Friday, September 28, 1973
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The setting up of a Federation of Stock Exchanges to bring about greater uniformity of methods and to promote better trading practices. All four exchanges will belong to the Federation, but each will retain its own identity.
The registration of all dealers regardless of whether they are members of a stock exchange or not and all those who provide investment advice for payment, as well as their representatives.
The establishment of a compensation fund for each stock exchange to recompense clients who may suffer because a broker cannot make good what he owes them. Each exchange will be required to deposit $50,000 for each member shortly after the bill is enacted and a further $50,000 some months afterwards, These amounts can be varied by the Commission.
Another important part of the bill deals with the prevention
of improper practices, including 'insider dealings' which is made a criminal offence -- as recommended in the second report of the Companies Law Revision Committee.
The bill also introduces restrictions on various forms of trading, such as the short selling of securities which will be an offence punishable by a fine of $10,000 and six months' imprisonment; and hawking securities
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which will carry a $5,000 fine. Option and forward trading are also forbidden.
Provision is made for inspections and investigations to be carried
out where it is felt that such practices are occurring.
The Investors
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