Singapore legislation
Clause 125
Clause 125
Dealings as principal
(1)
Subject to subsection (4), the holder of a capital markets services licence to deal in securities shall not, as principal, deal in any securities with a person which is not the holder of a capital markets services licence to deal in securities unless the holder first informs the person that the holder is acting in the transaction as principal and not as agent.
(2)
The holder of a capital markets services licence to deal in securities who enters into a transaction of sale or purchase of securities as a principal with a person who is not the holder of a capital markets services licence to deal in securities shall state in the contract note that the holder is acting in the transaction as principal and not as agent.
(3)
For the purposes of this section, a reference to the holder of a capital markets services licence to deal in securities dealing or entering into a transaction as principal includes a reference to the holder —
dealing or entering into a transaction on behalf of a person associated with or connected to the holder;
dealing in securities on behalf of a corporation in which the holder has a controlling interest; or
dealing on behalf of a corporation in which the holder’s interest and the interests of the directors of the holder together constitute a controlling interest.
(4)
Subsection (1) shall not apply to a transaction of sale or purchase of an odd lot of securities that is entered into by the holder of a capital markets services licence to deal in securities which is a member of a securities exchange or recognised trading system provider and specialises in transactions relating to odd lots of securities.
(5)
Where the holder of a capital markets services licence to deal in securities fails to comply with subsection (1) or (2) in respect of a contract for the sale of securities by the holder, the purchaser of the securities may, if he has not disposed of them, rescind the contract by a notice of rescission given in writing to the holder not later than 30 days after the receipt of the contract note.
(6)
Where the holder of a capital markets services licence fails to comply with subsection (1) or (2) in respect of a contract for the purchase of securities by the holder, the vendor of the securities may, in like manner, rescind the contract.
(7)
Nothing in subsection (5) or (6) shall affect any right that a person has apart from those subsections.
(8)
Any person who contravenes any of the provisions of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 2 years or to both.