Commonwealth Numbered Acts

CO-OPERATIVE SCHEME LEGISLATION AMENDMENT ACT 1989 No. 92 of 1989 - SECT 71

71. Sections 60 to 71, inclusive, of the Principal Act are repealed and the
following heading and sections are substituted:

"Division 1 - Futures brokers and futures advisers Futures brokers

"61. A person shall not:

   (a)  deal in a futures contract on another person's behalf; or

   (b)  hold himself, herself or itself out as carrying on a futures broking
        business; unless the first-mentioned person holds a futures broker's
        licence or is a recognised futures broker or an exempt broker.
Penalty: $10,000 or imprisonment for 2 years, or both. Futures advisers

"63. A person shall not:

   (a)  carry on a futures advice business; or

   (b)  hold himself, herself or itself out to be a futures adviser; unless
        the person is a licensee, a recognised licensee or an exempt futures
        adviser.
Penalty: $5,000 or imprisonment for 1 year, or both. Application for a licence

"65. (1) A person may apply to the Commission, in the prescribed form and
manner, for a futures broker's licence or a futures adviser's licence.

"(2) The Commission may require an applicant for a licence to give the
Commission such further information in relation to the application as the
Commission thinks necessary.

"(3) Subsections (1) and (2) of this section, and sections 66 to 66B
(inclusive), as in force at and after the commencement of section 71 of the
Co-operative Scheme Legislation Amendment Act 1989 apply in relation to an
application for a futures broker's licence or for a futures adviser's licence
that:

   (a)  is made at or after that commencement; or

   (b)  was made before that commencement but, as at that commencement, had
        been neither granted nor refused. Grant of licence to natural person

"66. (1) This section applies where a natural person applies for a licence.

"(2) The Commission shall grant the licence if:

   (a)  the application was made in accordance with section 65;

   (b)  the person is not an insolvent under administration;

   (c)  if the application is for a futures broker's licence - the person is a
        member of a relevant organisation;

   (d)  the Commission is satisfied that the person's educational
        qualifications and experience are adequate having regard to the nature
        of the duties of a holder of a licence of the kind applied for;

   (e)  the Commission has no reason to believe that the person is not of good
        fame and character; and

   (f)  the Commission has no reason to believe that the person will not
        perform those duties efficiently, honestly and fairly.

"(3) Otherwise, the Commission shall refuse the application.

"(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2) (e) or (f), the Commission shall have regard to any conviction
of the person, during the 10 years ending on the day of the application, of
serious fraud. Grant of licence to body corporate

"66A. (1) This section applies where a body corporate applies for a licence.

"(2) The Commission shall grant the licence if:

   (a)  the application was made in accordance with section 65;

   (b)  the applicant is not an externally-administered body corporate;

   (c)  if the application is for a futures broker's licence - the applicant
        is a member of a relevant organisation;

   (d)  the Commission is satisfied that the educational qualifications and
        experience of each responsible officer of the applicant are adequate
        having regard to the duties that the officer would perform in
        connection with the holding of the licence; and

   (e)  the Commission has no reason to believe that the applicant will not
        perform efficiently, honestly and fairly the duties of a holder of a
        licence of the kind applied for.

"(3) Otherwise, the Commission shall refuse the application.

"(4) In determining whether or not it has reason to believe as mentioned in
paragraph (2) (e), the Commission shall have regard, in relation to each
responsible officer of the applicant, to:

   (a)  whether or not the officer is an insolvent under administration;

   (b)  any conviction of the officer, during the 10 years ending on the day
        of the application, of serious fraud;

   (c)  any reason the Commission has to believe that the officer is not of
        good fame and character; and

   (d)  any reason the Commission has to believe that the officer will not
        perform efficiently, honestly and fairly the duties that the officer
        would perform in connection with the holding of the licence. Effect of
        certain provisions

"66B. (1) Sections 66 and 66A apply subject to sections 80N, 80P and 80R and
the regulations.

"(2) Nothing in subsection 66 (4) or 66A (4) limits the matters to which the
Commission may have regard:

   (a)  in deciding on an application for a licence; or

   (b)  in connection with performing or exercising any other function or
        power under this Part. Conditions of licence: general

"69. A licence is subject to:

   (a)  such conditions and restrictions as are prescribed;

   (b)  if the licence was granted before the commencement of section 71 of
        the Co-operative Scheme Legislation Amendment Act 1989 - such of the
        conditions of the licence as at that commencement as were imposed by
        the Commission; and

   (c)  subject to section 80P, such conditions and restrictions as the
        Commission imposes when granting the licence or while the licence is
        in force. Conditions of futures broker's licence: membership of
        relevant organisation

"69A. (1) A futures broker's licence is subject to:

   (a)  a condition that the licensee be, throughout the currency of the
        licence, a member of a relevant organisation; and

   (b)  a condition that the licence is suspended throughout a period
        throughout which the licensee:

        (i)    is a member of no relevant organisation; and

        (ii)   would, but for the suspension of the licensee's membership of a
               relevant organisation, be a member of the last-mentioned
               relevant organisation.

"(2) A person whose membership of a relevant organisation is suspended for a
period:

   (a)  is, for the purposes of paragraph (1) (a), a member of that relevant
        organisation throughout that period; and

   (b)  is, for the purposes of paragraph (1) (b), a member of that relevant
        organisation at no time during that period. Conditions of
        futures broker's licence: assets and liabilities

"69B. (1) Without limiting the generality of section 69, one or more of the
following may be imposed under that section on a futures broker's licence:

   (a)  a condition or restriction about limiting the liability that the
        licensee may incur in connection with a business of dealing in futures
        contracts;

   (b)  a condition or restriction about incurring, or a condition about
        disclosing, liabilities of the licensee that arise otherwise than in
        connection with such a business;

   (c)  a condition or restriction about the licensee's financial position,
        whether or not in relation to such a business;

   (d)  without limiting the generality of paragraph (c), a condition that the
        licensee's assets include, or not include, specified assets;

   (e)  without limiting the generality of paragraph (c), a condition that the
        sum of the values of specified assets included in the licensee's
        assets be not less than, or not greater than, an amount ascertained in
        accordance with the condition.

"(2) A condition imposed by virtue of paragraph (1) (e) may provide for the
values of assets to be ascertained, for the purposes of applying the
condition, in a manner specified in, or determined in accordance with, the
condition.

"(3) Without limiting the generality of paragraph (1) (e), a condition imposed
by virtue of that paragraph may provide for the amount referred to in that
paragraph to be a specified percentage of the sum of:

   (a)  the values of all the licensee's assets;

   (b)  the values of specified assets included in the licensee's assets;

   (c)  the amounts of all the licensee's liabilities; or

   (d)  the amounts of specified liabilities included in the licensee's
        liabilities. Conditions of licence: supervision of representatives

"69C. Without limiting the generality of section 69, one or more of the
following may be imposed under that section on a licence:

   (a)  a condition about what the licensee is to do, by way of supervision or
        otherwise, in order to prevent the licensee's representatives from
        contravening:

        (i)    a futures law; or

        (ii)   other conditions of the licence;

   (b)  a condition about what the licensee is to do to ensure that each
        representative of the licensee has adequate qualifications and
        experience having regard to what the representative will do on the
        licensee's behalf in connection with a futures broking business or
        futures advice business carried on by the licensee. Revocation and
        variation of licence conditions

"69D. Subject to section 80P, the Commission may at any time revoke or vary a
condition of a licence unless it was imposed by the regulations. Relevant
organisations to be informed about conditions of futures broker's licence

"69E. (1) As soon as practicable after imposing a condition on, or revoking or
varying a condition of, a futures broker's licence, the Commission shall
inform in writing:

   (a)  each relevant organisation of which the licensee is a member; and

   (b)  each body corporate that is a clearing house for a futures exchange of
        which the licensee is a member.

"(2) A contravention of subsection (1) does not affect the validity of an act
done by the Commission. Licensee to notify breach of licence condition

"70. (1) Within one business day after the happening of an event constituting
a contravention of a condition of a licence, the licensee shall give to:

   (a)  the Commission; and

   (b)  each relevant organisation of which the licensee is a member; a
        written notice setting out particulars of the event.
Penalty: $5,000 or imprisonment for 1 year, or both.

"(2) It is a defence to a prosecution for failing to give a particular notice
to a person as required by this section if it is proved that:

   (a)  when the requirement arose, the defendant was unaware of the event
        that gave rise to the requirement; and

   (b)  the defendant:

        (i)    did not become aware of the event before the date of the
               information; or

        (ii)   did become so aware before that date but gave the notice to
               that person as soon as reasonably practicable after becoming so
               aware. Commission may require licensed futures broker to give
               information

"71. (1) The Commission may, by writing given to the holder of a futures
broker's licence, direct the holder to give the Commission specified
information about, or a specified statement relating to, a business of dealing
in futures contracts that the holder carries on or has carried on.

"(2) A direction under subsection (1) to give a specified statement may also
direct the holder to cause the statement to be audited by a registered company
auditor before it is given to the Commission.

"(3) A person shall comply with a direction under this section:

   (a)  if the direction specifies a reasonable period for compliance - within
        that period; or

   (b)  in any other case - within a reasonable period; or within that period
        as extended, or further extended, by the Commission by writing given
        to the person.
Penalty: $1,000.".