, in order to enable an application to be made to the
Tribunal for review of the decision to make the order, determine that the order
is not to come into effect until a specified time or until the happening of a
specified event.
(3) The Board may at any time vary or revoke a determination made under
subsection (2), including such a determination that has been varied at
least once before.
(4) A determination in force under subsection (2) has effect
accordingly.
A person whose registration as an auditor, as a liquidator, as a
liquidator of a specified body corporate or as an official liquidator is
suspended is, except for the purposes of subsections 1285(2) and 1286(3),
section 1287 (other than paragraphs 1287(1)(a), (2)(a) and (3)(a)),
section 1288 and this Division, taken not to be registered as an auditor,
liquidator, liquidator of that body corporate or official liquidator, as the
case may be, so long as the registration is suspended.
(1) A book that is by this Act required to be available for inspection
must, subject to and in accordance with this Act, be available for inspection at
the place where, in accordance with this Act, it is kept and at all times when
the registered office in this jurisdiction of the body corporate concerned is
required to be open to the public.
(2) If any register kept by a company or a foreign company for the
purposes of this Act is kept at a place other than the registered office of the
company or foreign company, that place must be open to permit the register to be
inspected during the same hours as those during which the registered office of
the company or foreign company is required to be open to the public.
(2A) If a person asks a proprietary company in writing to inspect a
particular book of the company that the person has a right to inspect, the
company must make it available within 7 days, for inspection by the person at
the place where it is required to be kept.
(3) A person permitted by this Act to inspect a book may make copies of,
or take extracts from, the book and any person who refuses or fails to allow a
person so permitted to make a copy of, or take an extract from, the book is
guilty of an offence.
(1) This section applies if:
(a) a corporation records, otherwise than in writing, matters (the
stored matters) this Act requires to be contained in a book;
and
(b) the record of the stored matters is kept at a place (the place
of storage) other than the place (the place of inspection)
where the book is, apart from this section, required to be kept; and
(c) at the place of inspection means are provided by which the stored
matters are made available for inspection in written form; and
(d) the corporation has lodged a notice:
(i) stating that this section is to apply in respect of:
(A) except where sub-subparagraph (B) applies—the book;
or
(B) if the stored matters are only some of the information that is
required to be contained in the book—the book and matters that are of the
same kind as the stored matters; and
(ii) specifying the situation of the place of storage and the place of
inspection.
(2) Subject to subsection (4), the corporation is taken to have
complied with the requirements of this Act as to the location of the book, but
only in so far as the book is required to contain the stored matters.
(3) Subject to subsection (4), for the purposes of the application of
subsection 1085(3) and section 1300 in relation to the corporation and the
book, the book is taken to be kept at the place of inspection, even though the
record of the stored matters is kept at the place of storage.
(4) If:
(a) the situation of the place of storage or the place of inspection
changes; and
(b) the corporation does not lodge notice of the change within 14 days
after the change;
this section, as it applies to the corporation because of the lodging of
the notice referred to in paragraph (1)(d), ceases to so apply at the end
of that period of 14 days.
(1) A register that is required by section 271 to be kept by a
company must be kept at the registered office or at an office at the principal
place of business in this jurisdiction of the company but:
(a) if the work of making up the register is done at another office of the
company in this jurisdiction, it may be kept at that other office; or
(b) if the company arranges with some other person to make up the register
on its behalf and the office of that other person at which the work is done is
in this jurisdiction, it may be kept at that office; or
(c) if ASIC approves, it may be kept at another office in this
jurisdiction, being an office of the company or of another person.
(3) If default is made in complying with subsection (1) in its
application to any register of a company, the company, any officer of the
company who is in default, and any person who has arranged with the company to
make up the register on its behalf and is in default, are each guilty of an
offence.
(4) A company must, within 7 days after any register of the company to
which subsection (1) applies is first kept at an office other than the
registered office or the principal office, as the case may be, lodge notice of
the address of the office where the register is kept and must, within 7 days
after any change in the place at which the register is kept, lodge notice of the
change.
(5) If default is made in complying with subsection (4) in its
application to any register of a company, the company and any officer of the
company who is in default are each guilty of an offence.
(7) In this section, unless the contrary intention appears,
company includes a registered body.
If any person in contravention of this Act refuses to permit the
inspection of any book or to supply a copy of any book, the Court may by order
compel an immediate inspection of the book or order the copy to be
supplied.
(1) Where under this Act a person is required to lodge an instrument or a
certified copy of an instrument and the instrument is not written in English,
the person must lodge at the same time a certified translation of the instrument
into English.
(2) Where under this Act a body corporate is required to make an
instrument available for inspection and the instrument is not written in
English, the body corporate must keep at its registered office or, if it does
not have a registered office, at its principal office in this jurisdiction, a
certified translation of the instrument into English.
(3) In this section, instrument includes any certificate,
contract or other document.
(1) A book kept by a body corporate under a requirement of this Act is
admissible in evidence in any proceeding and is prima facie evidence of any
matter stated or recorded in the book.
(2) A document purporting to be a book kept by a body corporate is, unless
the contrary is proved, taken to be a book kept as mentioned in
subsection (1).
(1) A book that is required by this Act to be kept or prepared may be kept
or prepared:
(a) by making entries in a bound or looseleaf book; or
(b) by recording or storing the matters concerned by means of a
mechanical, electronic or other device; or
(c) in any other manner approved by ASIC.
(2) Subsection (1) does not authorise a book to be kept or prepared
by a mechanical, electronic or other device unless:
(a) the matters recorded or stored will be capable, at any time, of being
reproduced in a written form; or
(b) a reproduction of those matters is kept in a written form approved by
ASIC.
(3) A corporation must take all reasonable precautions, including such
precautions (if any) as are prescribed, for guarding against damage to,
destruction of or falsification of or in, and for discovery of falsification of
or in, any book or part of a book required by this Act to be kept or prepared by
the corporation.
(4) Where a corporation records or stores any matters by means of a
mechanical, electronic or other device, any duty imposed by this Act to make a
book containing those matters available for inspection or to provide copies of
the whole or a part of a book containing those matters are to be construed as a
duty to make the matters available for inspection in written form or to provide
a document containing a clear reproduction in writing of the whole or part of
them, as the case may be.
(4A) The regulations may provide for how up to date the information
contained in an instrument prepared for the purposes of subsection (4) must
be.
(5) If:
(a) because of this Act, a book that this Act requires to be kept or
prepared is prima facie evidence of a matter; and
(b) the book, or a part of the book, is kept or prepared by recording or
storing matters (including that matter) by means of a mechanical, electronic or
other device;
a written reproduction of that matter as so recorded or stored is prima
facie evidence of that matter.
(6) A writing that purports to reproduce a matter recorded or stored by
means of a mechanical, electronic or other device is, unless the contrary is
established, taken to be a reproduction of that matter.
(1) An officer, former officer, member or former member of a company who
conceals, destroys, mutilates or falsifies any securities of or belonging to the
company or any books affecting or relating to affairs of the company is guilty
of an offence.
(2) Where matter that is used or intended to be used in connection with
the keeping of any books affecting or relating to affairs of a company 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 the person knows
to be false or misleading in a material particular; or
(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 or recovering other matter to be recorded or
stored by means of that device; or
(c) having a duty to record or store matter by means of that device, fails
to record or store the matter by means of that device:
(i) with intent to falsify any entry made or intended to be compiled,
wholly or in part, from matter so recorded or stored; or
(ii) knowing that the failure so to record or store the matter will render
false or misleading in a material particular other matter so recorded or
stored;
contravenes this subsection.
(3) It is a defence to a charge arising under subsection (1) or (2)
if the defendant proves that he, she or it acted honestly and that in all the
circumstances the act or omission constituting the offence should be
excused.
(4) In this section, officer, in relation to a company,
includes a receiver of property of the company who is not also a
manager.
(1) A corporation must not advertise or publish:
(a) a statement of the amount of its capital that is misleading;
or
(b) a statement in which the total of all amounts paid and unpaid
on shares in the company is stated but the amount of paid up capital or the
amount of any charge on uncalled capital is not stated.
(2) A person who, in a document required by or for the purposes of this
Act or lodged with or submitted to ASIC, makes or authorises the making of a
statement that to the person’s knowledge is false or misleading in a
material particular, or omits or authorises the omission of any matter or thing
without which the document is to the person’s knowledge misleading in a
material respect, is guilty of an offence.
(3) A person who makes or authorises the making of a statement that is
based on information that to the person’s knowledge:
(a) is false or misleading in a material particular; or
(b) has omitted from it a matter or thing the omission of which renders
the information misleading in a material respect;
is, for the purposes of subsection (2), taken to have made or
authorised the making of a statement that to the person’s knowledge was
false or misleading in a material particular.
(3A) A person is not liable to be proceeded against for an offence in
consequence of a regulation made under section 1364 as well as for an
offence against subsection (2) of this section.
(4) A person who, in a document required by or for the purposes of this
Act or lodged:
(a) makes or authorises the making of a statement that is false or
misleading in a material particular; or
(b) omits or authorises the omission of any matter or thing without which
the document is misleading in a material respect;
without having taken reasonable steps to ensure that the statement was not
false or misleading or to ensure that the statement did not omit any matter or
thing without which the document would be misleading, as the case may be, is
guilty of an offence.
(5) A person who makes or authorises the making of a statement without
having taken reasonable steps to ensure that the information on which the
statement was based:
(a) was not false or misleading in a material particular; and
(b) did not have omitted from it a matter or thing the omission of which
would render the information misleading in a material respect;
is, for the purposes of subsection (4), taken to have made or
authorised the making of a statement without having taken reasonable steps to
ensure that the statement was not false or misleading.
(6) For the purposes of subsections (2) and (4), where:
(a) at a meeting, a person votes in favour of a resolution approving, or
otherwise approves, a document required by or for the purposes of this Act or
required to be lodged; and
(b) the document contains a statement that, to the person’s
knowledge, is false or misleading in a material particular, or omits any matter
or thing without which the document is, to the person’s knowledge,
misleading in a material respect;
the person is taken to have authorised the making of the statement or the
omission of the matter or thing.
(7) For the purposes of this section, a statement, report or other
document that:
(a) relates to affairs of a company or of a subsidiary of a company;
and
(b) is not itself required by this Act to be laid before the company in
general meeting; and
(c) is attached to or included with a report of the directors sent under
section 314 to members of the company or laid before the company at an
annual general meeting of the company;
is taken to be part of the report referred to in
paragraph (c).
(8) A person must not, in connection with an application for a securities
licence or futures 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 because of that
omission the application is misleading in a material respect.
(1) An officer of a corporation who makes available or gives information,
or authorises or permits the making available or giving of information,
to:
(a) a director, auditor, member, debenture holder or trustee for debenture
holders of the corporation; or
(b) if the corporation is taken for the purposes of Chapter 2M to be
controlled by another corporation—an auditor of the other corporation;
or
(c) a securities exchange in Australia or elsewhere or an officer of such
a securities exchange;
being information, whether in documentary or any other form, that relates
to the affairs of the corporation and that, to the knowledge of the
officer:
(d) is false or misleading in a material particular; or
(e) has omitted from it a matter or thing the omission of which renders
the information misleading in a material respect;
is guilty of an offence.
(2) An officer of a corporation who makes available or gives information,
or authorises or permits the making available or giving of information,
to:
(a) a director, auditor, member, debenture holder or trustee for debenture
holders of the corporation; or
(b) if the corporation is taken for the purposes of Chapter 2M to be
controlled by another corporation—an auditor of the other corporation;
or
(c) a securities exchange in Australia or elsewhere or an officer of such
a securities exchange;
being information, whether in documentary or any other form, relating to
the affairs of the corporation that:
(d) is false or misleading in a material particular; or
(e) has omitted from it a matter or thing the omission of which renders
the information misleading in a material respect;
without having taken reasonable steps to ensure that the
information:
(f) was not false or misleading in a material particular; and
(g) did not have omitted from it a matter or thing the omission of which
rendered the information misleading in a material respect;
is guilty of an offence.
(3) The references in subsections (1) and (2) to a person making
available or giving, or authorising or permitting the making available or giving
of, information relating to the affairs of a corporation include references to a
person making available or giving, or authorising or permitting the making
available or giving of, information as to the state of knowledge of that person
with respect to the affairs of the corporation.
(4) Where information is made available or given to a person referred to
in paragraph (1)(a), (b) or (c) or (2)(a), (b) or (c) in response to a
question asked by that person, the question and the information are to be
considered together in determining whether the information was false or
misleading.
(5) A person must not, for the purposes of this Act, lodge with a futures
exchange, a clearing house for a futures exchange, or a futures association, a
document that contains a statement that, to the person’s knowledge, is
false or misleading.
A person must not, without lawful excuse, obstruct or hinder ASIC, or any
other person, in the performance or exercise of a function or power under this
Act.
(1) A person who:
(a) does an act or thing that the person is forbidden to do by or under a
provision of this Act; or
(b) does not do an act or thing that the person is required or directed to
do by or under a provision of this Act; or
(c) otherwise contravenes a provision of this Act;
is guilty of an offence by virtue of this subsection, unless that or
another provision of this Act provides that the person:
(d) is guilty of an offence; or
(e) is not guilty of an offence.
(1A) Paragraphs (1)(a), (b) and (c) only apply to a provision in the
following list if a penalty, pecuniary or otherwise, is set out in
Schedule 3 for that provision, or for a provision or provisions in which
that provision is included:
(a) Chapters 2A, 2B and 2C;
(b) Parts 2F.2 and 2F.3;
(c) Chapters 2G, 2H, 2J, 2M (other than Part 2M.4), 2N and
5A;
(d) Parts 5B.1 and 5B.3;
(e) Chapter 10.
(2) Subject to section 1312, a person who is guilty of an offence
against this Act, whether by virtue of subsection (1) or otherwise, is
punishable, on conviction, by a penalty not exceeding the penalty applicable to
the offence.
(3) Where:
(a) subsection (1) operates in relation to a provision of this Act so
as to make a person guilty of an offence; or
(b) a provision of this Act (other than this section) provides that a
person is, in circumstances referred to in the provision, guilty of an
offence;
and a penalty, pecuniary or otherwise, is set out in Schedule 3 for
that provision, or for a provision or provisions in which that provision is
included, the penalty applicable to the offence is the penalty so set
out.
(4) Where a provision of this Act (other than this section) provides that
the penalty applicable to a contravention of a particular provision of this Act
is a specified penalty, pecuniary or otherwise, the penalty applicable to an
offence constituted by a contravention of the particular provision is the
specified penalty.
(5) Except as provided in subsection (3) or (4) or in a provision of
this Act (other than this section), the penalty applicable to the offence is a
fine of 5 penalty units.
Where a body corporate is convicted of an offence against this Act, the
penalty that the court may impose is a fine not exceeding 5 times the maximum
amount that, but for this section, the court could impose as a pecuniary penalty
for that offence.
(1) Where ASIC has reason to believe that a person has committed a
prescribed offence, ASIC may, subject to subsection (2), give 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;
and
(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 despite the
service of the notice or the payment of the prescribed penalty; and
(B) that if, within the period specified in the notice (being a period of
at least 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 end 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 of
at least 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 end 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 ASIC:
(a) to give 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 give 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 1316.
(3) A notice under subsection (1) may be given to a natural person
either personally or by post.
(4) Where a notice under subsection (1) is given to 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; or
(b) if, at the end 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 1314 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, the person had been convicted of an offence constituted by a
failure to do that act or thing; or
(c) if, at the end of the period specified in the notice, the person has
not paid the prescribed penalty to the authority specified in the notice but had
done the act or thing—proceedings may be instituted against the person in
respect of the prescribed offence; or
(d) if, at the end 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 given to 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 end 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 is not 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.
prescribed offence means:
(a) a subsection 1311(5) offence; or
(b) an offence against this Act that the regulations prescribe for the
purposes of this section.
prescribed penalty, in relation to a prescribed offence in
relation to which ASIC may give, or has given, to a person a notice under
subsection (1), means:
(a) if the offence is a subsection 1311(5) offence:
(i) if the regulations prescribe in relation to the offence for the
purposes of this paragraph an amount not exceeding one half the amount of the
penalty applicable to the offence:
(A) if the person is a body corporate—a penalty of five times the
amount so prescribed; or
(B) otherwise—a penalty of the amount so prescribed; or
(ii) otherwise:
(A) if the person is a body corporate—a penalty of 1.25 times the
amount of the penalty applicable to the offence; or
(B) otherwise—a penalty of 0.25 times the amount of the penalty
applicable to the offence; or
Note: Section 1311 provides for the penalty applicable
to an offence.
(b) otherwise—a penalty of the amount that the regulations prescribe
in relation to the offence.
subsection 1311(5) offence means an offence the penalty
applicable to which is provided for by subsection 1311(5).
Where:
(a) a person does or omits to do an act outside this jurisdiction;
and
(b) if that person had done or omitted to do that act in this
jurisdiction, the person would, by reason of also having done or omitted to do
an act in this jurisdiction, have been guilty of an offence against this
Act;
the person is guilty of that offence.
(1) Where:
(a) by or under a provision, an act is or was required to be done within a
particular period or before a particular time; and
(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, after that period has ended or
that time has passed, and whether or not a person is or has been 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 or was required to be done but
neither a period nor a time for the doing of the Act is or was specified;
and
(b) failure to do the act constitutes an offence; and
(c) a person is or has been convicted of a primary substantive offence in
relation to failure to do the act;
then:
(d) the obligation to do the act continues, despite the conviction, until
the act is done; and
(e) subsections (3) and (4) apply.
(3) Where:
(a) at a particular time, a person is or was first convicted of a
substantive offence, or is or was convicted of a second or subsequent
substantive offence, in relation to failure to do the act; and
(b) the failure to do the act continued after that time;
then:
(c) 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 continued or elapsed after that time and before the relevant day
in relation to the further offence; and
(d) for the purposes of this Act and of the Crimes Act 1914, the
further offence is taken to be constituted by failure to do the act during so
much of that period as so elapsed.
(4) Where:
(a) the provision referred to in paragraph (1)(a) or (2)(a), as the
case may be, provides or provided that:
(i) an officer of a body corporate; or
(ii) a person;
who is or was in default, or is or was involved in a contravention
constituted by the failure to do the act, is or was guilty of an offence or
contravenes or contravened a provision of this Act; and
(b) throughout a particular period (in this subsection called the
relevant period):
(i) the failure to do the act continued; and
(ii) a person (in this subsection called the derivative
offender) is or was in any way, by act or omission, directly or
indirectly, knowingly concerned in or party to the failure to do the act;
and
(iii) in a case where subparagraph (a)(i) applies—the
derivative offender is or was an officer of the body;
then:
(c) in a case where either or both of the following events occurs or
occur:
(i) a person is or was convicted, before or during the relevant period, of
a primary substantive offence in relation to failure to do the act;
(ii) the derivative offender is or was 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 called the relevant offence) in
respect of so much (if any) of the relevant period as elapsed:
(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 or was first convicted of a secondary derivative offence,
or is or was 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 elapsed after that time and before the relevant
day in relation to the further offence.
(5) Where a person is guilty, by virtue of subsection (3) or (4), 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 half a
penalty unit 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 or was guilty by virtue of being an
officer of a corporation, or a person, who is or was in any way, by act or
omission, directly or indirectly, knowingly concerned in or party to failure to
do the act.
primary substantive offence, in relation to a failure to do
an act, means an offence (other than an offence of which a person is or was
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) For the purposes of subsection (4), a provision of this Act is,
whether or not it expressly provides as mentioned in paragraph (4)(a),
taken to provide that a person who is or was involved in a contravention
constituted by a failure to do an act required by the provision contravenes or
contravened that provision.
(1) Subject to this Act, in any proceedings for an offence against this
Act, any information, charge, complaint or application may be laid or made
by:
(a) ASIC; or
(b) a Commission delegate; or
(c) another person authorised in writing by the Minister to institute the
proceedings.
(2) A delegation for the purposes of paragraph (1)(b), or an
authorisation for the purposes of paragraph (1)(c), may relate to all
offences, or to specified offences, against this Act.
(3) Nothing in this section affects the operation of the Director of
Public Prosecutions Act 1983.
Despite anything in any other law, proceedings for an offence against
this Act may be instituted within the period of 5 years after the act or
omission alleged to constitute the offence or, with the Minister’s
consent, at any later time.
(1) In a Corporations Act criminal proceeding, a body corporate is not
entitled to refuse or fail to comply with a requirement:
(a) to answer a question or give information; or
(b) to produce a book or any other thing; or
(c) to do any other act whatever;
on the ground that the answer or information, production of the book or
other thing, or doing that other act, as the case may be, might tend:
(d) to incriminate the body (whether in respect of an offence to which the
proceeding relates or otherwise); or
(e) to make the body liable to a penalty (whether in respect of anything
to which the proceeding relates or otherwise).
(2) Subsection (1) applies whether or not the body concerned is a
defendant in the proceeding or in any other proceeding.
(3) In this section:
Corporations Act criminal proceeding means a proceeding in a
court when exercising jurisdiction in respect of a criminal matter arising under
this Act.
(1) Where a prosecution in respect of an offence against this Act has been
instituted, or ASIC 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), ASIC 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 the person who is so required must give
all assistance in connection with the prosecution that that person is reasonably
able to give.
(2) ASIC must not make such a requirement as is mentioned in
subsection (1) of a person who, in the opinion of ASIC, is or is likely to
be a defendant in the proceedings or is or has been such a person’s
lawyer.
(3) If a person to whom paragraph (1)(a) or (b) relates fails to give
assistance as required by subsection (1), the person contravenes this
section and, without affecting any penalty to which the person may be liable for
the contravention, the Court may, on the application of ASIC, order the 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