THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.4 - CONDUCT OF SECURITIES BUSINESS

Division 2 - Short selling of securities

SECTION 847   POWER OF COMMISSION TO PROHIBIT SHORT SELLING IN CERTAIN CASES  

847(1)  [Commission may notify exchange of necessity to prohibit]  

Where the Commission forms the opinion that it is necessary to prohibit securities, or a particular class of securities, from being sold on a stock market of a securities exchange in a manner that, but for paragraph 846(3)(e), would contravene subsection 846(1), in order to protect persons who might suffer financial loss if they were to buy or sell those securities in that manner or in order to protect the public interest, the Commission may give written notice to the securities exchange stating that it has formed that opinion and setting out the reasons for that opinion.

847(2)  [Commission may prohibit]  

If, after receiving such a notice:

(a)  the securities exchange does not take action to prevent the selling on a stock market of the securities exchange of the securities, or class of securities, specified in the notice in the manner referred to in subsection (1); and

(b)  the Commission is still of the opinion that it is necessary to prohibit the selling on that stock market of the securities, or class of securities, in that manner;

the Commission may, by a further written notice given to the securities exchange, prohibit the selling on that stock market of the securities, or class of securities, in that manner during a period of not more than 21 days.

847(3)  [Commission to give Minister report]  

As soon as practicable after giving a notice to a securities exchange under subsection (2), the Commission shall give to the Minister a written report setting out the reasons for the giving of the notice and send a copy of the report to the securities exchange.

847(4)  [Minister may direct revocation of prohibition]  

On receiving the report, the Minister may direct the Commission to revoke the notice given under subsection (2), and, if such a direction is given, the Commission shall immediately revoke the notice.

847(5)  [Prohibition on selling in contravention of notice]  

A securities exchange shall not permit the selling of securities on a stock market of the securities exchange in a way that contravenes a notice given under subsection (2).

847(6)  [Notice given to exchange by NCSC]  

Where a notice duly given to a securities exchange by the NCSC under a previous law corresponding to subsection (2) in relation to securities or a class of securities was in force immediately before the commencement of this Part and the period for which selling of the securities or class of securities on the stock market specified in the notice in the manner so specified was prohibited by the notice had not ended before that commencement:

(a)  the notice shall be deemed to be a notice duly given to that securities exchange on that commencement by the Commission under that subsection and prohibiting selling on that stock market of those securities or that class of securities in that manner for the unexpired portion of that period; and

(b)  a written report given to the Ministerial Council before that commencement under a previous law corresponding to subsection (3) shall be deemed to have been duly given by the Commission under that subsection to the Minister and a copy of the report sent to the securities exchange under that corresponding previous law shall be deemed to have been sent by the Commission under that subsection.