THE CORPORATIONS LAW

CHAPTER 8 - THE FUTURES INDUSTRY

PART 8.4 - CONDUCT OF FUTURES BUSINESS

SECTION 1206   ISSUE OF CONTRACT NOTES  

1206(1)  [Broker to give contract note]  

A futures broker shall, in respect of a transaction, being the acquisition or disposal of a futures contract, that is entered into by the broker on behalf of another person, give as soon as practicable:

(a)  in a case where the transaction is not an operation by the broker on a discretionary account - to that other person; or

(b)  in a case where the transaction is an operation by the broker on a discretionary account - to the person, or to each person, as the case requires, who gave instructions to the broker authorising the broker to operate on the discretionary account, other than a person who agrees in the prescribed manner to waive the operation of this paragraph;

a contract note that complies with subsection (3), (4) or (5), as the case requires.

1206(2)  [Exception where broker holds licence]  

Subsection (1) does not require a futures broker to give a contract note to a person in respect of a transaction if the person was at the time of the transaction the holder of a futures brokers licence.

1206(3)  [Contents of contract note]  

A contract note given by a futures broker under subsection (1) in respect of a transaction, being the acquisition or disposal of a futures contract (other than a futures option or an eligible exchange-traded option), shall include:

(a)  the name or style under which the broker carries on business as a futures broker and the address of the principal place at which the broker so carries on business;

(b)  the name of the person to whom the broker gives the contract note;

(c)  the day on which the transaction took place;

(d)  a description of the futures contract sufficient to identify the nature of the transaction, including:

(i) in a case where the futures contract is a commodity agreement - a description of the commodity and a statement of the contract price;

(ii) in a case where the futures contract is an adjustment agreement:

(A) a description of the class of adjustment agreements in which the futures contract is included;

(B) a statement of the contract price; and

(C) if the transaction is the completion of the futures contract - the value or worth (as determined in accordance with the futures contract) of the futures contract at the time of that completion; and

(iii) in a case where the transaction is a liquidating trade - details of the liquidating trade and of the futures contract that is intended to be closed out following the entering into of the liquidating trade;

(e)  the deposit paid or payable in respect of the transaction;

(f)  the month and year for the performance or settlement of the contract;

(g)  in a case where the transaction took place on a futures market of a futures exchange or of a recognised futures exchange, or on an exempt futures market - a name or abbreviation by which the futures exchange, recognised futures exchange or exempt futures market, as the case may be, is generally known;

(h)  a statement of the amount of commission charged or the rate (if any) at which the commission was charged; and

(j)  a statement of the amounts (if any) of all stamp duties and other duties and taxes payable in connection with the transaction.

1206(4)  [Contents where transaction involves futures option]  

A contract note given by a futures broker under subsection (1) in respect of a transaction, being the acquisition or disposal of a futures option, shall include:

(a)  the matters specified in paragraphs (3)(a), (b), (c), (g), (h) and (j);

(b)  a description of the class of futures contracts in which is included the futures contract to which the futures option relates;

(c)  the month and year for performance or settlement of the futures contract to which the futures option relates;

(d)  the date by which the purchaser of the futures option, in order to exercise the futures option, must declare an intention to exercise the futures option;

(e)  a statement of the amount of the premium; and

(f)  details of the price at which the purchaser of the futures option has, by virtue of the futures option, an option or Chapter 8 right to assume a bought position, or sold position, as the case requires, in relation to the futures contract to which the futures option relates.

1206(5)  [Contents where transaction involves exchange-traded option]  

A contract note given by a futures broker under subsection (1) in respect of a transaction, being the acquisition or disposal of an eligible exchange-traded option (in this subsection called the ``option''), shall include:

(a)  the matters specified in paragraphs (3)(a), (b), (c), (g), (h) and (j);

(b)  a description of the commodity or index to which the option relates;

(c)  the date by which the purchaser of the option, in order to exercise the option, must declare an intention to exercise the option;

(d)  a statement of the amount of the premium; and

(e)  details of:

(i) in a case where the option relates to a commodity - the price at which the purchaser of the option has, by virtue of the option, an option or right to purchase, or sell, as the case requires, that commodity; or

(ii) in a case where the purchaser of the option has, by virtue of the option, an option or right to be paid an amount of money to be determined by reference to the amount by which a specified number is greater or less than the number of a specified index - the specified number and the manner in which that amount of money is to be determined.

1206(6)  [Note not to include certain names]  

A futures broker shall not include in a contract note given under subsection (1), as the name of a person with or on behalf of whom the broker has entered into the transaction, a name that the broker knows, or could reasonably be expected to know, is not a name by which that person is ordinarily known.

1206(7)  [Same class of futures contracts]  

For the purposes of this section, a futures contract is included in the same class of futures contracts as another futures contract if, and only if, the first-mentioned futures contract is of the same kind as the other futures contract.