XN000022-1973-09-28 — Page 4

- 3.

Friday, September 28, 1973

1

The Investors Bill seeks to provide greater protection to the

investing public by making it an offence for anyone to induce investors

through fraudulent and reckless means, to trade in securities or to

take part in money-making schemes involving securities and other property.

A maximum penalty of a $1 million fine and seven years' imprisonmont

is prescribed for this offence.

Advertisements which invite the public to participate in property

schemes are also banned, and it will be an offence for a person to have

in his possession a document containing such an advertisement, if he

intends to use it.

People convicted on indictment for contravening the provision

about advertising will be liable to a fine of $500,000 and imprisonment

for three years.

These provisions are based mostly on the United Kingdom Prevention

of Fraud (Investments) Act of 1958.

Advertisement is widely defined, but the bill lists a number

of exemptions, including the issue of prospectuses of companies, unit

trusts and mutual funds, advertisements containing offers to the public

made by registered dealers in securities, or by persons who buy and sell

property other than securities in the course of their business.

Under the bill, it will also be an offence to advertise that a

person is prepared to give investment advice or manage a portfolio for

payment, unless he is properly registered. It will not be an offence, however,

if there is no payment for the services.

/Commenting