THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.5 - DEALERS' FINANCIAL STATEMENTS AND AUDIT

SECTION 856   DEALERS' FINANCIAL RECORDS  

856(1)  [Application of section]  

This section applies where a person (in this section called the ``dealer'') holds a licence.

856(2)  [Dealer to keep accounting records]  

The dealer must:

(a)  keep such financial records as correctly record and explain the transactions and financial position of the securities business carried on by the dealer; and

(b)  keep those records (in this section called ``the records'') as provided by this section.

856(3)  [Records to allow true and fair preparation of statements]  

The records shall be kept in such a way as will enable true and fair profit and loss statements and balance sheets to be prepared from time to time.

856(4)  [Records to allow proper auditing]  

The records shall be kept in such a way as will enable profit and loss statements and balance sheets of the securities business carried on by the dealer to be conveniently and properly audited.

856(5)  [Records to be in English or convertible]  

The records shall be kept in writing in the English language or in such a manner as will enable them to be readily accessible and readily converted into writing in the English language.

856(6)  [Particulars]  

The records shall be kept in sufficient detail to show particulars of:

(a)  all money received or paid by the dealer, including money paid to, or disbursed from, a trust account;

(b)  all purchases and sales of securities made by the dealer, the charges and credits arising from them, and the names of the buyer and seller of each of those securities;

(c)  all income received from commissions, interest, and other sources, and all expenses, commissions, and interest paid, by the dealer;

(d)  all the assets and liabilities (including contingent liabilities) of the dealer;

(e)  all securities that are the property of the dealer, showing by whom the securities, or the documents of title to the securities, are held and, where they are held by some other person, whether or not they are held as security against loans or advances;

(f)  all securities that are not the property of the dealer and for which the dealer or a nominee controlled by the dealer is accountable, showing by whom, and for whom, the securities or the documents of title to the securities are held and the extent to which they are either held for safe custody or deposited with a third party as security for loans or advances made to the dealer;

(g)  all purchases and sales of options made by the dealer and all fees (being option money) arising from them;

(h)  all arbitrage transactions entered into by the dealer; and

(j)  all underwriting transactions entered into by the dealer.

856(7)  [Separate particulars of every transaction]  

The records shall be kept in sufficient detail to show separately particulars of every transaction by the dealer.

856(8)  [Day of each transaction]  

The records shall specify the day on which, or the period during which, each transaction by the dealer took place.

856(9)  [Copies of documents showing names of security holders]  

The records shall contain copies of acknowledgments of the receipt of securities or of documents of title to securities received by the dealer from clients for sale or safe custody clearly showing the name or names in which the particular securities are registered.

856(10)  [Particulars of transactions with certain persons to be kept]  

The records shall be kept in sufficient detail to show separately particulars of all transactions by the dealer with, or for the account of:

(a)  clients of the dealer, excluding, where the dealer carries on business in partnership, the partners of the firm;

(b)  the dealer or, where the dealer carries on business in partnership, the partners of the firm;

(c)  other dealers; and

(d)  employees of the dealer.

856(11)  [Entry deemed to be made by dealer]  

An entry in the records shall, unless the contrary is proved, be deemed to have been made by, or with the authority of, the dealer.

856(12)  [Conversion of accounts into English]  

Where any of the records is not kept in writing in the English language, the dealer shall, if required to convert the financial records concerned into writing in the English language by a person who is entitled to examine the record, comply with the requirement within a reasonable time.

856(13)  [Records may be kept as part of other business]  

The dealer does not contravene this section merely because some or all of the records are kept as a part of, or in conjunction with, the records relating to any other business that is carried on by the dealer.

856(14)  [Records kept outside Australia]  

Where any of the records are kept outside Australia, the dealer shall:

(a)  cause to be sent to and kept at a place in Australia such particulars with respect to the business dealt with in those records as will enable true and fair profit and loss statements and balance sheets to be prepared; and

(b)  if required by the Commission to produce those records at a place in Australia, comply with the requirement not later than 28 days after the requirement is made.

856(15)  [No limitation of generality]  

Nothing in this section limits the generality of anything else in it.