What is Securities Industry Bill?

Securities Industry Bill is Singapore Bill, cited as Bill 51 1970, currently marked in force and first recorded in 1970.

Is Securities Industry Bill still in force?

Yes — Securities Industry Bill is currently in force.

When did Securities Industry Bill take effect?

Securities Industry Bill was first recorded in 1970.

How many clauses does Securities Industry Bill have?

Securities Industry Bill contains 75 clauses.

Where can I read the official version of Securities Industry Bill?

The official text of Securities Industry Bill is published at sso.agc.gov.sg.

Securities Industry Bill (1970, No. 51)

Clause 1

Short title and commencement

This Act may be cited as the Securities Industry Act, 1970, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.(2) The Minister may appoint different dates for the coming into operation of the different Parts or provisions of this Act.

(1)

This Act may be cited as the Securities Industry Act, 1970, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

(2)

The Minister may appoint different dates for the coming into operation of the different Parts or provisions of this Act.

Clause 2

Interpretation

(1)

In this Act, unless the context otherwise requires —

Definition

“agent”, in relation to a dealer, includes a person who is or has at any time been a banker of the dealer;

Definition

“auditor” means an approved company auditor within the meaning of the Companies Act, 1967 (Act 42 of 1967);

Definition

“business”, in relation to a dealer, means a business of dealing in securities;

Definition

“the committee”, in relation to a stock exchange, means the persons for the time being in whom the management of the stock exchange is vested;

Definition

“company” has the same meaning as is assigned to that expression in the Companies Act, 1967 (Act 42 of 1967);

Definition

“corporation” has the same meaning as is assigned to that expression in the Companies Act, 1967;

Definition

“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;

Definition

“dealer’s representative” means a person in the direct employment of, or acting for, or by arrangement with, a dealer, not being an exempt dealer, who 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 the said functions (whether or not his remuneration is as aforesaid);

Definition

“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 —

(a)

any agreement for or with a view to acquiring, disposing of, subscribing for, or underwriting securities; or

(b)

any agreement 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;

Definition

“director” has the same meaning as is assigned to that expression in the Companies Act, 1967;

Definition

“exempt dealer” means —

(a)

a person who carries on a business of dealing in securities only through the holder of a dealer’s licence;

(b)

a corporation that is authorised under any written law to be a dealer in the short term money market; or

(c)

any public statutory corporation constituted under any written law in Singapore;

Definition

“licence” means —

(a)

a dealer’s licence; or

(b)

a representative’s licence,under Part III of this Act;

Definition

“member company” means a company which carries on a business of dealing in securities and is recognized as a member company by a stock exchange;

Definition

“member firm” means a firm which carries on a business of dealing in securities and is recognized as a member firm by a stock exchange;

Definition

“Registrar” means the Registrar of Companies under the Companies Act, 1967 (Act 42 of 1967), and includes any Deputy or Assistant Registrar of Companies;

Definition

“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 or company, the stock exchange by which the firm or company is recognized; and

(c)

in relation to any other person, the Registrar;

Definition

“representative” means a dealer’s representative;

Definition

“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;

Definition

“securities” means debentures, funds, stocks, shares or bonds of any government or of any body, corporate or unincorporate, and includes any right or option in respect thereof and any interest as defined in section 84 of the Companies Act, 1967;

Definition

“sole trader” means a stock broker who carries on a business of dealing in securities on his own account and not in partnership or as director of a company;

Definition

“stock broker” means —

(a)

a member of a stock exchange;

(b)

a partner in a member firm; or

(c)

a director of a member company;

Definition

“stock exchange” means —

(a)

the Stock Exchange of Malaysia and Singapore; and

(b)

any other body corporate which has been approved by the Minister under subsection (2) of section 4 of this Act.

Definition

“stock market” means a market, exchange or other place at which securities are regularly offered for sale, purchase or exchange;

Definition

“trust account” means a trust account established under section 19 of this Act.

(2)

Regulations made under section 75 of this Act may provide that, subject to any terms and conditions precribed, all or any of the provisions of this Act —

(a)

shall not have effect in relation to any prescribed dealer who does not or to any prescribed class of dealers who do not deal in securities for or on behalf of any other person; or

(b)

shall have effect in relation to any such dealer or class of dealers to such extent as is prescribed.

Clause 35

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 date of the coming into operation of section 19 of this Act and is so carrying on business on the 1st day of July next succeeding that date — that 1st day of July; and

(b)

in relation to a stock broker who commences to carry on business as a stock broker after the date of the coming into operation of section 19 of this Act and is so carrying on business on the 1st day of July next succeeding the day on which he commences so to carry on business — that 1st day of July;“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 twelve months ending on the 31st day of March next succeeding the date of the coming into operation of section 19 of this Act;

(b)

in relation to a stock broker referred to in paragraph (b) of that definition — the period of twelve months ending on the 31st day of March next succeeding the day on which he commences to carry on business as a stock broker;“quarter day” means the 31st March, the 30th June, the 30th September and the 31st December.

Definition

“prescribed day” means —

(a)

in relation to a stock broker who was carrying on business as a stock broker at the date of the coming into operation of section 19 of this Act and is so carrying on business on the 1st day of July next succeeding that date — that 1st day of July; and

(b)

in relation to a stock broker who commences to carry on business as a stock broker after the date of the coming into operation of section 19 of this Act and is so carrying on business on the 1st day of July next succeeding the day on which he commences so to carry on business — that 1st day of July;

Definition

“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 twelve months ending on the 31st day of March next succeeding the date of the coming into operation of section 19 of this Act;

(b)

in relation to a stock broker referred to in paragraph (b) of that definition — the period of twelve months ending on the 31st day of March next succeeding the day on which he commences to carry on business as a stock broker;

Definition

“quarter day” means the 31st March, the 30th June, the 30th September and the 31st December.

Clause 36

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 or company of which he is a member and that are required to be dealt with in accordance with section 19 of this Act —

(a)

cause to be deposited with the stock exchange of which he is a member, or by which his firm or company is recognised, 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 his or the firm’s or company’s trust account during the relevant period for the stock broker; and

(b)

thereafter, during each period of twelve months ending on the 31st day of March, 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 his, the firm’s or company’s trust account on any day during that period or the period of twelve months ending on the immediately preceding 31st day of March; and

(ii)

an amount that, on the day on which the lowest balance or aggregate is ascertained for the purposes of sub-paragraph (i) of this paragraph, was standing upon deposit by the stock broker, member firm, or company with that stock exchange in accordance with this section.

(2)

Where two or more trust accounts are kept under section 19 of this Act on any day by a stock broker or member firm or company, the aggregate of the balance 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 or company 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 one-third 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.

(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 or if he is a member company each director of that company, shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars and to a further fine not exceeding three hundred dollars for every day during which the offence continues after conviction.

Clause 37

Certain moneys to be held by stock exchange on trust

All moneys deposited with a stock exchange pursuant to this Part shall be held by the stock exchange upon trust for the stock broker, member firm or member company on whose behalf it was deposited and shall be repaid to the stock broker, member firm or member company on demand.

Clause 38

Deposits to be invested by stock exchange

(1)

Pending repayment, all deposits shall be invested by the stock exchange upon deposit with a bank in Singapore bearing interest at a rate agreed between the bank and the stock exchange.

(2)

The interest accruing in respect of deposits so invested shall be paid to the fidelity fund of the stock exchange established under Part VI of this Act.

Clause 39

As to deposits repaid

A deposit repaid pursuant to section 37 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 or where the depositor is a member company each director of that company, shall be guilty of an offence under this Act.

Clause 40

Accounts of deposits

(1)

A stock exchange shall establish and keep proper accounts of all deposits and shall forthwith after each quarter day cause a balance-sheet to be made out as at the last preceding quarter day.

(2)

The committee of the stock exchange shall appoint an auditor to audit the accounts relating to deposits.

(3)

The auditor appointed by the committee shall regularly and fully audit the accounts 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.

Clause 41

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 right or remedies of any person other than a depositor.

Clause 3

Establishment, etc., of stock markets

(1)

No person shall 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.

(2)

Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall liable on conviction to a fine not exceeding three thousand dollars and in the case of a second or subsequent conviction to a fine not exceeding fifteen thousand dollars.

Clause 4

Power of Minister to approve a stock exchange

(1)

Application for approval as a stock exchange may be made to the Minister in the prescribed form and manner.

(2)

The Minister may in writing approve a body corporate as a stock exchange if he is satisfied —

(a)

that at least twenty 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 high business integrity;

(ii)

for the expulsion, suspension or disciplining of members for conduct inconsistent with just and equitable principles in the transaction of business or for a contravention of or failure to comply with the 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;

(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.

Clause 5

Minister to be notified of amendments to rules

(1)

Where an amendment is made, whether by way of recission, alteration or addition, to the rules of a stock exchange the committee of the stock exchange shall forward a written notice thereof to the Minister.

(2)

If the notice in accordance with the provisions of subsection (1) of this section is not given within twenty-one days after an amendment that 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 in question and thereupon such whole or specified part (as the case may be) shall cease to have force and effect.

(4)

Any notice under this section may be served personally or by post.

Clause 6

Application of this Part

(1)

The provisions of this Part do not apply to or in respect of an exempt dealer but do apply to a dealer who is a stock broker.

(2)

Where a person would, but for this subsection, 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 date of the coming into operation 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.

Clause 7

Dealer’s licence

No person shall 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.

Clause 8

Dealer’s representative’s licence

No person shall act as a dealer’s representative unless he is the holder of a dealer’s representative’s licence under this Part.

Clause 9

Applications for licence or renewal

(1)

An application for a licence or for the renewal of a licence shall be made to the Registrar 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 within one month before the expiry of the licence.

(2)

The Registrar may require an applicant to supply him with such further information as he considers necessary in relation to the application.

(3)

The Registrar shall not refuse to grant or renew a licence without first giving the applicant an opportunity of being heard.

Clause 10

Registrar to grant or renew dealer’s licence in certain circumstances

The Registrar shall grant or renew a dealer’s licence if —

(a)

after consideration —

(i)

where the applicant is an individual — of the character and financial position of the applicant; or

(ii)

where the applicant is a corporation — of the character of the directors and the secretary of the corporation and of the corporation’s financial position; and

(b)

after consideration of the interests of the public,he is of the opinion that the applicant is a fit and proper person to hold the licence applied for.

Clause 11

Registrar to grant or renew representative’s licence in certain circumstances

The Registrar shall grant or renew a representative’s licence if after consideration of the application he is of the opinion that the applicant is a fit and proper person to hold the licence applied for.

Clause 12

Power of Registrar to impose conditions or restrictions

(1)

The Registrar may grant or renew a licence subject to such conditions or restrictions as he thinks fit.

(2)

A person who contravenes or fails to comply with any condition of, or restriction in, his licence shall be guilty of an offence under this Act.

Clause 13

Security to be lodged in respect of dealer’s licence

(1)

Except in the case of a dealer who is a stock broker, the Registrar shall not grant or renew a dealer’s licence unless there is lodged with him a security in the sum of thirty thousand dollars in respect of the licence.

(2)

A security required by subsection (1) of this section shall be by cash deposit or by such other method as the Registrar may in any particular case allow.

(3)

A security lodged under subsection (1) of this section shall be applied by the Registrar subject to and in accordance with the regulations made under this Act.

Clause 14

Period of licence

(1)

Subject to subsection (2) of this section, a licence shall expire one year after the date of issue 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.

Clause 15

Power of court to cancel licence, etc

(1)

The holder of a licence may be summoned to appear before a District Court 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

(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 or secretary of the corporation is not a fit and proper person to be a director or secretary (as the case may be) of a corporation holding such a licence.

(2)

On being satisfied that the relevant ground referred to in subsection (1) of this section has been established the court may order that the licence of the person concerned be cancelled and that that person be disqualified, either permanently or for such period as the court specifies, from holding another such licence.

Clause 16

Appeal

(1)

Any person who is aggrieved by any decision of the Registrar under this Part or by a decision of a Court under section 15 of this Act may within thirty days after such decision appeal to the High Court.

(2)

Any appeal under this section shall be by way of re-hearing and the decision of the Court shall be final and shall be given effect to by the Registrar.

Clause 17

Application of this Part

This Part applies to and in relation to —

(a)

the business of a dealer who is a stock broker within the meaning of this Act whether that business is carried on in Singapore or elsewhere; and

(b)

the business of a dealer who is not a stock broker within the meaning of this Act in so far as that business is carried on in Singapore.

Clause 18

Accounts to be kept by dealers

(1)

A dealer shall keep or cause to be kept 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 Singapore the dealer shall cause to be sent to and kept at a place in Singapore 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)

Without affecting the generality of subsection (1) of this section a dealer shall keep or cause to be kept the following accounts and records: —

(a)

a Bought and Sold Book recording the name of the buyer and the 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.

(4)

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.

(5)

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.

(6)

Where any account or record required by this section to be kept is not kept by making entries in a bound book but by some other means the dealer concerned shall take reasonable precautions for guarding against falsification and for facilitating discovery of any falsification.

Clause 19

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 Singapore 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) that are received from or on account of any person (other than a stock broker) for the purchase of securities and that are not attributable to securities delivered to the dealer before or within three bank trading days after receipt of those amounts; and

(b)

all amounts (less any brokerage and other proper charges) that are received for or on account of any person (other than a stock broker) from the sale of securities and that are not paid to that person or as that person directs within three bank trading days after receipt of such amounts.

(2)

Moneys required by subsection (1) of 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 under this Act and shall be liable on conviction to a fine not exceeding two thousand dollars; or

(b)

with intent to defraud contravenes or fails to comply with any provision of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

Clause 20

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;

(b)

to a stock exchange in accordance with the provisions of section 36 of this Act; or

(c)

that is otherwise authorized by law.

Clause 21

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 an order or process of any court.

Clause 22

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.

Clause 23

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 auditor.

Clause 24

Dealer to lodge auditor’s report

(1)

A dealer shall on or before the 31st day of March in each year or within such longer time as may be allowed under subsection (2) of this section lodge with the relevant authority an auditor’s report, containing information on such matters as are prescribed, for the year ending on the preceding 30th day of June.

(2)

The relevant authority may for special and exceptional reasons grant an extension of time not exceeding four weeks for the lodging of a report under subsection (1) of this section.

(3)

If a dealer fails to comply with the provisions of subsection (1) of this section the relevant authority shall forthwith report the matter to the Minister.

Clause 25

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 18, 19 or 20 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.

Clause 26

Report of auditor to be forwarded to Minister in certain cases

(1)

If after consideration of an auditor’s report furnished under section 25 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 it may, forward the said report to the Minister with any further report thereon which it thinks proper to make.

(2)

It shall be a defence to any proceedings in defamation in respect of any statement made in any such report of an auditor or in any such further report of a relevant authority if the defendant satisfies the court that the statement was made bona fide and without malice.

Clause 27

Power of Minister to appoint independent auditor

(1)

Where the Minister has received —

(a)

a report under subsection (3) of section 24 of this Act from a relevant authority; or

(b)

an auditor’s report forwarded to him pursuant to section 26 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 such dealer or relevant authority to pay a specified amount, being the whole or part of such 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 proceedings may be taken by the Minister in any court of competent jurisdiction to recover the amount in question as a civil debt recoverable summarily.

Clause 28

Power of 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 bona fide and without malice, 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.

Clause 29

Auditor to report to Minister

An auditor appointed by the Minister under section 27 or 28 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.

Clause 30

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 such 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 or where the dealer is a company, any director, manager or secretary of that company and any of the dealer’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 such 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.

Clause 31

Prohibition against communication of certain matters by auditor and employees

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 27 or 28 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 auditor or employee, to any person other than the Minister, to the relevant authority in relation to the dealer concerned, or to any other person specified by the Minister or such relevant authority and, in the case of an employee, to any person other than the auditor by whom he is employed.

Clause 32

Books, accounts and records to be produced upon demand

(1)

Upon request by an auditor appointed by the Minister under section 27 or 28 of this Act or by a person who produces a written authority in that behalf given under paragraph ( c) of section 30 of this Act —

(a)

a dealer and, where the dealer carries on business in partnership, the other members of the partnership and where the dealer is a company, any director, manager or secretary of that company and the dealer’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 where the dealer is a company, any director, manager or secretary of that company and the dealer’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 by an auditor appointed by the Minister under section 28 or 29 of this Act or by a person who produces a written authority in that behalf given under paragraph (c) of section 30 of this Act.

(3)

Any person who contravenes or fails to comply with the provisions of subsection (2) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

Clause 33

Penalty for destroying, concealing or altering records or sending records or other property out of Singapore

(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 and 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 Singapore 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 under this Act and shall be liable on conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding two years or to both such fine and imprisonment.

(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 referred to in subsection (1) of this section; or

(b)

sent or attempted to send or conspired to send out of Singapore any such book, account, record or document or any property referred to in subsection (1) of this section,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 and audit under this Part shall lie on him.

Clause 34

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;

(b)

the information to be furnished in reports from auditors; or

(c)

the keeping of accounts, books and records.

Clause 42

Interpretation

In this Part, unless inconsistent with the context or subject-matter —“committee”, in relation to a fidelity fund of a stock exchange, means the committee of that stock exchange;“Court” means the High Court;“fidelity fund” or “fund” means a fidelity fund established under section 43 of this Act;“stock exchange”, in relation to a fidelity fund, means the stock exchange which established the fidelity fund.

Definition

“committee”, in relation to a fidelity fund of a stock exchange, means the committee of that stock exchange;

Definition

“Court” means the High Court;

Definition

“fidelity fund” or “fund” means a fidelity fund established under section 43 of this Act;

Definition

“stock exchange”, in relation to a fidelity fund, means the stock exchange which established the fidelity fund.

Clause 43

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 and shall be held in trust for the purposes set out in this Part.

Clause 44

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 38 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 moneys 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 committee of the stock exchange under section 64 of this Act; and

(g)

all other moneys lawfully paid into the fund.

Clause 45

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 Singapore to the credit of a separate account.

Clause 46

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 64 of this Act;

(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.

Clause 47

Accounts of fund

(1)

A stock exchange shall establish and keep proper accounts of its fidelity fund and shall before the 31st day of March in each year cause a balance-sheet in respect of such accounts to be made out as at the preceding 30th day of June.

(2)

The committee of the stock exchange shall appoint an auditor to audit the accounts of the fidelity fund.

(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.

Clause 48

Management sub-committee

(1)

The committee of a stock exchange 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 of a stock exchange may by resolution delegate to a sub-committee appointed by it under this section all or any of its powers, authorities and discretions under this Part (other than those under this section, section 51, subsections (3), (4) and (5) of section 54 and section 56 of this Act).

(3)

Any power, authority or discretion so delegated may be exercised by members forming a majority of the sub-committee as if by this Part that power, authority or discretion had been conferred on a majority of the members of the sub-committee.

(4)

Any such delegation may at any time in like manner be rescinded or varied.

(5)

The committee of a stock exchange 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.

Clause 49

Contributions to fund

(1)

A person shall not be admitted to membership of a stock exchange or to partnership in a member firm or as director of a member company until he has paid to the stock exchange concerned or, in the case of a member firm or company, the stock exchange by which the firm or company is recognized, as a contribution to its fidelity fund such amount being not less than three hundred dollars as is determined by the stock exchange.

(2)

A stock broker shall on or before the 31st 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, or director of a member company the stock exchange by which the firm or company is recognized as a contribution to its fidelity fund such amount being not less than three hundred dollars, as determined by the stock exchange.

Clause 50

Provisions if fund exceeds one million dollars

(1)

In the event of a fidelity fund amounting to a sum exceeding one million dollars (or such greater sum as the Minister may, by order, determine) —

(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 made or (if any such payment has been made) the fund has been fully reimbursed, shall, subject to subsection (2) of this section, be freed and discharged from further annual contributions to the fund;

(b)

on the retirement from business of any such stock broker the committee may in its discretion pay 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, either with or without simple interest thereon at a rate not exceeding three per centum per annum; and

(c)

on the death of any such stock broker 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 personal representative or to his widow or any dependent or dependents.

(2)

Any determination of the 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 the said paragraphs is for the time being suspended the committee shall not suspend the operation of the other.

(4)

If a fidelity fund is reduced below the sum of three quarters of a million or such other sum as the Minister may, by order, determine the committee may decide 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 49 of this Act.

Clause 51

Levy in addition to annual contributions

(1)

If at any time a fidelity fund 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 one thousand dollars, for payment into the fund.

(2)

The amount of such levy 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 ten thousand dollars in the aggregate, or more than three thousand dollars in any period of twelve months.

Clause 52

Power of 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.

(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.

Clause 53

Investment of fund

Any moneys in a fidelity fund 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.

Clause 54

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 50 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 date of the coming into operation of this Act, in the course of or in connection 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 that money or property; or

(b)

from any defalcation committed by the partners or by any of the partners in a member firm or by a member company or any of its directors who are liable to contribute to that fund, whether or not they have been freed and discharged from payment under section 50 of this Act or by any of the clerks or servants of such a member firm or company in relation to any money or other property which, whether before or after the date of the coming into operation of this Act, in the course of or in connection with the business of that firm or company —

(i)

was entrusted to or received by the partners or any of the partners or by a member company or any of its directors or any of the firm’s or company’s clerks or servants for or on behalf of any other person; or

(ii)

(the partners or any of the partners or the member company being in respect of the money or other property either the sole trustee or trustees or trustee or trustees with any other person or persons) was entrusted to or received by the partners or any of the partners or the member company or any of its directors or any of the firm’s or company’s clerks or servants as trustee or trustees or for or on behalf of the trustees of that money or property.

(2)

Save as otherwise provided in this section, the total amount that may be paid under this Part to all persons who suffer loss —

(a)

through defalcations by any sole trader and through defalcations by any of his clerks or servants; or

(b)

through defalcations by the partners or any of the partners in a member firm or by a member company or any of its directors and through defalcations by any of the firm’s or company’s clerks or servants,shall not, in any event, exceed in respect of that sole trader or that member firm or company the sum of one hundred thousand dollars, 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.

(3)

If, after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee considers that the assets of the fund so permit the committee may from time to time by notice published in the Gazette increase the total amount which may be applied from that fund pursuant to the provisions of subsection (2) of this section and from the date of such publication until the notice is revoked or varied the amount specified in the notice shall be the total amount which may be applied as aforesaid.

(4)

A notice under subsection (3) 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.

(5)

If, in any particular case after taking into account all ascertained or contingent liabilities of a fidelity fund, the committee 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.

(6)

For the purposes of this section “sole trader”, “partner in a member firm” or “director of a member company” includes a person who has been, but at the time of any defalcation in question has ceased to be, a sole trader, a partner in a member firm or director of a member company if, at the time of the defalcation the person claiming compensation had reasonable grounds for believing that person to be a sole trader, a partner in a member firm or a director of a member company (as the case may be).

Clause 55

As to claims against fund

(1)

Subject to this Part, every person who suffers pecuniary loss as provided in subsection (1) of section 54 of this Act shall be entitled to claim compensation from the fidelity fund and to take proceedings in the Court as provided in this Act against the stock exchange to establish such claim.

(2)

Subject to subsection (3) of this section, a person shall in no case have any claim against the fidelity fund in respect of —

(a)

a defalcation committed before the date of the coming into operation of this Act; or

(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, or in the case of a member company, of the director or directors concerned.

(3)

Upon the amalgamation of the Malaysia and Singapore Stock Exchange Members’ Fidelity Guarantee Fund, maintained pursuant to the articles of association of the Malaysia and Singapore Stock Exchange, with the fidelity fund of the Stock Exchange of Malaysia and Singapore established under section 43 of this Act, the fidelity fund so established shall be liable, in the manner and to the extent provided by those articles of association before any amendment thereof required to enable the amalgamation to be effected, for claims against the Stock Exchange of Malaysia and Singapore Members’ Fidelity Guarantee 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 fund in reduction of the loss.

(5)

In addition to any compensation payable under this Part interest shall be payable out of the 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.

Clause 56

Rights of innocent partner in relation to fund

(1)

Where all persons submitting claims pursuant to section 55 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 such 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 the Rules of Court.

(3)

The 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 return day for any such appeal shall be such day, being not more than twenty-eight days after the lodging of the notice of appeal, as is set out in the said notice.

(5)

Every appeal shall be in the nature of a re-hearing and may be heard in Court or in chambers.

(6)

The Court shall inquire into and decide upon the appeal and for that purpose may do all such matters and things relating thereto and in the same manner and to the same extent as it is empowered to do in the exercise of its ordinary jurisdiction and if the Court is of opinion having regard to all the circumstances that the appellant was in no way a party to the defalcation and that he acted honestly and reasonably in the matter it may direct that the appellant shall to the extent of any payment made by him be subrogated to all the rights and remedies in relation to the fidelity fund concerned of the person to whom he has made payment in compensation as aforesaid.

Clause 57

Notice 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 Singapore a notice, in or to the effect of the form prescribed, specifying a date, not being earlier than three months after the said publication, on or before which claims for compensation from the fidelity fund, in relation to the person specified in the notice, may be made.

(2)

A claim for compensation from a fidelity fund in respect of a defalcation 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 said notice; or

(b)

where no such notice has been published within six months after the claimant became aware of the defalcation,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 in good faith and without malice for the purposes of this section.

Clause 58

Power of committee to settle claims

(1)

The committee may, subject to this Part, allow and settle any proper claim for compensation from a fidelity fund at any time after the commission of the defalcation 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 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 or the directors of the member company 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 may apply for leave to a judge of the Court in chambers who may make such order in the matter as he thinks fit.

(4)

The committee after disallowing (whether wholly or partly) any claim for compensation from a fidelity fund shall serve notice of such disallowance in the prescribed form on the claimant or his solicitor.

(5)

No proceedings against a stock exchange in respect of a claim which has been disallowed by the committee 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 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 or, where proceedings are brought to establish a claim, the Court, if satisfied that the defalcation on which the claim is 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 criminal trial in respect of the defalcation.

Clause 59

Form of order of Court establishing claim

(1)

Where in any proceedings brought to establish a claim 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 the same in accordance with the provisions of this Part.

(2)

The Judges of the Court may make rules for or with respect to practice and procedure generally upon proceedings under this Part.

(3)

In any such proceedings all questions of costs shall be in the discretion of the Court.

Clause 60

Power of 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 or necessary for the purpose either of exercising its rights against a sole trader or the partners in a member firm or a member company or the directors thereof 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 by such first-mentioned person, the committee may disallow any claim by him under this Part.

Clause 61

Subrogation of stock exchange to rights, etc., of claimant upon payment from fund

On payment out of a fidelity fund of any moneys in respect of any claim under this Part the stock exchange shall be subrogated to the extent of such payment to all the rights and remedies of the claimant in relation to the loss suffered by him from the defalcation.

Clause 62

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.

Clause 63

Provision where fund insufficient to meet claims or where claims exceed total amount payable

(1)

Where the amount at credit in a fidelity fund 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 as aforesaid, then the amount at credit in the fund shall, subject to the provisions of 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 which have been allowed or in respect of which orders of the Court have been made (as aforesaid) in relation to defalcations by or in connection with a sole trader or member firm or member company exceeds the total amount which may pursuant to subsection (2) of section 54 of this Act be paid under this Part in respect of that sole trader or member firm or member company then the said total amount shall be apportioned between the claimants in such manner as the committee thinks equitable, and upon payment out of the fund of the said total amount in accordance with such apportionment all such claims and any orders relating thereto and all other claims against the fund which may thereafter arise or be made in respect of defalcations by or in connection with the said sole trader or member firm or company shall be absolutely discharged.

Clause 64

Power of 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 Singapore 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)

Any such contract 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 the 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.

Clause 65

Application of insurance moneys

No claimant against a fidelity fund 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 such contract, or have any right or claim with respect to any moneys paid by the insurer in accordance with any such contract.

Clause 66

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 Singapore, or a false or misleading appearance with respect to the market for, or the price of, any such securities.

Clause 67

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 satisfies the Court 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.

Clause 68

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 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 6A of the Companies Act, 1967 (Act 42 of 1967), shall have effect and in applying those provisions any reference to shares shall be read as a reference to securities.

(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 section 6 of the Companies Act, 1967 (Act 42 of 1967), 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 likely to act in relation to the securities;

(c)

a person who is accustomed or likely 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 likely 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 likely to act in relation to the securities.

Clause 69

False or misleading statements about marketable securities

A person shall not with respect to any securities make any statement or disseminate any information which at the time it is made or disseminated, he knows or has reasonable grounds for knowing is false or misleading in a material particular.

Clause 70

Offences and penalty

A person who contravenes any provision of this Part shall be guilty of an offence under this Act and shall be liable on conviction to a fine not exceeding thirty thousand dollars or to imprisonment for a term not exceeding five years or to both such fine and imprisonment.

Clause 71

Restrictions on use of title “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 the belief that he is a stock broker.

Clause 72

General penalty

(1)

A person who contravenes or fails to comply with any provision of this Act shall be guilty of an offence under this Act and, where no penalty is expressly provided, shall be liable on conviction to a fine not exceeding two thousand dollars.

(2)

Where a person, being a corporation, is guilty of an offence under 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.

Clause 73

Convicted persons liable to pay compensation

A person who is convicted of an offence under Part VII of this Act 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.

Clause 74

Proceedings by whom and when to be taken

Proceedings for an offence —

(a)

against any provision of Part VII of this Act may be taken only with the consent of the Attorney-General; and

(b)

against any other provision of this Act may be taken by the Registrar or, with the consent of the Attorney-General, by any other person.

Clause 75

Regulations

(1)

The Minister may make regulations for or with respect to —

(a)

prescribing forms for the purposes of this Act;

(b)

prescribing fees to be paid in respect of any matter or thing required for the purposes of this Act;

(c)

regulating the publication of advertisements offering the services of dealers or offering securities for purchase or sale and the form and content of such advertisements; and

(d)

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.

(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 fine of not more than five hundred dollars for any contravention thereof.

Securities Industry Bill

About this bill

PRELIMINARY

(1)

(2)

(1)

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(2)

INVESTMENT OF STOCK BROKER’S TRUST FUNDS

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