FRIDAY, MAY 28, 1982
STIFFER PENALTIES FOR COMMODITIES TRADING OFFENCES
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PROPOSALS TO IMPROVE THE CONTROL OF TRADING IN COMMODITY FUTURES CONTRACTS WILL BE INTRODUCED INTO THE LEGISLATIVE COUNCIL ON WEDNESDAY (JUNE 2).
THE MEASURES ARE CONTAINED IN THE COMMODITIES TRADING (AMENDMENT) BILL 1982 WHICH PROVIDES FOR AN INCREASE IN PENALTIES FOR A RANGE OF OFFENCES WHICH EXPERIENCE HAS SHOWN ARE NO LONGER ADEQUATE. THESE RELATE TO UNREGISTERED DEALERS AND UNREGISTERED DEALERS' REPRESENTATIVES, FRAUD AND BREACHES BY REGISTERED DEALERS OF REGULATORY PROVISIONS WITH INTENT TO DEFRAUD.
THE PENALTIES HAVE REMAINED UNCHANGED SINCE THE ENACTMENT IN 1976 OF THE COMMODITIES TRADING ORDINANCE, WHICH PROVIDES PROTECTION FOR INVESTORS BY ALLOWING ONLY SUITABLE PERSONS TO BE REGISTERED AS DEALERS AND BY THE OPERATION OF A SCHEME FOR COMPENSATION IN THE EVENT OF DEFAULT BY A DEALER. HOWEVER, IN THE CASE OF AN UNREGISTERED DEALER WHO IS FOUND GUILTY OF FRAUD, HIS ASSETS ARE NOT SUBJECT TO THE REGULATORY PROVISIONS OF THE ORDINANCE AND HIS CUSTOMERS DO NOT HAVE RECOURSE TO THE COMPENSATION SCHEME.
INVESTIGATIONS HAVE SHOWN THAT VERY LARGE SUMS OF MONEY ARE HANDLED BY UNREGISTERED DEALERS AND THEREFORE THE EXISTING LEVELS OF PENALTIES DO NOT SERVE AS A DETERRENT.
THE BILL, WHICH IS PUBLISHED IN THE GOVERNMENT GAZETTE TODAY, PROVIDES FOR LARGE INCREASES IN THE PENALTIES FOR UNREGISTERED DEALERS AND UNREGISTERED DEALERS' REPRESENTATIVES.
THE BILL INTRODUCES FOR THE FIRST TIME THE PENALTY OF IMPRISONMENT. IN ORDER TO DETER AN UNREGISTERED DEALER WHO IS IS IN THE PROCESS OF SETTING UP, THE ALTERNATIVE OF A PENALTY ON SUMMARY CONVICTION IS ALSO PROVIDED FOR.
COMMENTING ON THE PROPOSALS, THE COMMISSIONER FOR COMMODITIES TRADING, MR ROBERT FELL, SAID THE PENALTIES TOGETHER WITH CONTINUED POLICE ACTION SHOULD PUT THESE OPERATORS OUT OF BUSINESS ONCE AND FOR ALL.
DETAILS OF THE PRESENT LEVEL OF PENALTIES AND THE PROPOSED INCREASES ARE AS FOLLOWS
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PRESENT
PROPOSED
FALSE TRADING I.E. CREATING A FALSE MARKET AS REGARDS PRICES OR VOLUME OF TRADING
A FINE OF $100 000 AND
IMPRISONMENT FOR FIVE YEARS
A FINE OF $1 MILLION AND
IMPRISONMENT FOR SEVEN YEARS
LOYMENT