Corporations Regulations 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.8 - OTHER PROVISIONS RELATING TO CONDUCT ETC CONNECTED WITH FINANCIAL PRODUCTS AND FINANCIAL SERVICES, OTHER THAN FINANCIAL PRODUCT DISCLOSURE  

Division 7 - Other rules about conduct  

REGULATION 7.8.18   INSTRUCTIONS TO DEAL THROUGH LICENSED MARKETS  

7.8.18(1)   [ Purpose]  

For section 991C of the Act, this regulation applies in relation to all instructions received by a financial services licensee to deal in financial products through licensed markets, except to the extent that the market integrity rules, or the operating rules of a licensed market in relation to which the financial services licensee is a participant, otherwise provide.

7.8.18(2)   [ Obligation to transmit instructions]  

Subject to subregulation (3), the financial services licensee must transmit, in the sequence in which they are received, all instructions to deal in a class of financial products at or near the market price for financial products of that class prevailing immediately before execution of the instructions.

7.8.18(3)   [ Proposed dealing by licensee on own account]  

If:

(a) a financial services licensee proposes to deal in a class of financial products on the financial services licensee's own account; and

(b) the person by whom or on whose instructions the instructions for the dealing are to be transmitted is aware of instructions of a client of the financial services licensee to deal in that class of financial products at or near the market price for a financial product of that class prevailing at that time (being instructions that have not been transmitted);

that person must not transmit, and must not give instructions to any other person to transmit, the instructions to give effect to the proposal of the financial services licensee to deal in that class of financial products before the instructions of the client are transmitted.

7.8.18(4)   [ Licensee must allocate dealings]  

If:

(a) during a particular period, a financial services licensee transmits instructions (whether or not those instructions consist of, or include, instructions giving effect to a proposal of the financial services licensee to deal in the class of financial products concerned on the financial services licensee's own account) to deal in a class of financial products at or near the market price for a financial product of that class prevailing immediately before execution of the instructions; and

(b) dealings in that class of financial products are effected pursuant to those instructions;

the financial services licensee must allocate the dealings to those instructions:

(c) in the sequence in which the dealings were effected; and

(d) in the sequence in which the financial services licensee transmitted the instructions.

7.8.18(5)   [ Non-disclosure of client's instructions]  

A financial services licensee ( licensee 1 ), or a director, partner, officer or employee of a financial services licensee, must not disclose to any other financial services licensee, or to a person engaged or employed in the business of licensee 1 or any other financial services licensee, instructions of a client to deal in a class of financial products, except:

(a) to the extent necessary to execute the instructions; or

(b) as required by this Act or any other law.

7.8.18(6)   [ Interpretation]  

In this regulation, a reference to the transmission by a financial services licensee of instructions to deal in a class of financial products is a reference:

(a) if the financial services licensee has direct access to the licensed market on which the instructions are to be executed - to the transmission of the instructions to that licensed market; or

(b) if the financial services licensee has access to the licensed market on which the instructions are to be executed only through another financial services licensee - to the transmission of the instructions to that other financial services licensee.