52. Dealings as principal
Feedback & supportSubject to subsection (4), a dealer shall not, as principal, deal in any securities with a person who is not a dealer unless he first informs the person with whom he is dealing that he is acting in the transaction as principal and not as agent.
dealer
“dealer” means a person who carries on a business of dealing in securities as a body corporate whether or not he carries on any other business, but does not include an exempt dealer;
A reference in this section to a dealer dealing or entering into a transaction, as principal includes a reference to a person —
dealing or entering into a transaction on behalf of a person associated with him;
dealing in securities on behalf of a body corporate in which he has a controlling interest; or
where he carries on business as a dealer on behalf of a body corporate in which his interest and the interests of his directors together constitute a controlling interest.
A dealer who, as principal, enters into a transaction of sale or purchase of securities with a person who is not a dealer shall state in the contract note that he is acting in the transaction as principal and not as agent.
securities
“securities” means —(a)debentures, stocks or bonds issued or proposed to be issued by a government;(b)debentures, stocks, shares, bonds or notes issued or proposed to be issued by a body corporate or unincorporate;(c)any right or option in respect of any such debentures, stocks, shares, bonds or notes; or(d)any interest as defined in section 107 of the Companies Act, but does not include —(e)futures contracts that are governed by any written law regulating trading in futures contracts;(f)bills of exchange;(g)promissory notes; or(h)certificates of deposit issued by a bank;
Subsection (1) shall not apply in relation to a transaction entered into by a dealer who is a member of a securities exchange and specialises in transactions relating to odd lots of securities, being a transaction of sale or purchase of an odd lot of securities.
securities exchange
“securities exchange” means a stock exchange or an approved securities organisation;
Where a dealer fails to comply with subsection (1) or (3) 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 a dealer not later than 30 days after the receipt of the contract note and, where a dealer fails to comply with subsection (1) or (3) in respect of a contract for the purchase of securities by him, the vendor of the securities may, in like manner, rescind the contract.
Nothing in subsection (5) affects any right that a person has apart from that subsection.
A person who contravenes or fails to comply with any of the provisions of this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.