27
WEDNESDAY, JULY 25, 1990
3.
MR
UNDER CLAUSE ON THE DEFINITION OF "CONNECTED PERSON" NENDICK NOTED THAT IT WAS SUGGESTED THAT A PERSON MIGHT BE REGARDED AS AN INSIDER DEALER EVEN THOUGH HE DID NOT KNOW THAT THE INFORMATION POSSESSED WAS RELEVANT INFORMATION OR THAT HE WAS A CONNECTED PERSON.
THAT
"KNOWLEDGE
THE INFORMATION IS ALREADY A TEST UNDER CLAUSE 8.
RELEVANT
HE
19
INFORMATION
BECAUSE
BE RELEVANT I.E.
"IN FACT WE WOULD EXPECT MOST PEOPLE TO DEAL PRECISELY THEY KNOW THE INFORMATION IN THEIR POSSESSION TO PRICE SENSITIVE.
"WE DO NOT
THINK THE DEFINITION
OF 'CONNECTED
PERSON' 13
UNNECESSARILY WIDE. NOR DO WE BELIEVE THE DEFINITION WILL CAST DOUBT ON NORMAL COMMERCIAL DEALS, HE SAID.
MR NENDICK SAID THE NET MUST BE CAST WIDE ADDING THAT THERE WERE IMPORTANT TESTS WHICH HAD TO THERE WERE ALSO IMPORTANT PROCEDURAL SAFEGUARDS.
"I CAN ASSURE MEMBERS THAT THERE WILL BE A PROCESS, HE SAID.
HI
TO BE EFFECTIVE, BE APPLIED AND
CAREFUL SCREENING
ΤΟ
"CLAUSE 13(1) OF THE BILL EMPOWERS THE FINANCIAL SECRETARY
BY THE
WHETHER TRIBUNAL,
FOLLOWING AN INQUIRY INSTITUTE REPRESENTATIONS BY THE SECURITIES AND FUTURES COMMISSION OR OTHERWISE.
AND
"IN ACTUAL FACT, WE ENVISAGE THAT AN INVESTIGATION WILL USUALLY MAKE BY
THE
WOULD NOT BE INITIATED
THE
COMMISSION SFC,
HAD REASONABLE REPRESENTATIONS TO THE FINANCIAL SECRETARY UNLESS IT
I.E. THAT GROUNDS то BELIEVE THAT INSIDER DEALING HAD TAKEN PLACE, THERE WAS A PRIMA FACIE CASE TO BE INVESTIGATED BY A TRIBUNAL.
"THE FINANCIAL SECRETARY WILL ONLY INSTITUTE AN INQUIRY IF IS SATISFIED THAT A PRIMA FACIE CASE HAS BEEN ESTABLISHED AND THAT WOULD BE IN THE PUBLIC INTEREST TO HAVE A FULL INVESTIGATION.
"HE WILL NORMALLY SEEK LEGAL ADVICE BEFORE DECIDING WHETHER INQUIRY SHOULD BE INSTITUTED.
**
HE IT
AN
OFFICERS INSIDER
TO ADDRESS THE PROBLEM OF NEGLIGENT OFFICERS, THAT IS OF A CORPORATION WHO DO NOT CONSENT TO OR CONNIVE AT AN DEALING, BUT ARE NEGLIGENT ABOUT TAKING PRECAUTIONS TO PREVENT SUCH DEALINGS, MR NENDICK SAID THE ADMINISTRATION NOW PROPOSED THAT THE BILL SHOULD REFER TO AN "INSIDER DEALER" INSTEAD OF "A PERSON INVOLVED IN INSIDER DEALING".
BETWEEN A TRUE THIS WOULD ALLOW A DISTINCTION TO BE DRAWN
WITHOUT RESTRICTING THE INSIDER DEALER AND A NEGLIGENT OFFICER,
OF TRIBUNAL'S DISCRETION TO HAVE REGARD TO THE NATURE OF INVOLVEMENT ALL PERSONS CONCERNED, HE SAID.
/CONCERNING THE