Securities Industry Act 1971 (Qld)

3 ANNO VICESIMO ELIZABETHAE SECUNDAE REGINAE No. 2 of 1971 An Act to make provisions with respect to Stock Exchanges and Stock Brokers and other persons dealing in Securities ; to create certain offences related to trading in Securities ; to provide for the appointment of a Commissioner for Corporate Affairs; and for purposes connected therewith [ASSENTED TO 14TH APRIL, 1971] BE IT ENACTED by the Queen's Most Excellent Majesty, by and with the advice and consent of the Legislative Assembly of Queensland in Parliament assembled, and by the authority of the same, as follows:- 1. Short title . Industry Act 1971. PART I-PRELIMINARY This Act may be cited as the Securities 2. Commencement . (1) This Part of this Act shall commence on the day on which this Act receives the Royal assent. (2) Subject to subsection (1) of this section, this Act shall commence in accordance with subsection (3) of this section.

4 Securities Industry Act 1971, No. 2 (3) The Governor in Council may appoint, and notify by Proclamation published in the Gazette, the day upon which a Part or provision of this Act shall commence and may, at different times, appoint different days for different Parts or provisions, and the Part or provision to which such a Proclamation relates shall commence as specified therein. 3. Division into Parts . This Act is divided into Parts, as follows:- PART I-PRELIMINARY (ss. 1-4); PART II-ADMINISTRATION (ss. 5-11); PART III-STOCK EXCHANGES (ss. 12-15); PART IV-LICENCES, ETC.- Division 1-Licences (ss. 16-29); Division 2-Records (ss. 30-36); PART V-CONDUCT OF SECURITIES BUSINESS (ss. 37-41); PART VI-ACCOUNTS AND AUDIT (ss. 42-59); PART VII-INVESTMENT OF STOCK BROKER'S TRUST FUNDS (ss. 60-66);' PART VIII-FIDELITY FUNDS (ss. 67-90); PART IX-TRADING IN SECURITIES (ss. 91-97); PART X-GENERAL (ss. 98-103). 4. Interpretation . (1) In this Act, unless the contrary intention appears- agent " in relation to a dealer includes a person who is or at any time has been a banker of the dealer; " auditor " means a registered company auditor within the meaning of The Companies Acts 1961 to 1964; " Assistant Commissioner " means an Assistant Commissioner for Corporate Affairs appointed under section 6 of this Act; " business " in relation to a dealer means a business of dealing in securities ; " Commissioner " means the Commissioner for Corporate Affairs appointed under section 5 of this Act; " committee " in relation to a stock exchange means the persons for the time being in whom the management of the stock exchange is vested; " corresponding law " means any Act or enactment of any other State or a Territory of the Commonwealth which the Governor in Council declares by Proclamation published in the Gazette to be a corresponding law for the purposes of this Act; " Court " means the Supreme Court of Queensland or a judge thereof; " dealer " means a person who carries on a business of dealing in securities whether or not he carries on any other business, but does not include an exempt dealer; dealer's representative " means a person in the direct employment of or acting for or by arrangement with a dealer (not being a dealer who is a stock broker or an exempt dealer) who

Securities Industry Act 1971, No. 2 5 performs for that dealer any of the functions of a dealer (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages, commission or otherwise and, where the dealer is a corporation, includes any director, member or officer of the corporation who is not the holder of a dealer's licence and- who performs for the corporation any of those functions (whether or not his remuneration is as aforesaid); " dealing in securities " means (whether as principal or agent) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into any agreement (other than an exempt agreement)- (a) for or with a view to acquiring, disposing of, subscribing for or underwriting securities; or (b) the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities; " exempt agreement " means- (a) any agreement for or with a view to acquiring, disposing of, subscribing for or underwriting securities, or the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities, which is made by or with- (i) an exempt dealer; (ii) any government, local government authority or any body corporate or unincorporate other than an investment corporation (being a corporation prescribed as such for the purposes of this Act) and relates to subscriptions for or the disposal, acquisition or redemption of securities of or in that government, local government authority or body corporate or unincorporate; or (iii) the underwriter of an issue of securities and relates only to the underwriting of the issue; or (b) an agreement or an agreement of a class that is under the regulations an exempt agreement or an agreement of an exempt class; " exempt dealer " means- (a) a person who carries on a business of dealing in securities only through a stock broker or the holder of a dealer's licence; (b) a corporation that is declared by the Governor in Council pursuant to paragraph (b) of subsection (7) of section 38 of The Companies Acts 1961 to 1964 to be an authorized dealer in the short term money market; or (c) any public statutory corporation constituted under a law of the Commonwealth or of a State of the Commonwealth; " investment adviser " means a person who carries on a business of advising others concerning securities or who as part of a regular business issues or promulgates analyses or reports concerning securities but does not include the proprietor or publisher of a bona fide newspaper or periodical generally

6 Securities Industry Act 1971, No. 2 available to the public otherwise than only on subscription who only in that bona fide newspaper or periodical advises others concerning securities or issues or promulgates analyses or reports concerning securities but does include the proprietor of a newspaper or periodical whose principal or only object is to advise others concerning securities or to issue or promulgate analyses or reports concerning securities; " investment representative " means a person in the direct employment of or acting for or by arrangement with an investment adviser ( not being an investment adviser who is a dealer or an exempt dealer, who performs for that investment adviser any of the functions of an investment adviser (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages, commission or otherwise and, where the investment adviser is a corporation, includes any director, member or officer of the corporation who is not the holder of an investment adviser's licence and who performs for such corporation any of those functions (whether or not his remuneration is as aforesaid); " licence " means- (a) a dealer ' s licence; - (b) an investment adviser's licence; or (c) a representative ' s licence- under Part IV of this Act; " member firm " means a firm- ( a) which carries on a business of dealing in securities the partners in which are members of the same stock exchange; or (b) which carries on a business of dealing in securities and is recognized as a member firm by a stock exchange; " relevant authority " means- (a) in relation to a sole trader, the stock exchange of which the sole trader is a member; (b) in relation to a member firm, the stock exchange of which the partners therein are members or by which the firm is recognized; and (c) in relation to any other person, the Commissioner; " representative " means a dealer ' s representative or an investment representative; " rules " in relation to a stock exchange means the rules governing the conduct of the stock exchange or the members thereof by whatever name called and wherever contained and includes rules contained in the memorandum of association and the articles of association of the stock exchange; " securities " means debentures , funds, stocks , shares or bonds of any government or of any local government authority or of any body corporate or unincorporate and includes any right or option in respect thereof and any interest as defined in section 76 of The Companies Acts 1961 to 1964; " sole trader " means a stock broker who carries on a business of dealing in securities on his own account and not in partnership;

Securities Industry Act 1971, No. 2 7 " stock broker " means- (a) a member of a stock exchange; or (b) a partner in a member firm; " stock exchange " means- (a) The Brisbane Stock Exchange; and (b) any body corporate which has been approved by the Minister under section 13 of this Act; " stock market " means a market, exchange or other place at which securities are regularly, offered for sale, purchase or exchange; " trust account " means a trust account established under section 44 of this Act. (2) For the purposes of this Act, a reference to The Brisbane Stock Exchange includes a reference to a body corporate formed by or with the consent of the unincorporated body functioning as The Brisbane Stock Exchange at the commencement of this Act with the object of conducting The Brisbane Stock Exchange in succession to the said unincorporated body, with rules identical, save for any necessary adaptations, with the rules of The Brisbane Stock Exchange as in force at the said commencement with such rescissions, alterations and additions, if any, as may be approved by the Minister. (3) The regulations may provide that, subject to any terms and conditions prescribed, all or any of the provisions of this Act- (a) shall not have effect in relation to any specified person or to any person who is. a member of a specified class of persons- (i) who is or may be a dealer or investment adviser by reason only of his doing anything which is merely incidental to another business; (ii) who does not deal in securities for or on behalf of any other person; or (iii) who is a dealer or investment adviser by reason only of the entering into by him of any specified transaction or class of transactions; or (b) shall not have effect in relation to the representative of any person in respect of whom a regulation may be made under paragraph (a) of this subsection; or (c) shall have effect, in relation to any person in respect of whom a regulation may be made under paragraph (a) or (b) of this subsection, to such extent as is prescribed. PART II-ADMINISTRATION 5. Appointment of Commissioner for Corporate Affairs. (1) The Governor in Council may, subject to this Act, appoint a Commissioner for Corporate Affairs. (2) The Commissioner is hereby charged with the administration of this Act and shall have, and may exercise, such powers, authorities, duties and functions as are conferred or imposed upon him by or under this or any other Act. (3) The Commissioner shall be appointed and shall hold office under and in accordance with the provisions of the Public Service Act1922-1968.

8 Securities Industry Act 1971, No. 2 (4) The Commissioner shall as and when required by the Minister furnish reports with respect to the policy he is pursuing or proposes to pursue in the exercise or discharge of any of his powers, authorities, duties and functions. (5) The Minister may issue directions to the Commissioner on matters of policy and the Commissioner shall observe and carry out the directions so given. (6) The person who,. immediately before the commencement of this Part, held the office of Registrar of Companies and Commercial Acts, Brisbane under The Administration of Commercial Laws Act of 1962, shall without any further or other appointment whatsoever be, and shall be deemed to have been appointed under the Public ServiceAct1922-1968 to be, the Commissioner for Corporate Affairs. (7) All courts, judges and persons acting judicially shall take judicial notice of the seal of the Commissioner and the signature of the Commissioner and any Assistant Commissioner. 6. Appointment of Assistant Commissioner . (1) The Governor in Council may, under and in accordance with the Public Service. Act 1922-1968, appoint such Assistant Commissioners for Corporate Affairs as are required to assist the Commissioner in the exercise of his powers, authorities, duties -and functions under this or any other Act. (2) During the absence from whatever cause , or a vacancy in the office, of the Commissioner a person for the time being holding or acting in the office of Assistant Commissioner designated in writing by the Minister shall act in the place of the Commissioner and may exercise and discharge while he so acts all the powers, authorities, duties and functions of the Commissioner. (3) No person shall be concerned to enquire whether any occasion has arisen requiring or authorizing an Assistant Commissioner to act in the place of the Commissioner and all acts or other things done or omitted by an Assistant Commissioner in the course of so acting shall be as valid and effectual and shall have the same consequences as if they had been done or omitted by the Commissioner. 7. Appointment of officers. (1) The Governor in Council may, under and in accordance with the Public Service Act1922-1968, appoint and employ such officers and employees as may be necessary for the exercise and discharge by the Commissioner of his powers, authorities, duties and functions under this or any other Act. (2) Except where otherwise expressly provided by or under this or any other Act, any power, authority, duty or function conferred or imposed by or under this or any other Act on the Commissioner may be exercised or performed by any officer (including an Assistant Commissioner) or employee authorized by the Commissioner to exercise or perform that power, authority, duty or function. (3) Any act done by an officer or employee that purports to have been done pursuant to an authorization of the Commissioner under subsection (2) of this section shall be deemed to have been done by the Commissioner unless the contrary be shown. (4) Officers and employees appointed under this Part shall be under the direction of the Commissioner and shall perform such duties as may be assigned by the Commissioner.

Securities Industry Act 1971, No. 2 9 (5) Except for the purpose of carrying into effect the provisions of this Act or any corresponding law or so far as may be required for the purpose of any proceedings, civil or criminal, an officer or person appointed or employed under this Act shall not communicate any matter which may come to his knowledge in the performance of his duties as such an officer or person to any person other than the Minister, the Commissioner, the relevant authority other than the Commissioner in relation to any person and any other person specified by the Minister, Commissioner or relevant authority. 8. Inspection of books and records of licensee and others . (1) For the purpose of ascertaining whether any dealer, investment adviser or representative has complied with the provisions of this Act applicable to him in that capacity, and, where such a person is the holder of a licence, any conditions or restrictions subject to which the licence was granted or renewed, the Commissioner may inspect and make copies of or take extracts from- (a) any document, record or matter required by or under this Act or, in the case of a holder of a licence, the conditions of the licence to be kept by the dealer, investment adviser or representative, as the case may be; and (b) any banker's books, or. the books of any dealer, in so far as they relate to the business carried on as such by the dealer, investment adviser or representative, as the case may be. (2) In subsection (1) of this section " banker's books " includes any cheques, bills of exchange, promissory notes, orders for payment of money made or given by the dealer, investment adviser or representative, as the case may be, and securities held by a banker by way of pledge or otherwise in relation to the dealer, investment adviser or representative, as the case may be. (3) The Commissioner may require a dealer to disclose to him in relation to any purchase or sale of securities the name of the person from or to or through whom or on whose behalf the securities were bought or sold and the nature of the instructions given to the dealer in respect of that purchase or sale. (4) A dealer, investment adviser or representative, any banker, and the servants and agents of those persons shall, on being required by the Commissioner so to do, produce any document, record or matter referred to in subsection (1) of this section or disclose the information required under subsection (3) of this section. (5) No person shall obstruct or hinder the Commissioner in the exercise of any of his powers under subsection (1), (3) or (6) of this section or obstruct any person in the exercise of any of those powers that he is duly authorized to exercise. (6) Where the Commissioner has reason to suspect that any person has contravened any of the provisions of this Act or has been guilty of any fraud of offence against this or any other Act or law with respect to trading or dealing in securities, the Commissioner may make such investigation as he thinks expedient for the due administration of this Act. 9. Minister may appoint an inspector . (1) Notwithstanding anything in section 8 of this Act; the Minister may, where it appears to him in the public interest so to do, appoint any person as an inspector to investigate any matter concerning trading or dealing in securities.

10 Securities Industry Act 1971, No. 2 (2) The provisions of subsections (3) to (7) (both inclusive) of section 169, subsections (2) to (7) (both inclusive) and subsection (10) of section 171, subsections (3) to (5) (both inclusive) of section 173, section 176, section 179, and section 367 of The Companies Acts 1961 to 1964 and any provisions amending, or in substitution (with or without modification) for, any of those provisions, shall with such adaptations and modifications as are necessary apply to and in relation to an appointment under subsection (1) of this section and, without affecting the generality of the foregoing, those provisions shall be applied as if- (a) the particulars of the matters into which the investigation is to be made were affairs of a company; and (b) " officer " in relation to the matters into which the investigation is to be made meant any person whom the inspector has reasonable grounds for suspecting or believing to be capable of giving information in relation to the matters under investigation. 10. Court may make certain orders . (1) Where, on the application of the Commissioner, it appears to the Court that a person has contravened this Act or any conditions of a licence he holds or is about to do an act with respect to dealing or trading in securities that, if done, would be such a contravention, the Court may, without prejudice to any orders it would be entitled to make otherwise than pursuant to this section, make one or more of the following orders:- (a) in the case of persistent or continuing breaches of the Act or of the conditions of a licence he holds, an order restraining a person from carrying on a business of dealing in securities, acting as an investment adviser, or as a dealer's representative or investment representative, or from holding himself out as so carrying on business or acting; (b) an order restraining a person from acquiring, disposing of or otherwise dealing with any securities specified in the order; (c) an order appointing a receiver of the property of a dealer; (d) an order declaring a contract relating to securities to be void or voidable; (e) 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; or (f) any ancillary order deemed to be desirable in consequence of the making of an order under paragraph (a), (b), (c), (d) or (e) of this subsection. (2) The Court shall, before making an order under subsection (1) of this section, satisfy itself, so far as it can reasonably do so, that the order would not unfairly prejudice any person. (3) The Court may, before making an order under subsection (1) of this section, direct that notice of the application be given to such persons as it thinks fit or direct that notice of the application be published in such manner as it thinks fit, or both. (4) A person shall not contravene or fail to comply with an order under subsection (1) of this section that is applicable to him. Penalty: $2,000 or imprisonment for six months, or both.

Securities Industry Act 1971, No. 2 11 (5) Subsection (4) of this section does not affect the powers of the Court in relation to the punishment of contempts of the Court. (6) The Court may rescind, vary or discharge an order made by it under this section or suspend the operation of such an order. 11. Production and inspection of books where offence suspected. (1) If, on an application made to a judge of the Court in chambers by the Commissioner, there is shown to be reasonable cause to believe that any person has committed an offence in connexion with trading or dealing in securities and that evidence of the commission of the offence is to be found in any books or papers of or under the control of a dealer or investment adviser (including banker's books as defined in subsection (2) of section 8 of this Act whether or not those books relate to the business of the dealer or investment adviser), an order may be made- (a) authorizing the Commissioner to inspect those books or papers or any of them and make copies thereof or take extracts therefrom for the purpose of investigating and obtaining evidence of the offence; or (b) requiring the dealer or investment adviser or such other person as is named in the otder to produce those books or papers or any of them to a person named in the order at a place so named. (2) No appeal shall lie against any order or decision of a judge on or in relation to an application under this section. PART III-STOCK EXCHANGES 12. Establishment , etc., of stock markets . A person shall not establish or maintain or assist in establishing or maintaining, or hold himself out as providing or maintaining, a stock market that is not the stock market of a stock exchange. Penalty: First offence $1,000. Second or subsequent offence $5,000. 13. Power for Minister to approve as stock exchange. Where application for approval of a body corporate as a stock exchange is made to the Minister in the prescribed form and manner, the Minister may in writing approve the body.corporate as a stock exchange if he is satisfied- (a) that at least ten members of the body will carry on business dealing in securities independently of and in competition with each other; (b) that the rules of the body make satisfactory provision- (i) for the exclusion from membership of persons who are not of good character and reputed business integrity; (ii) for the expulsion, suspension or disciplining of members for conduct inconsistent with just and equitable principles in the transaction of business or for a contravention of or failure to comply with the rules of the stock exchange or the provisions of this Act; (iii) with respect to the conditions under which securities may be listed for trading in the market proposed to be conducted by the body;

12 Securities Industry Act 1971, No. 2 (iv) with respect to the conditions governing dealings in securities by members; (v) with respect to the class or classes of securities that may be dealt in by members; and (vi) generally for the carrying on of the business of the stock exchange with due regard to the interests of the public; and (c) that the interests of the public will be served by the granting of his approval. 14. Minister to be notified of amendments to rules. (1) Where an amendment is made, whether by way of rescission of or alteration or addition to the rules of a stock exchange the committee of the stock exchange shall forward written notice thereof to the Minister. (2) If notice in accordance with the provisions of subsection (1) of this section is not given within twenty-one days after an amendment is made to the rules of a stock exchange, the amendment shall cease to have force and effect. (3) The Minister may, within twenty-one days after receipt of notice under subsection (1) of this section give notice to the stock exchange concerned that he disallows the whole or any specified part of the amendment to which the notice relates and thereupon the amendment shall, to the extent of the disallowance, cease to have force and effect. (4) A notice under this section may be served personally or by post. 15. Stock Exchange to notify listing requirements . (1) The committee of a stock exchange shall, within fourteen days after the commencement of this Part in the case of the Brisbane Stock Exchange and in any other case within fourteen days after the stock exchange in question commences to conduct a stock market, notify in writing the Commissioner of the conditions under which securities may be listed for trading in the market conducted. by the stock exchange and shall, within fourteen days after any rescission of or alteration or addition to those conditions, notify in writing the Commissioner of the rescission, alteration or addition and give full particulars thereof. (2) The committee of a stock exchange shall within seven days- (a) after the name of any corporation is suspended or withdrawn from the official list of that stock exchange on account of any failure on the part of the corporation to comply with the conditions referred to in subsection (1) of this section; or (b) after any failure by a corporation to comply with the conditions referred to in subsection (1) of this section has come to the knowledge of the committee that in the opinion of the committee warrants such action in that behalf, notify in writing the Commissioner of the suspension, withdrawal or failure as the case may be and give full particulars thereof. (3) It shall be a defence to any proceedings in defamation in respect of any notification made to the Commissioner under this section if the defendant satisfies the Court that the statement was made in good faith and without ill-will to the person concerned or any other improper motive.

Securities Industry Act 1971, No. 2 13 PART IV-LICENCES, ETC. Division 1-Licences 16. Transitional . Where a person would, but for this section, be liable to a penalty for not being the holder of a particular type of licence , he shall not be so liable- (a) until the expiration of the period of three months next succeeding the commencement of this Part; or (b) where, before the expiration of that period, he applies for that type of licence, until- (i) he is issued with such a licence; or (ii) his application is refused. 17. Dealer' s licence. (1) A person shall not carry on a business of dealing in securities or hold himself out as carrying on such a business unless he is the holder of a dealer's licence under this Part. (2) The provisions of subsection (1) of this section do not apply to a stock broker or an exempt dealer. 18. Investment adviser ' s licence. (1) A person shall not act as an investment adviser or hold himself out to be an investment adviser unless he is the holder of an investment adviser's licence under this Part. (2) The provisions of subsection (1) of this section do not apply to a stock broker or the holder of a dealer's licence. 19. Representative's licence. A person shall not- (a) act as a dealer's representative unless he is the holder of a dealer's representative's licence under this Part; or (b) act as an investment representative unless he is the holder of an investment representative's licence under this Part. 20. Applications for licence or renewal . (1) An application for a licence or for renewal of a licence shall be made to the Commissioner in the prescribed form and manner and shall be accompanied by the prescribed fee and, in the case of an application for renewal of a licence, shall be made not later than one month before the day on which the licence , if not renewed, would expire. (2) The Commissioner may require an applicant to supply him with any further information he considers necessary in relation to the application. (3) The Commissioner shall not refuse to grant or renew a licence without first giving the applicant for the licence or renewal an opportunity of being heard. 21. Commissioner to grant or renew dealer ' s licence, investment adviser ' s licence or representative ' s licence in certain circumstances. (1) The Commissioner shall grant or renew a dealer's licence or an investment adviser's licence if- (a) after consideration- (i) where the applicant is an individual-of the character and financial position of the applicant; or

14 Securities Industry Act 1971, No. 2 (ii) where the applicant is a corporation-of the character of the directors, managers and secretary of the corporation and of the corporation's financial position; and (b) after consideration of the interests of the public, he is of opinion that the applicant is a fit and proper person to hold the licence applied for. (2) The Commissioner shall grant or renew a representative's licence if after consideration of the application he is of opinion that the applicant is a fit and proper person to hold the licence applied for. 22. False , etc., statements in application . A person who in connexion with an application for a licence, or for the renewal of a licence, makes a statement false or misleading in a material particular knowing it to be false or misleading or wilfully omits to state any matter or thing without which the application is misleading in a material respect shall be guilty of an offence against this Act. Penalty: $1,000 or imprisonment for one year, or both. 23. Power to Commissioner to impose conditions or restrictions. (1) The Commissioner may grant or renew a licence subject to such conditions or restrictions as he thinks fit. (2) The Commissioner may impose conditions or restrictions being conditions or restrictions relating to- (a) the holding of a policy of indemnity insurance in a specified amount; or (b) terms upon which specified services are rendered. (3) A person who contravenes or fails to comply with any condition of or restriction applicable to his licence shall be guilty of an offence against this Act. 24. Security to be lodged in respect of dealer's licence . (1) The Commissioner shall not grant or renew a dealer's licence unless there is lodged with him a security in the sum of ten thousand dollars in respect of the licence. (2) A security required by this section shall be by cash deposit or by such other method as the Commissioner in any particular case allows. (3) The regulations may provide for the custody and investment of, and payment of interest on, any security by way of cash deposit lodged under this section. (4) A security lodged under this section shall be applied by the Commissioner subject to and in accordance with the regulations. (5) The regulations may provide that, subject to any terms and conditions prescribed, this section shall not apply to a person who is a stock broker or dealer within the meaning of any corresponding law. 25. Change of address, etc. (1) The holder of a dealer's licence or investment adviser's licence shall, upon any change in the address of the principal place of business at which he carries on the business in respect of which the licence is held, forthwith notify the Commissioner of the new address in the prescribed form and, upon ceasing to carry on that business, shall forthwith notify the Commissioner of that fact in the prescribed form.

Securities Industry Act 1971, No. 2 15 (2) Where the holder of a dealer's licence or investment adviser's licence is a corporation, the holder shall, upon any change in the directors, managers or secretary of the corporation forthwith notify the Commissioner of the change and give full particulars thereof. (3) The holder of a representative's licence who ceases to be a representative of the dealer or investment adviser in relation to whom the representative's licence was issued shall forthwith notify the Commissioner of that fact in the prescribed form. 26. Register of licensees . (1) The Commissioner shall keep in such form as he thinks fit a register of the holders of current licences, specifying (a) in relation to each holder of a dealer's or investment adviser's licence- (i) his name; (ii) the address of the principal place of business at which he carries on the business in respect of which the licence is held; and (iii) where the business is carried on under a name or style other than the name of the holder of the licence, the name or style under which the business is carried on; and (b) in relation to each holder of a representative's licence- (i) his name; (ii) the name of the dealer or investment adviser in relation to whom the licence was issued; and (iii) where the business of that dealer or investment adviser is carried on under a name or style other than the name of the dealer or investment adviser, the name or style under which that business is carried on. (2) Any person may, upon payment of the prescribed fee, inspect and take extracts from the register kept under subsection (1) of this section. (3) Except as provided in subsection (2) of this section, the power of inspection conferred by paragraph (a) of subsection (2) of section 12 of The Companies Acts 1961 to 1964 shall not apply in respect of a document filed or lodged with the Commissioner under this Act. 27. Period of licence . (1) Subject to subsection (2) of this section a licence shall expire one year after the date thereof. (2) A licence that has been renewed in accordance with the provisions of this Part shall continue in force for a period of twelve months next succeeding the date upon which but for its renewal it would have expired. 28. Power to court to cancel licence , etc. (1) The holder of a licence may be summoned before a magistrates' court within the meaning of Tile Justices Acts 1886 to 1968 constituted by a stipendiary magistrate sitting alone to show cause why his licence should not be cancelled and why he should not be disqualified either permanently or temporarily from holding such a licence- (a) in the case of an individual, on the ground that he is not a fit and proper person to hold the licence; or

16 Securities Industry Act 1971, No. 2 (b) in the case of a corporation, on the ground that the corporation is not a fit and proper person to hold the licence or that any director, manager or secretary of the corporation is not a fit and proper person to be a director, manager or secretary (as the case may be) of a corporation holding such a licence. (2) On being satisfied that a ground for cancellation of a licence has been established the court may order that the licence be cancelled and that the holder of the licence be disqualified either permanently or for such period as the court specifies from holding another such licence. (3) The Commissioner shall, before giving effect to an order made under subsection (2) of this section- (a) await the expiration of the time for appeal; or (b) where an appeal is lodged, await the decision of the court on the appeal, and, in the case referred to in paragraph (b) of this subsection, shall give effect to the decision of the court on the appeal. 29. Appeal. (1) A person who is aggrieved by a decision of the Commissioner under this Part or by a decision of a court under section 28 of this Act may within thirty days after that decision appeal to the District Court in accordance with rules of court. (2) Any appeal under this section shall be by way of rehearing and the decision of the court shall be final and shall be given effect to by the Commissioner. (3) Where there are no such rules of court, the appeal may be made in accordance with the directions of a judge of the District Court and such directions shall have effect as if they were rules of court. Division 2-Records 30. Application of Division . (1) This Division applies to a person who is- (a) a dealer; (b) a dealer's representative; (c) an investment adviser; (d) an investment representative; (e) a person in the direct employment of or acting for or on arrangement with a stock broker and who performs for such stock broker any of the functions of a dealer or investment adviser (other than work ordinarily performed by accountants, clerks or cashiers) whether his remuneration is by way of salary, wages or commission or otherwise; or (f) a financial journalist- but does not apply to a person who is resident in another State or in a Territory of the Commonwealth and who is required to comply with the provisions of a law of that State or Territory which corresponds to this Division. (2) In this Division " financial journalist " means a person who contributes advice concerning securities or prepares analyses or reports concerning securities for publication in a bona fide newspaper or periodical.

Securities Industry Act 1971, No. 2 17 (3) In this Division a reference to securities is a reference to securities of a corporation which is a public company under the law of any State or Territory of the Commonwealth and to securities which are quoted or dealt in on a stock exchange in Australia. 31. Register to be maintained . (1) A person to whom this Division applies shall maintain a register in the prescribed form of the securities in which he has an interest. (2) The register required to be kept under this Division shall be kept- (a) in the case of a person who is the holder of a licence under this Act, at such place in the State as he nominated in his application for a licence; and (b) in any other case , at the place in the State for the time being nominated by the person in a notice in writing lodged with the Commissioner. (3) Particulars of the securities in which a person to whom this Division applies has an interest and particulars of his interest in those securities shall be entered in the register within fourteen days of the acquisition of the interest or of the commencement of this Division (whichever last occurs). (4) Where there is a change (not being a prescribed change) in the interest or interests of a person to whom this Division applies in securities he shall enter in the register within fourteen days after the date of the change, full particulars of the change including the date of the change and the circumstances by reason of which that change has occurred. (5) For the purposes of subsection (4) of this section where a person acquires or disposes of securities there shall be deemed to be a change in the interest or interests of that person. (6) For the purposes of this section- (a) where the property subject to a trust consists of or includes securities and a person knows or has reasonable grounds for believing- (i) that he has an interest under the trust; and (ii) that the property subject to the trust consists of or includes those securities he shall be deemed to have an interest in those securities; (b) where a body corporate has an interest in securities and- (i) the body corporate is, or its directors are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instruction or wishes of a person in relation to those securities; or (ii) a person has, the associates of a person have, or a person and his associate have, a controlling interest in the body corporate- that person shall be deemed to have an interest in those securities; and (c) where a body corporate that has not more than twenty members has an interest in securities a person who is a member of the body corporate and an associate of such a person shall be deemed to have an interest in those securities.

18 Securities Industry Act 1971, No. 2 (7) For the purposes of paragraphs (b) and (c) of subsection (6) of this section , a person is an associate of another person if the first-mentioned person is- (a) a corporation that, by virtue of subsection (5) of section 6 of The Companies Acts 1961 to 1964 , is deemed to be related to that other person; (b) a person in accordance with whose directions , instructions or wishes that other person is accustomed or is under an obligation , whether formal or informal , to act in relation to the securities referred to in subsection (6) of this section; (c) a person who is accustomed or is under an obligation , whether formal or informal , to act in accordance with the directions, instructions or wishes of that other person in relation to those securities; (d) a body corporate that is, or the directors of which are, accustomed or under an obligation , whether formal or informal, to act in accordance with the directions , instructions or wishes of that other person in relation to those securities; or (e) a body corporate in accordance with the directions , instructions or wishes of which, or of the directors of which , that other person is accustomed or under an obligation , whether formal or informal , to act in relation to those securities. (8) In determining for the purposes of this section whether a person has an interest in a security the provisions of subsection (7) and subsections (8) to (14), both inclusive , of this section shall apply. (9) Where a right ( being a right or an interest described in the definition of " interest " in section 76 of The Companies Acts 1961 to 1964 or in the definition of that word in the corresponding provision of the law of another State or of a Territory of the Commonwealth)- (a) was issued or offered to the public for subscription or purchase, or where the public was invited to subscribe for or purchase such a right , and the right was so subscribed for or purchased; or (b) was issued for the purposes of an offer to the public by and is held by the management company, within the meaning of that section or corresponding provision that right does not constitute an interest in a security. (10) Where a person- (a) has entered into a contract to purchase securities; (b) has a right , otherwise than by reason of having an interest under a trust , to have securities transferred to himself or to his order , whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; (c) has the right to acquire securities or an interest in securities, under an option , whether the right is exercisable presently or in the future and whether on the fulfilment of a condition or not; or (d) is entitled ( otherwise than by reason of his having been appointed a proxy or representative to vote at a meeting of members of a corporation or of a class of its members) to exercise or control the exercise of a right attached to securities, not being securities of which he is the registered holder- that person shall be deemed to have an interest in those securities.

Securities Industry Act 1971, No. 2 19 (11) A person shall not be deemed not to have an interest in securities by reason only that he has the interest in the securities jointly with another person. (12) It is immaterial, for the purposes of determining whether a person has an interest in securities that the interest cannot be related to particular securities. (13) There shall be disregarded- (a) an interest in securities if the interest is that of a person who holds the securities as trustee having no beneficial interest; (b) an interest in securities of a person whose ordinary business includes the lending of money if he holds the interest only by way of security for the purposes of a transaction entered into in the ordinary course of business in connexion with the lending of money; (c) an interest of a person in securities being an-interest held by him by reason of his holding a prescribed office; and (d) a prescribed interest in securities being an interest of such person, or of the persons included in such class of persons, as is prescribed. (14) An interest in securities shall not be disregarded by reason only of- (a) its remoteness; (b) the manner in which it arose; or (c) the fact that the exercise of a right conferred by the interest is or is capable of being made subject to restraint or restriction. (15) It is a sufficient compliance with the provisions of subsections (1) to (4). (both inclusive) of this section if a dealer's interests in securities are recorded in the books required to be kept by him as a dealer under Part VI of this Act to the satisfaction of the Commissioner and in such a case any reference in this Division (other than the said subsections) to a register required to be kept pursuant to this section shall include the books wherein the interests are so recorded. 32. Person to whom Division applies to notify Commissioner. (1) A person to whom this Division applies shall give notice to the Commissioner in the prescribed form containing such particulars as are prescribed including the place at which he will keep the register of his interests in securities. (2) The notice shall be given- (a) in the case of a person who is required by this Act to hold a licence-as part of his application for the licence; or (b) in the case of any other person- (i) if the person is a person to whom this Division applies at the commencement of this Division within one month after that date; or (ii) if the person becomes a person to whom this Division applies after that commencement-within fourteen days after becoming such a person.

20 Securities Industry Act 1971, No. 2 (3) A notice required to be given by a person to whom paragraph (b) of subsection (2) of this section relates shall be given notwithstanding that the person has ceased to be a person to whom this Division applies before the expiration of the period referred to in that subsection. (4) A person who ceases to be a person to whom this Division applies shall give notice to the Commissioner of his so ceasing in the prescribed form within fourteen days of his so ceasing. Penalty: $250. 33. Defence to prosecutions . (1) It is a defence to a prosecution for failing to comply with section 31 of this Act if the defendant proves that his failure was due to his not being aware of a fact or occurrence the existence of which was necessary to constitute the offence and that- (a) he was not so aware on the date of the complaint or summons; (b) he became so aware less than fourteen days before the date of the complaint or summons; or (c) he became so aware not less than fourteen days before the date of the complaint or summons and complied with the relevant section within fourteen days after becoming so aware. (2) For the purposes of subsection (1) of this section, a person shall, in the absence of proof to the contrary, be presumed to have been aware at a particular time of a fact or occurrence of which a servant or agent of the person, being a servant or agent having duties or acting in relation to his master's or principal's interest or interests in the securities concerned, was aware at that time. (3) The operation of sections 23 and 24 of The Criminal Code is excluded in respect of the offence of failing to comply with section 31 of this Act. 34. Production and inspection of registers . (1) The Commissioner or any person authorized by him in that behalf may require any person to whom this Division applies to produce for inspection the register required to be kept pursuant to section 31 of this Act and the Commissioner or any person so authorized may make copies of or make extracts from, the Register. (2) Any person who fails to produce a register for inspection or fails to allow any person authorized by or under subsection (1) of this section so to do to make a copy of, or make extracts from, the register shall be guilty of an offence against this Act. 35. Name and address of financial journalist to be supplied . (1) The Commissioner or any person authorized by him in that behalf may by notice in writing require the proprietor or publisher of a newspaper or periodical to supply him with- (a) the name and address of the financial journalist who contributed any advice specified in the notice or prepared any analysis or report so specified; or (h) the names and addresses of all financial journalists who, during a period specified in the notice, contributed any advice, or prepared any analysis or report, being advice, or an analysis or report, published in a newspaper owned or published by that proprietor or publisher.

Securities Industry Act 1971, No. 2 21 (2) A proprietor or publisher of a newspaper or periodical who wilfully fails to comply with a notice under subsection (1) of this section shall be guilty of an offence against this Act. 36. Copy or extract of a register may be supplied . The Commissioner may supply a copy of a register required to be kept pursuant to section 31 of this Act or of any extract from such a register to any person who in the opinion of the Commissioner should in the public interest be informed of the dealing in securities disclosed in the register. PART V-CONDUCT OF SECURITIES BUSINESS' 37. Certain representations prohibited . (1) No person who is the holder of a licence shall represent or imply or knowingly permit to be represented or implied in any manner to any person that his abilities or qualifications have in any respect been approved by the Commissioner. (2) The statement that a person is the holder of a licence under this Act is not a contravention of this section. 38. Issue of contract notes. (1) A dealer shall, in respect of a transaction of sale or purchase of securities (not being a transaction entered into in the ordinary course of business at a stock market between stock brokers who are members of the stock exchange maintaining that stock market) forthwith issue a contract note that complies with subsection (2) of this section to the purchaser or vendor with or for whom he contracts whether as principal or agent. (2) A contract note issued by a dealer under subsection (1) of this section shall include- (a) the name or style under which the dealer carries on his business as a dealer and the address of the principal place at which he so carries on business; (b) where the dealer is dealing as principal with a person who is not the holder of a dealer's licence, a statement that he is so acting; (c) the name of the person with whom the dealer has entered into the contract; (d) the date on which the transaction took place and whether or not it took place in the ordinary course of business on a stock market; (e) the number or amount and description of the securities which are the subject of the contract; (f) the price per unit of the securities; (g) the amount of the consideration; (h) if any commission is charged, the amount thereof and, in the case of a dealer who is not a stock broker, the rate of commission; (i) the amounts of all stamp or other duties and taxes payable; (j) if any amount is to be added to or deducted from the settlement amount in respect of the right to a benefit purchased or sold together with the securities that amount and the nature of the benefit;

22 Securities Industry Act 1971, No. 2 (k) if information has been given to the dealer pursuant to section 41 of this Act, an endorsement to the effect that the securities have been sold short. 39. Disclosure of certain interests. Where, in a letter, circular or other communication issued by him, a dealer or investment adviser refers to any securities issued by a corporation or other person, he shall cause to be included in the letter, circular or other communication, in type not less legible than that used in the body thereof, a concise statement of the nature and extent of his interest (being a prescribed interest), if any, in the securities. 40. Dealings as principal . (1) A dealer shall not, as principal, deal in any securities with a person who is not a stock broker or the holder of a dealer's licence unless he first informs the person with whom he is dealing that he is acting in the transaction as principal and not as agent. (2) For the purposes of subsection (l) of this section dealings as principal include dealings on behalf of a corporation in which the dealer has and, where the dealer carries on the business of dealing in partnership, the dealer and his partners together have, a controlling interest. (3) Where a dealer has failed to comply with subsection (1) of this section in respect of a contract for the sale of securities by him, the purchaser of-the securities may, if he has not disposed of them, rescind the contract by a notice of rescission, in writing, given to the dealer within seven days after the receipt of the contract note and, where a dealer has failed to comply with that subsection in respect of a contract for the purchase of securities by him, the vendor of the securities may, in the like manner, rescind the contract. 41. Short selling . A person shall not- (a) as principal, instruct a dealer to sell securities of which that person is not, and is not entitled to become, the holder; or (b) as agent, instruct a dealer to sell securities of which, to that person's knowledge, his principal is not, and is not entitled to become, the holder, unless he so informs the dealer. Penalty: $2,000 or imprisonment for six months or both. PART VI-ACCOUNTS AND AUDIT 42. Application of Part . (1) This Part- (a) applies to and in relation to- (i) the business of a dealer who is a stock broker within the meaning of this Act whether that business is carried on in the State or elsewhere; and (ii) the business of a dealer who is not a stock broker within the meaning of this Act or of any corresponding law in so far as that business is carried on in the State; and (b) does not apply to or in relation to the business of a dealer who is a stock broker within the meaning of any corresponding law.

Securities Industry Act 1971, No. 2 23 (2) In this Part, unless the contrary intention appears, any reference to books, accounts, records, securities, trust accounts or business of or in relation to a dealer who carries on business in partnership shall be read and construed as a reference to books, accounts, records, securities, trust accounts or business (as the case requires) of or in relation to the partnership. 43. Accounts to be kept by dealers. (1) A dealer shall keep or cause to be kept in written or printed form in the English language such accounting and other records as will sufficiently explain the transactions and financial position of his business and enable true and fair profit and loss accounts and balance sheets to be prepared from time to time and shall cause those records to be kept in such a manner as to enable them to be conveniently and properly audited. (2) If accounting and other records are kept by a dealer at a place outside the State the dealer shall cause to be sent to and kept at a place in the State such statements and returns with respect to the business dealt with in those records as will enable to be prepared true and fair profit and loss accounts and balance sheets. (3) Subject to section 11 of the Evidence (Reproductions) Act1970, a dealer shall retain- (a) for a period of not less than seven years, the records referred to in subsection (1) of this section; and (b) for a period of not less than three years or such other period as may be prescribed in substitution therefor, every contract note received by him and a copy of every contract note issued by him. (4) Without affecting the generality of subsection (1) of this section, a dealer shall keep or cause to be kept- (a) a Bought and Sold Book recording the name of the buyer and seller respectively of every security bought or sold by the dealer in the course of his business;- (b) a Scrip Receipt Book containing copies of acknowledgments of receipt of securities received by the dealer from clients for sale or safe custody and clearly showing the name or names in which the particular securities are registered; (c) a Cash Book containing entries of all amounts paid or received by the dealer in the course of his business; (d) a Journal; (e) a Ledger or Ledgers showing all transactions- (i) with clients of the dealer; (ii) with other dealers; and (iii) in respect of nominal or private accounts; (f) a General Scrip Register recording the receipt and disposal by the dealer of all securities other than those dealt with in the Safe Custody Scrip Register; (g) a Safe Custody Scrip Register recording all securities held by the dealer for safe custody; and (h) an underwriting Register recording all underwriting and sub-underwriting transactions entered into by the dealer. (5) Every entry in a Safe Custody Scrip Register and in an Underwriting Register kept by a dealer shall be dated and initialled by the person making the entry.

24 Securities Industry Act 1971, No. 2 (6) For the purposes of this section any account or record required to be kept by a dealer may be kept either by making entries in a bound book or by recording the matters in question in any other manner. (7) Where any account or record required by this section to be kept by a dealer is not kept by making entries in a bound book, the dealer shall take reasonable precautions for guarding against falsification and for facilitating discovery of any falsification. 44. Certain moneys received by dealers to be paid into a trust account. (1) A dealer shall establish and keep in a bank or banks in the State one or more trust accounts designated or evidenced as such into which he shall pay- (a) all amounts (less any brokerage and other proper charges) which are received from or on account of any person (other than a stock broker) for the purchase of securities and are not attributable to securities delivered to the dealer before or within three bank trading days after receipt of such amounts; and (b) all amounts (less any brokerage and other proper charges) which are received for or on account of any person (other than a stock broker) from the sale of securities and are not paid to such person or as such person directs within three bank trading days after receipt of such amounts. (2) Moneys required by this section to be paid into a trust account shall be so paid within three bank trading days after they are received by the dealer. (3) A person who- (a) contravenes or fails to comply with any provision of this section shall be guilty of an offence against this Act and liable to a penalty not exceeding $500; or (b) with intent to defraud contravenes or fails to comply with any provision of this section shall be guilty of an offence against this Act and liable on conviction to a penalty not exceeding $1,000 or to imprisonment for not more than one year or to both such penalty and imprisonment. (4) Notwithstanding anything in this section where any moneys required by this section to be paid into a trust account are received by a dealer in another State or in a Territory of the Commonwealth those moneys may be paid into a trust account established and kept by the dealer in a bank in that State or Territory. (5) Nothing in this section requires a dealer to pay intc a trust account any moneys received from, for or on account of any person in any case where the dealer and such person ordinarily deal with each other on such terms, that in the absence of any special direction, all moneys paid to the former on account of the latter would properly be treated as an item in a debtor and creditor account between them and such a direction 'has not been given in respect of such moneys. (6) Section 3c (not including subsection (6) thereof) of The Trust Accounts Acts 1923 to 1959 shall apply to and in respect of a trust account established and kept under this section and where the trust account in question is the trust account of a dealer who is a stock broker, the said section 3c shall apply so that any power thereby conferred on the Public

Securities Industry Act 1971, No. 2 25 Curator may also be exercised by the committee of the stock exchange of which the stock broker is a member or, if he is a partner in a member firm, the stock exchange by which the firm is recognized and the said section 3c shall be read and apply accordingly. (7) Any trustee, or manager or principal officer or other officer of any bank, or any person authorized to operate on the trust account of a trustee (including any trustee who is authorized to operate on the trust account of another trustee) who knowingly acts contrary to section 3c of The Trust Accounts Acts 1923 to 1959 as applied by subsection (6) of this section shall be guilty of an offence against this Act and liable to a penalty not exceeding $500. 45. Purposes for which money may be withdrawn from trust account. A dealer shall not withdraw any moneys from a trust account except for the purpose of making a payment- (a) to the person entitled thereto or in accordance with the directions of that person; (b) to a stock. exchange in accordance with the provisions of section 61 of this Act; or (c) that is otherwise authorized by law. 46. Moneys in trust accounts not available for payment of debts, etc. Save as otherwise provided in this Part, moneys held in a trust account shall not be available for payment of the debts of a dealer or be liable to be paid or taken in execution under the order or process of any court. 47. Claims and liens not affected . Nothing in this Part shall be construed as taking away or affecting any lawful claim or lien which any person has against or upon any moneys held in a trust account or against or upon any moneys received for the purchase of securities or from the sale of securities before such moneys are paid-into a trust account. 48. Dealer to appoint auditor . A dealer shall appoint an auditor to audit his accounts and where for any reason the auditor ceases to hold that office the dealer shall within fourteen days appoint another such auditor. 49. Auditor's report. (1) In this section- financial year " in relation to a dealer means- (a) where the dealer is dot a corporation, the year ending on the thirtieth day of June; and (b) where the dealer is a corporation, the financial year of the corporation within the meaning of The Companies Acts 1961 to 1964; " prescribed day " in relation to a financial year of a dealer means- (a) where the dealer is not a corporation, the day that is two months after the end of that financial year; or (b) where the dealer is a corporation, the day that is three months after the end of that financial year, or where in either such case an extension of time is approved pursuant to subsection (3) of this section, the day on which the extended time expires.

26 Securities Industry Act 1971, No. 2 (2) A dealer shall, in respect of the financial year for the dealer beginning before and ending after- (a) the day on. which this Part commences; or (b) the day on which the dealer commences to carry on business as a dealer, whichever is the later day, and in respect of each financial year for the dealer thereafter, lodge with the relevant authority for the dealer, before the prescribed day for that financial year, an auditor's report containing the prescribed information. (3) An extension of the period of two months or, as the case may require, the period of three months, referred to in the definition of " prescribed day " in subsection (1) of this section may be approved- (a) by the relevant authority, where- (i) application for the extension is made by the dealer; (ii) the reasons for requiring the extension are special; and (iii) the extension does not exceed one month; or (b) by the Commissioner where- (i) the maximum extension has been approved pursuant to paragraph (a) of this subsection; and (ii) application for the extension is made by the dealer and his auditor with the concurrence, in the case of a dealer who is a stock broker, of the relevant authority, and any such approval may be given subject to conditions. (4) If a dealer fails to comply with the provisions of subsection (2) of this section, the relevant authority for the dealer shall forthwith report the matter to the Minister. 50. Auditor to send report to relevant authority in certain cases. Where in the performance of his duties as auditor for a dealer an auditor becomes aware of any matter which in his opinion may adversely affect the financial position of the dealer to a material extent or constitutes a breach of section 43, 44 or 45 of this Act he shall within seven days send a report in writing on such matter to the relevant authority and a copy thereof to the dealer. 51. Report of auditor to be forwarded to Minister in certain cases. (1) If, after consideration of an auditor's report furnished under section 50 of this Act, a relevant authority is not satisfied- (a) that the financial position of the dealer in respect of whom the report is made is such as to enable him to meet all his commitments as a dealer; and (b) that the dealer has complied with the requirements of this Act, the relevant authority shall, and for any other reason which the authority thinks proper may, forward the report to the Minister with any further report thereon which the authority thinks proper to make. (2) It shall be a defence to any proceedings in defamation in respect of any statement made in a report by an auditor under section 50 or 54 of this Act or in any further report made under subsection (1) of this section by a relevant authority if the defendant satisfies the Court that the statement was made in good faith and without ill-will to the person concerned or any other improper motive.

Securities Industry Act 1971, No. 2 27 52. Power to Minister to appoint independent auditor . (1) Where the Minister has received- (a) a report under subsection (4) of section 49 of this Act from a relevant authority; or (b) an auditor's report forwarded to him pursuant to section 51 of this Act by a relevant authority, he may, if he is satisfied that it is in the interests of the dealer concerned, the dealer's clients or the public generally to do so, appoint in writing an independent auditor to examine, audit and report either generally or in relation to any particular matter upon the books, accounts and records of and securities held by the dealer. (2) Where the Minister is of opinion that the whole or any part of the costs and expenses of an auditor appointed by him under this section should be borne by the dealer or relevant authority concerned, he may, by order in writing, direct the dealer or relevant authority to pay a specified amount, being the whole or part of those costs and expenses, within the time and in the manner specified. (3) Where a dealer or relevant authority has failed to comply with an order of the Minister under subsection (2) of this section, the amount specified in the order may be recovered in a court of competent jurisdiction as a debt due to the Crown. 53. Power to Minister to appoint independent auditor upon application of client . (1) Upon receipt of an application in writing from a person who alleges that a dealer has failed to account to him in respect of any moneys or securities held or received by that dealer for or on his behalf, the Minister may appoint in writing an independent auditor to examine, audit and report either generally or in relation to any particular matter upon the books, accounts and records of and securities held by that dealer. (2) Every application under subsection (1) of this section shall state- (a) particulars of the circumstances under which the dealer received the moneys or securities in respect of which he is alleged to have failed to account; (b) particulars of those moneys or securities and of the transactions of the applicant and the dealer relating thereto; and (c) such other particulars as are prescribed. (3) Every statement in any such application shall be verified by a statutory declaration made by the applicant and shall, if made in good faith and without ill-will to the person concerned or any other improper motive, be privileged. (4) The Minister shall not appoint an independent auditor under subsection (1) of this section unless he is satisfied- (a) that the applicant has good reason for making the application; and (b) that it is expedient in the interests of the dealer or the applicant or the public generally that the books, accounts and records of and securities held by the dealer should be examined, audited and reported upon.

28 Securities Industry Act 1971, No. 2 54. Auditor to report to Minister . An auditor appointed by the Minister under section 52 or 53 of this Act shall, upon the conclusion of the examination and audit in respect of which he was appointed, make a report thereon to the Minister. 55. Powers of auditors . An auditor appointed by the Minister to examine and audit the books, accounts and records of and securities held by a dealer may for the purpose of carrying out the examination and audit- (a) examine on oath the dealer concerned and, where the dealer carries on business in partnership, any of the members of the partnership and any of the dealer's servants and agents and, where the dealer carries on business in partnership, any of the firm's servants and agents and any other auditor appointed under this Act in relation to those books, accounts, records and securities; (b) employ such persons as he considers necessary; and (c) by instrument in writing under his hand authorize any person employed by him to do, in relation to the examination and audit, any act or thing that he could himself do in his capacity as auditor, except to examine any person on oath or to exercise the powers conferred by this paragraph. 56. As to right of auditors and employees to communicate certain matters. Except for the purpose of carrying into effect the provisions of this Act or so far as may be required for the purpose of any proceedings, civil or criminal, an auditor appointed by the Minister under section 52 or 53 of this Act and an employee of any such auditor shall not communicate any matter which may come to his knowledge in the performance of his duties as such an auditor or employee to any person other than the Minister, the relevant authority in relation to the dealer concerned, any other person specified by the Minister or that relevant authority and, in the case of an employee, the auditor by whom he is employed. 57. Books, accounts and records to be produced upon demand. (1) Upon request by an auditor appointed by the Minister under section 52 or 53 of this Act or by a person who produces a written authority in that behalf given under paragraph (c) of section 55 of this Act- (a) a dealer and, where the dealer carries on business in partnership, the other members of the partnership and the dealer's servants and agents and, where the dealer carries on business in partnership, any of the firm's servants and agents shall produce any books, accounts and records of and securities held by the dealer relating to his business; and (b) an auditor appointed by a dealer shall produce any books, accounts and records held by him relating to the business of the dealer. (2) A dealer and, where the dealer carries on business in partnership, the other members of the partnership and the dealer's servants and agents and, where the dealer carries on business in partnership, any of the firm's servants and agents and any auditor appointed by the dealer shall answer all questions relevant to an examination and audit which are put to him

Securities Industry Act 1971, No. 2 29 by an auditor appointed by the Minister under section 52 or 53 of this Act or by a person who produces a written authority in that behalf given under paragraph (c) of section 55 of this Act. Penalty: $1,000 or imprisonment for one year, or both. 58. Penalty for destroying concealing or altering records or sending records or other property out of the State . (1) A person who, with intent to defeat the purposes of this Part or with intent to prevent, delay or obstruct the carrying out of any examination or audit under this Part- (a) destroys, conceals or alters any book, account, record or document relating to the business of a dealer; or (b) sends or attempts to send or conspires with any other person to send out of the State any such book, account, record or document or any property of any description belonging to or in the disposition of or under the control of a dealer, shall be guilty of an offence against this Act. Penalty: $1,000 or imprisonment for one year, or both. (2) If in a prosecution for an offence under subsection (1) of this section it is proved that the person charged- (a) destroyed, concealed or altered any book, account, record or document aforesaid; or (b) sent or attempted to send or conspired to send out of the State any such book, account, record or document or any property aforesaid, the onus of proving that in so doing he did not act with intent to defeat the purposes of this Part or with intent to prevent, delay or obstruct the carrying out of an examination or audit under this Part shall lie on him. 59. Right of committee to impose obligations , etc., on members not affected by this Part.. Nothing contained in this Part shall prevent the committee of a stock exchange imposing on the members of that stock exchange any further obligations or requirements which the committee thinks fit with respect to- (a) the audit of accounts (including the audit of accounts by an auditor appointed by the committee); (b) the information to be furnished in reports from auditors; or (c) the keeping of accounts, books and records. PART VII-INVESTMENT OF STOCK BROKER'S TRUST FUNDS 60. Interpretation . In this Part- prescribed day " means- (a) in relation to a stock broker who was carrying on business as a stock broker at the coming into operation of section 44 of this Act and is so carrying on business on the quarter day next succeeding that coming into operation-the day next following that quarter day; and (b) in relation to a stock broker who commences to carry on business as a stock broker after the coming into operation of section 44 of this Act and is so carrying on business on the quarter day next succeeding the day on which he commences so to carry on business-the day next following that quarter day.

30 Securities Industry Act 1971, No. 2 " quarter day " means the last day of the months of March, June, September and December; " relevant period "' means-- (a) in relation to a stock broker referred to in paragraph (a) of the definition of " prescribed day " in this section-the period of three months ending on the quarter day next succeeding the commencement of section 44 of this Act; and (b) in relation to a stock broker referred to in paragraph (b) of that definition-the period of three months ending on the quarter day next succeeding the day on which he commences to carry on business as a stock broker. 61. Certain moneys to be deposited with stock exchange . (1) A stock broker shall, out of the moneys that are received by him or by any firm of which he is a member and are required to be dealt with in accordance with section 44 of this Act- (a) cause to be deposited with the stock exchange of which he is a member or by which his firm is recognized on or before the prescribed day for the stock broker, an amount that is not less than the prescribed part of the lowest balance in excess of nil in his, or the firm's trust account during the relevant period for the stock broker; and (b) thereafter, during each period of three months ending on a quarter day, cause to be kept deposited'with that stock exchange an amount that is not at any time less than the prescribed part of the aggregate of- (i) the amount that was the lowest balance in excess of nil in his, or the firm's, trust account on any day during that period or the immediately preceding period of three months ending on a quarter day; and (ii) an amount that, on the day on which the lowest balance or aggregate is ascertained for the purposes of subparagraph (i) of this paragraph, was standing upon deposit by the stock broker or firm with that stock exchange in accordance with this section. (2) Where two or more trust accounts are kept under section 44 of this Act on any day by a stock broker or member firm , the aggregate of the balances of those trust accounts on that day shall, for the purposes of subsection (1) of this section, be deemed to be the balance in the trust account of that stock broker or that member firm on that day. (3) The prescribed part of the amount , or aggregate of the amounts, referred to in subsection (1) of this section shall be two-thirds of that amount or aggregate , or such lesser fraction as may be prescribed. (4) Nothing in this section requires a stock broker- (a) to comply with paragraph (a) of subsection (1) of this section if the lowest balance referred to therein is less than three thousand dollars; or (b) to comply with paragraph (b) of that subsection if the aggregate amount referred to therein is less than three thousand dollars.

Securities Industry Act 1971, No. 2 31 (5) Subject to subsection (4) of this section, where a stock broker fails to comply with subsection (1) of this section he and, if he is a partner in a member firm, each of the partners in the firm, is guilty of an offence against this Act and liable to a penalty not exceeding $500 and a further penalty not exceeding $100 for every day during which the offence continues. 62. Certain moneys to be held by stock exchange on trust . (1) All money deposited with a stock exchange pursuant to this Part shall be held by the stock exchange upon trust for the stock broker or member firm on whose behalf it was deposited, shall be repaid to the stock broker or member firm on demand and the fidelity fund of the Stock Exchange shall guarantee the repayment thereof. (2) The fact that money referred to in subsection (1) of this section is repayable on demand does not affect the obligation of a stock broker under section 61 of this Act. 63. Investment of certain moneys by stock exchange . (1) Until repayment thereof is demanded, money deposited with a stock exchange under section 61 of this Act shall be invested by the stock exchange either on deposit with a bank in Queensland bearing interest or upon loan to the Treasurer at a rate of interest not less than the maximum rate for the time being payable by a bank in Queensland on a fixed deposit and any moneys so lent to the Treasurer shall be repayable by him on demand. (2) The interest earned from investments made by a stock exchange under subsection (1) of this section shall be paid to the fidelity fund of the stock exchange established under Part VIII of this Act. 64. As to deposits repaid . A deposit repaid pursuant to section 62 of this Act shall be paid forthwith by the depositor into his. trust account and if the deposit is not so paid the depositor, or where the depositor is a member firm each of the partners in the firm, shall be guilty of an offence against this Act. 65. Accounts of deposits . (1) A stock exchange shall establish and keep proper accounts of all deposits and shall, as soon as practicable after each quarter day, cause a balance sheet to be made out as at that quarter day. (2) The committee of a stock exchange shall appoint an auditor to audit the accounts of the stock exchange relating to deposits. (3) The auditor appointed by the committee of a stock exchange shall regularly and fully audit the accounts of the stock exchange relating to deposits and shall audit each balance sheet and cause it to be laid before the committee not later than one month after the balance sheet is made out. 66. Claims, etc., not affected by this Part . Nothing done under this Part shall affect- (a) any claim or lien which a depositor has upon or in relation to any deposit; or (b) the rights or remedies of any person other than a depositor.

32 Securities Industry Act 1971, No. 2 PART VIII-FIDELITY FUNDS 67. Interpretation . In this Part, unless the contrary intention appears- committee " in relation to a fidelity fund of a stock exchange means the committee of that exchange; " stock exchange " in relation to a fidelity fund means the stock exchange which established the fund. 68. Establishment of fidelity funds. (1) A stock exchange shall establish and keep a fidelity fund which shall be administered by the committee on behalf of the stock exchange. (2) The assets of a fidelity fund shall be the property of the stock exchange but shall be kept separate from all other property of the stock exchange for the purposes set out in this Part. 69. Moneys constituting fidelity fund . The fidelity fund of a stock exchange shall consist of- (a) all moneys paid to the stock exchange by stock brokers in accordance with the provisions of this Part; (b) the interest on moneys invested by the stock exchange under section 63 of this Act; (c) the interest and profits from time to time accruing from the investment of the fund; (d) all moneys paid to the fund by the stock exchange; (e) all rhoneys recovered by or on behalf of the stock exchange in the exercise of any right of action conferred by this Part; (f) all moneys paid by an insurer pursuant to a contract of insurance or indemnity entered into by the stock exchange under section 89 of this Act; and (g) all other moneys lawfully paid into the fund. 70. Fund to be kept in separate bank account . All moneys forming part of a fidelity fund shall, pending the investment or application thereof in accordance with this Part, be paid or transferred into a bank in the State to the credit of a separate account. 71. Payments out of fund . Subject to this Part, there shall from time to time be paid out of the fidelity fund of a stock exchange as required and in such order as the committee deems proper- (a) the amount of all claims, including costs, allowed by the committee or established against the stock exchange under this Part; (b) all legal and other expenses incurred in investigating or defending claims made under this Part or incurred in relation to the fund or in the exercise by the committee of the rights, powers and authorities vested in it by this Part in relation to the fund; (c) all premiums payable in respect of contracts of insurance or indemnity entered into by the committee under section 89 of this Act;

Securities Industry Act 1971, No. 2 33 (d) the expenses incurred or involved in the administration of the fund including the salaries and wages of persons employed by the committee in relation thereto; and (e) all other moneys payable out of the fund in accordance with the provisions of this Act. 72. Accounts of fund . (1) A stock exchange shall establish and keep proper accounts of its fidelity fund and shall before the thirty-first day of August in each year cause a balance sheet in respect of those accounts to be made out as at the preceding thirtieth day of June. (2) The committee of a stock exchange shall appoint an auditor to audit the accounts of the fidelity fund of the stock exchange. (3) The auditor appointed by the committee shall regularly and fully audit the accounts of the fidelity fund and shall audit each balance sheet and cause it to be laid before the committee not later than one month after the balance sheet was made out. 73. Management sub-committee . (1) The committee may appoint a management sub-committee of not less than three and not more than five persons being members of the stock exchange, one at least being also a member of the committee. (2) The committee may by resolution delegate to a sub-committee appointed by it under this section all or any of its powers, authorities, duties and functions under this Part (other than under this section, section 76, subsections (4), (5) and (6) of section 79 and section.81). (3) Any power, authority, duty or function delegated under this section may be exercised by members forming a majority of the sub-committee as if by this Part that power, authority, duty or function had been conferred on a majority of the members of the sub-committee. (4) Any delegation under this section may at any time be rescinded or varied. (5) The committee may at any time remove any member of a sub-committee appointed by it under this section and may fill any vacancy in the sub-committee howsoever arising. 74. Contributions to fund. (1) A person shall not be admitted to membership of a stock exchange or to partnership in a member firm until he has paid to the stock exchange or, in the case of a member firm, the stock exchange by which the firm is recognized as a contribution to its fidelity fund such amount being not less than $100 as is determined by the stock exchange. (2) A stock broker shall on or before the thirty-first day of March in each year pay to the stock exchange of which he is a member or. if he is a partner in a member firm, the stock exchange by which the firm is recognized as a contribution to its fidelity fund such amount, being not less than $100 as is determined by the stock exchange. 75. Provisions if fund exceeds $500 ,000. (1) In the event of the fidelity fund of a stock exchange amounting to a sum exceeding $500,000- (a) every stock broker who has made twenty annual contributions to the fund, and in respect of whom no payment from the fund has been mode or (if any such payment has been made) 2

34 Securities Industry Act 1971, No. 2 the fund has been fully reimbursed, shall subject to subsection (4) of this section be freed and discharged from further annual contributions to the fund; (b) on the retirement from business of a stock broker referred to in paragraph (a) of this subsection, the committee of the stock exchange of which he was a member or, where he was a partner in a member firm, the stock exchange by which the firm was recognized may, in its discretion, cause to be paid to him the total amount of annual contributions made by him to the fund or such proportion thereof as is for the time being determined by the committee either generally or in relation to the particular stock broker; and (c) on the death of a stock broker so referred to without any payment having been made to him under paragraph (b) of this subsection, the committee may in its discretion make such a payment either to his legal representative or to his widow or any dependant or dependants. (2) Any determination of a committee under paragraph (b) of subsection (1) of this section shall be in writing and may be in respect of all or any class of stock brokers or any particular stock broker. (3) The committee may by notice in writing published in the Gazette- (a) suspend the operation of paragraph (b) or (c) of subsection (1) of this section; or (b) revoke any such suspension, but where the operation of one of those paragraphs is for the time being suspended the committee shall not suspend the operation of the other. (4) If the amount of the fidelity fund of a stock exchange that exceeded $500,000 is reduced below the sum of $250,000, the committee may determine that a stock broker who has been freed and discharged from payment under subsection (1) of this section shall again be required, to such extent as it thinks fit, to pay annual contributions under section 74 of this Act and the stock broker shall thereupon be liable to make contributions in accordance with that determination. 76. Levy in addition to annual contributions . (1) If at any time the fidelity fund of a stock exchange is not sufficient to satisfy the liabilities that are then ascertained of the stock exchange in relation thereto, the committee may impose on every stock broker liable to contribute to that fund a levy of such amount as it thinks fit, not exceeding $500, for payment into the fund. (2) The amount of a levy under this section shall be paid within the time and in the manner specified by the committee either generally or in relation to any particular case. (3) No stock broker shall be required to pay by way of levy under this section more than $5,000 in the aggregate, or more than $1,000 in any period of twelve months. 77. Power to stock exchange to make advances to fund . (1) A stock exchange may from time to time from its general funds give or advance on such terms as the committee thinks fit any sums of money to its fidelity fund.

Securities Industry Act 1971, No. 2 35 (2) Any moneys advanced under subsection (1) of this section may from time to time be repaid from the fidelity fund to the general funds of the stock exchange. 78. Investment of fund . Any moneys in a fidelity fund of a stock exchange that are not immediately required for its purposes may be invested by the committee in any manner in which trustees are for the time being authorized by law to invest trust funds or upon deposit with any corporation that is declared by the Governor in Council, pursuant to paragraph (b) of subsection (7) of section 38 of The Companies Acts 1961 to 1964 to be an authorized dealer in the short term money market. 79. Application of fund . (1) Subject to this Part, a fidelity fund shall be held and applied for the purpose of compensating persons who suffer pecuniary loss- (a) from any defalcation committed by a sole trader who is liable to contribute to that fund, whether or not he has been freed and discharged from payment under section 75 of this Act, or by any of his clerks or servants in relation to any money or other property which, whether before or after the commencement of this Part, in the course of or in connexion with the sole trader' s business- (i) was entrusted to or received by the sole trader or any of his clerks or servants for or on behalf of any other person; or (ii) (the sole trader being in respect of the money or other property either the sole trustee or, a trustee with another person) was entrusted to or received by the sole trader or any of his clerks or servants as trustee or for or on behalf of the trustees of the said money or property; or (b) from any defalcation committed by the partners or by any of the partners in a member firm who are liable to contribute to that fund, whether or not they have been freed and discharged from payment under section 75 of this Act, or by any of the clerks or servants of such a member firm in relation to any money or other property which, whether before or after the commencement of this Part, in the course of or in connexion with the business of that firm- (i) was entrusted to or received by the partners or any of the partners or any of the firm's clerks or servants for or on behalf of any other person; or (ii) (the partners or any of the partners being in respect of the money or other property either the sole trustee or trustee or trustees with any other person or persons) was entrusted to or received by the partners or any of the partners or any of the firm's clerks or servants as trustee or trustees or for or on behalf of the trustees of the money or property. (2) Where no right to compensation arises under paragraph (a) or (b) of subsection (1) of this section or where such a right arises then subject to application of the fund in accordance with the provisions of this Part in satisfaction thereof in priority, a fidelity fund may, subject to this Part, be applied for the purpose of paying to the Official Receiver in Bankruptcy an amount not greater than the amount that he certifies is required to make up or reduce the total deficiency arising by reason of the available assets of a bankrupt sole trader or partner in a member firm being .insufficient to satisfy the admitted claims, arising out of transactions in securities, of creditors of the sole trader or partner.

36 Securities Industry Act 1971, No. 2 (3) Save as otherwise provided in this section the total amount that may be paid under this Part- (a) to all persons who suffer loss through defalcations by any sole trader and through defalcations by any of his clerks or servants; (b) to all persons who suffer loss through defalcations by the partners or any of the partners in a member firm and through defalcations by any of the firm's clerks or servants; or (c) to the Official Receiver in Bankruptcy, shall not in any event exceed in respect of that sole trader or that member firm the sum of $200,000 but for the purposes of this subsection any amount paid from a fidelity fund shall to the extent to which the fund is subsequently reimbursed therefor be disregarded. (4) If after taking into account all ascertained or contingent liabilities of the fidelity fund of a stock exchange the committee of the stock exchange considers that the assets of the fund so permit the committee may from time to time by notice that it causes to be published in the Gazette increase the total amount which may be applied from that fund pursuant to the provisions of subsection (3) of this section and from the date of that publication until the notice is revoked or varied the amount specified in the notice shall be the maximum total amount which may be applied as aforesaid. _ (5) A notice under subsection (4) of this section may be revoked or varied by the committee by notice published in the Gazette and a notice which is so varied shall have effect accordingly. (6) If in any particular case after taking into account all ascertained or contingent liabilities of the fidelity fund of a stock exchange the committee of the stock exchange considers that the assets of the fund so permit the committee may apply out of the fund such sum in excess of the total amount limited by or under this section as the committee in its absolute discretion thinks fit in or towards the compensation of persons who have suffered pecuniary loss as provided in subsection (1) of this section or in making a payment under subsection (2) of this section. (7) For the purposes of this section "sole trader" or "partner in a member firm " includes a person who has been, but at the time of any defalcation or bankruptcy in question has ceased to be, a sole trader or a partner in a member firm if, at the time of the defalcation or bankruptcy the person claiming compensation or, as the case may be, the creditor had reasonable grounds for believing that person to be a sole trader or a partner in a member firm. 80. As to claims against fund . (1) Subject to this Part every person who suffers pecuniary loss as provided in subsection (1) of section 79 of this Act shall be entitled to claim compensation from the appropriate fidelity fund and to take proceedings in the Court as hereinafter provided against the stock exchange to establish the claim. (2) Subject to subsection (3) of this section, a person shall in no case have any claim against a fidelity fund in respect of- (a) a defalcation committed before the commencement of this Part; or

Securities Industry Act 1971, No. 2 37 (b) a defalcation in respect of money or other property which prior to the commission of the defalcation had in the due course of the administration of a trust ceased to be under the sole control of the sole trader concerned or in the case of a member firm of the partner or partners concerned. (3) Upon the amalgamation of The Brisbane Stock Exchange Fidelity Fund, maintained pursuant to the rules of The Brisbane Stock Exchange, with the fidelity fund of The Brisbane Stock Exchange established under this Act, the fidelity fund so established shall be liable, in the manner and to the extent provided by those rules before any amendment thereof required to enable the amalgamation to be effected, for claims against The Brisbane Stock Exchange Fidelity Fund arising before that amalgamation. (4) Subject to this Part the amount which any claimant shall be entitled to claim as compensation from a fidelity fund shall be the amount of the actual pecuniary loss suffered by him (including the reasonable costs of and disbursements incidental to the making and proof of his claim) less the amount or value of all moneys or other benefits received or receivable by him from any source other than the fidelity fund in reduction of the loss. (5) In addition to any compensation payable under this Part, interest shall be payable out of a fidelity fund concerned on the amount of the compensation, less any amount attributable to costs and disbursements, at the rate of five per centum per annum calculated from the day upon which the defalcation was committed and continuing until the day upon which the claim is satisfied. 81. Rights of innocent partner in relation to fund . (I) Where all persons submitting claims pursuant to section 80 of this Act have been fully compensated in accordance with the provisions of this Part for the loss suffered by them as a result of a defalcation committed by a partner in a member firm any other partner in that firm who has made payment to any person in compensation for loss suffered by him from the defalcation shall be subrogated to the extent of that payment to all the rights and remedies of that person against the fidelity fund concerned if the committee is of opinion having regard to all the circumstances that he was in no way a party to the defalcation and that he acted honestly and reasonably in the matter. (2) If any partner in a member firm feels aggrieved by the opinion of a committee under subsection (1) of this section he may within twenty-eight days after receipt of notice thereof appeal to the Court in accordance with rules of court but where there are no such rules of court, the appeal may be made in accordance with the directions of a Judge of the Court and such directions shall have effect as if they were rules of court. (3) An appellant shall, on the same day as he lodges notice of appeal with the Court, lodge a copy thereof with the secretary of the committee against whose opinion he is appealing. (4) The Court shall inquire into and decide upon the appeal which shall be in the nature of a re-hearing and, if the Court is of opinion having regard to all the circumstances that the appellant was in no way a party to the defalcation and that he acted honestly and reasonably in

38 Securities Industry Act 1971, No. 2 the matter, it may direct that the appellant shall to the extent of any payment made by him be subrogated to all rights and remedies in relation to the fidelity fund concerned of the person to whom he has made payment in compensation as aforesaid. 82. Notice of calling for claims against fund . (1) The committee of a stock exchange may cause to be published in a daily newspaper published and circulating generally in the State a notice, in or to the effect of the form prescribed, specifying a date, not being earlier than three months after publication of the notice, on or before which claims for compensation from the fidelity fund of the stock exchange, in relation to the person specified in the notice, may be made. (2) A claim against a fidelity fund in respect of a defalcation or bankruptcy shall be made in writing to the committee- (a) where a notice under subsection (1) of this section has been published, on or before the date specified in the notice; or (b) where no such notice has been published-within six months after the claimant became aware of the defalcation or, as the case may be, within six months after the bankruptcy, and any claim which is not so made shall be barred unless the committee otherwise determines. (3) No action for damages shall lie against a stock exchange or against any member or employee of a stock exchange or of a committee or management sub-committee by reason of any notice published for the purposes of this section in good faith without ill-will towards the person concerned or any other improper motive. 83. Power to committee to settle claims . (1) The committee may, subject to this Part, allow and settle any proper claim against the fidelity fund of the stock exchange at any time after the commission of the defalcation, or after the bankruptcy, in respect of which the claim arose. (2) Subject to subsection (3) of this section, a person shall not commence proceedings under this Part against a stock exchange without leave of the committee of the stock exchange or of the Court unless- (a) the committee has disallowed his claim; and (b) the claimant has exhausted all relevant rights of action and other legal remedies for recovery of the money or other property in respect of which the defalcation was committed available against the sole trader or the partners in the member firm in relation to whom or to which the claim arose and all other persons liable in respect of the loss suffered by the claimant. (3) A person who has been refused leave by a committee to commence proceedings against a stock exchange under this Part may,. in accordance with rules of court, apply to the Court for that leave, and the Court may make such order in the matter as it thinks fit. Where there are no such rules of court, the application may be made in accordance with the directions of a Judge of the Court and such directions shall have effect as if they were rules of court. (4) A committee after disallowing (whether wholly or partly) any claim against a fidelity fund shall serve notice of the disallowance in the prescribed form on the claimant or his solicitor.

Securities Industry Act 1971, No. 2 39 (5) No proceedings against a stock exchange in respect of a claim which has been disallowed by the committee of the stock exchange shall be commenced after the expiration of three months after service of notice of disallowance under subsection (4) of this section. (6) In any proceedings brought to establish a claim against the fidelity fund of a stock exchange evidence of any admission or confession by or other evidence which would be admissible against the stock broker or other person by whom it is alleged a defalcation was committed shall be admissible to prove the commission of the defalcation notwithstanding that the stock broker or other person is not the defendant in or a party to those proceedings, and all defences which would have been available to that stock broker or person shall be available to the stock exchange. (7) The committee of a stock exchange or, where proceedings are brought to establish a claim against the fidelity fund of the stock exchange, the Court, if satisfied that the defalcation on which the claim was founded was actually committed, may allow the claim and act accordingly, notwithstanding that the person who committed the defalcation has not been convicted or prosecuted therefor or that the evidence on which the committee or Court (as the case may be) acts would not be sufficient to establish the guilt of that person upon a trial in respect of the defalcation. 84. Form of order of Court establishing claim . (1) Where in any proceedings brought to establish a claim against the fidelity fund of a stock exchange the Court is satisfied that the defalcation on which the claim is founded was actually committed and that otherwise the claimant has a valid claim the Court shall by order- (a) declare the fact and the date of the defalcation and the amount of the claim; and (b) direct that the committee concerned allow the claim as so declared and deal with it in accordance with the provisions of this Part. (2) Any proceedings brought to establish a claim against the fidelity fund of a stock exchange shall be by action against the stock exchange as for a debt due by the stock exchange and, in any such action, all defences that would have been available to the stock broker in relation to whom the claim arose shall be available to the stock exchange, and all questions of costs shall be in the discretion of the Court. 85. Power to committee to require production of securities , etc. The committee may at any time and from time to time require any person to produce and deliver any securities, documents or statements of evidence necessary to support any claim made against the fidelity fund of the stock exchange or necessary for the purpose either of exercising its rights against a sole trader or the partners in a member firm or any other person concerned or of enabling criminal proceedings to be taken against any person in respect of a defalcation and, in default of delivery of any such securities, documents or statements of evidence, the committee may disallow any claim under this Part made by the person required to produce and deliver them.

40 Securities Industry Act 1971, No. 2 86. Subrogation of stock exchange to rights, etc., of claimant upon payment from fund . On payment out of its fidelity fund of any moneys in respect of any claim under this Part a stock exchange shall be subrogated to the extent of that payment to all the rights and remedies of the claimant in relation to the loss suffered by him from the defalcation on which the claim was based. 87. Payment of claims only from fund . No moneys or other property belonging to a stock exchange other than the fidelity fund shall be available for the payment of any claim under this Part whether the claim is allowed by the committee or is made the subject of an order of the Court. 88. Provision where fund insufficient to meet claims or where claims exceed total amount payable . (1) Where the amount at credit in the fidelity fund of a stock exchange is insufficient to pay the whole amount of all claims against it which have been allowed or in respect of which orders of the Court have been made, then the amount at credit in the fund shall, subject to subsection (2) of this section, be apportioned between the claimants in such manner as the committee thinks equitable, and any such claim so far as it then remains unpaid shall be charged against future receipts of the fund and paid out of the fund when moneys are available therein. (2) Where the aggregate of all claims against the fidelity fund of a stock exchange which have been allowed or in respect of which orders of the Court have been made in relation to defalcations by or in connexion with a sole trader or member firm exceeds the total amount which may pursuant to subsection (3) of section 79 of this Act be paid under this Part in respect of that sole trader or member firm, that total amount shall be apportioned between the claimants in such manner as the committee of the stock exchange thinks equitable and, upon payment out of the fund of the said total amount in accordance with that apportionment, all such claims and any orders relating thereto and all other claims which may thereafter arise or be made in respect of defalcations by or in connexion with that sole trader or member firm shall be absolutely discharged. 89. Power to committee to enter into contracts of insurance. (1) A stock exchange may in its discretion enter into any contract with any person or body of persons corporate or unincorporate carrying on fidelity insurance business in the State whereby the stock exchange will be insured or indemnified to the extent and in the manner provided by such contract against liability in respect of claims under this Part. (2) A contract referred to in subsection (1) of this section may be entered into in relation to stock brokers generally, or in relation to any particular stock broker or stock brokers named therein, or in relation to stock brokers generally with the exclusion of any particular stock broker or stock brokers named therein. (3) No action shall lie against a stock exchange or against any member or servant of a stock exchange or committee or against any member of a management sub-committee for injury alleged to have been suffered by any stock broker by reason of the publication in good faith of a statement that any contract entered into under this section does or does not apply with respect to him.

Securities Industry Act 1971, No. 2 41 90. Application of insurance moneys. No claimant against the fidelity fund of a stock exchange shall have any right of action against any person or body of persons with whom a contract of insurance or indemnity is made under this Part in respect of that contract, or have any right or claim with respect to any moneys paid by the insurer in accordance with any such contract. PART IX-TRADING IN SECURITIES 91. False trading and markets. A person shall not create or cause to be created or do anything which is calculated to create, a false or misleading appearance of active trading in any securities on any stock market in the State, or a false or misleading appearance with respect to the market for, or the price of, any securities. 92. Market rigging transactions . (1) A person shall not effect, take part in, be concerned in or carry out, either directly or indirectly, any transactions in any class of securities which have the effect of raising or lowering the price of securities of that class for the purpose of inducing the purchase or sale of securities of that class by others. (2) It shall be a defence to a prosecution under subsection (1) of this section if the defendant proves that he acted without malice and solely to further or protect his own lawful interests. (3) A person shall not, in consideration or anticipation of a reward or benefit, circulate or disseminate, or authorize or be concerned in the circulation or dissemination of, any statement or information to the effect that the price of any securities will or is likely to rise or fall because of any act that to his knowledge is or would be a contravention of subsection (1) of this section. 93. Affecting market price by fictions. (1) A person shall not by means of purchases or sales of any securities involving no change in the beneficial ownership of those securities, or by any fictitious transactions or devices inflate, depress or cause fluctuations in, the market price of any securities. (2) A purchase or sale of securities involves no change in beneficial ownership within the meaning of subsection (1) of this section if a person who held an interest in the securities before the purchase or sale or a person associated with the first-mentioned person in relation to those securities holds an interest in the securities after the purchase or sale. (3) In determining whether a person held or holds an interest within the meaning of subsection (2) of this section the provisions of section 31 of this Act shall be applied. (4) For the purposes of subsection (2) of this section a person is associated with another person in relation to securities if the first- mentioned person is- (a) a corporation that by virtue of subsection (5) of section 6 of The Companies Acts 1961 to 1964 is deemed to be related to that other person; (b) a person in accordance with whose directions, instructions or wishes that other person is accustomed or is under an obligation, whether formal or informal, to act in relation to the securities;

42 Securities Industry Act 1971, No. 2 (c) a person who is accustomed or is. under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes-of-that other person in relation to the securities; (d)_a body corporate-that is, or the directors of which are, accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that other person in relation to the securities; or (e) a body corporate in accordance with the directions, instructions or wishes of which or of the directors of which that other person is accustomed or under an obligation, whether formal or informal, to act in relation to the securities. 94. False or misleading statements affecting marketable securities. A person shall not make any statement or disseminate any information which is likely to induce the purchase or sale of any securities by others or which is likely to have the effect of raising or lowering the market price of any securities if, at the time such statement or information be made or disseminated, he knows or ought reasonably to have known such statement or information is false or misleading in a material particular. 95. Bogus , etc., acts or transactions affecting market price . A person shall not, for the purpose of affecting the trading in or the market price of any securities, knowingly do any act or take part in any transaction, which act or transaction is of a bogus, feigned or spurious nature. 96. Offences and penalty. A person who contravenes any of the provisions of this Part shall be guilty of an offence against this Act and liable on conviction on indictment, to a penalty not exceeding $10,000 or to imprisonment for not more than five years or to both such penalty and imprisonment. 97. Convicted persons liable to pay compensation . A person who. is convicted of an offence under this Part shall be liable to pay compensation to any person who has purchased or sold any securities at a price affected by the act or transaction the subject of the offence for the damage suffered by him as a result of that purchase or sale. PART X-GENERAL 98. Regulations . (1) The Governor in Council may make regulations not inconsistent with this Act for or with respect to- (a) regulating the publication of advertisements offering the services of dealers or investment advisers, or offering securities for purchase or sale, and - the form and content of such advertisements; (b) the preparation by dealers of balance sheets and profit and loss accounts and the form and content thereof; (c) prescribing forms for the purposes of this Act; (d) prescribing fees to be paid in respect of any matter or thing required for the purposes of this Act; (e) all matters or things which by this Act are required or permitted to be prescribed or which are necessary or expedient to be prescribed to give effect to this Act.

Securities Industry Act 1971, No. 2 43 (2) Save as otherwise expressly provided in this Act the regulations- (a) may be of general or specifically limited application; and (b) may impose a penalty of not more than $200 for any contravention thereof. 99. Publication of regulations . (1) Every regulation made under this Act shall- (a) be published in the Gazette; (b) upon its publication in the Gazette, be judicially noticed and such publication shall be conclusive evidence of the matters contained therein; (c) take effect from the date of such publication, unless a later date is specified in that or any other regulation for its commencement when in such event it shall take effect from that later date; and (d) be laid before the Legislative Assembly within fourteen sitting days after such publication if the Legislative Assembly is in session, and if not, then within fourteen sitting days after the commencement of the- next session. (2) If the Legislative Assembly passes a resolution of which notice has been given at any time within fourteen sitting days after any such regulation has been laid before the Legislative Assembly disallowing such regulation or part thereof, that regulation or part shall thereupon cease to have effect, but without prejudice to the validity of anything done in the meantime or to the making of a further regulation. 100. Restrictions on use of " stock broker ". A person who is not a stock broker within the meaning of this Act shall not take or use or by inference adopt the name or title of stock broker or take or use or have attached to or exhibited at any place any name, title or description implying or tending to give rise to the belief that he is a stock broker. 101. Offences and penalty . (1) A person who contravenes or fails to comply with any provision of this Act shall be guilty of an offence against this Act and, where no penalty is expressly provided, shall be liable to a penalty not exceeding $500. (2) Where a person, being a corporation, is guilty of an offence against this Act, any director, manager, secretary or other officer of the corporation who was knowingly a party to the offence shall also be guilty of that offence. (3) Any offence against this Act which is expressed to be punishable upon conviction on indictment is a misdemeanour. (4) Except where this Act otherwise provides, offences against this Act shall be punishable on summary conviction. 102. Reciprocity in relation to offences . (1) If, in Queensland, a person does an act or omits to do an act and that person would, if he had done that act or had omitted to do that act in another State or in a Territory of the Commonwealth, have been guilty of an offence against the law of that State or Territory that corresponds to a provision of this Act, that person is guilty of an offence against this Act punishable as the firstmentioned offence is punishable.

44 Securities Industry Act 1971, No. 2 (2) Where an act or omission constitutes an offence both under this Act and a corresponding law and the offender has been punished for the offence under that law, he is not liable to be punished in respect of the offence against this Act. 103. Proceedings how and when taken. (1) Proceedings for an offence against this Act, may be taken-- (a) by the Commissioner or an officer or employee under this Act authorized in writing in that behalf by the Commissioner; or (b) with the written consent of the Minister, by any person, except where this Act otherwise provides. (2) Notwithstanding anything in any Act, proceedings for an offence against this Act that is punishable on summary conviction may be brought within the period of three years after the commission of the alleged offence or, with the consent of the Minister, at any later time.