THE CORPORATIONS LAW

CHAPTER 8 - THE FUTURES INDUSTRY

PART 8.5 - FINANCIAL STATEMENTS AND AUDIT

SECTION 1213   ACCOUNTS TO BE KEPT BY FUTURES BROKERS  

1213(1)  [Type and manner of records]  

A futures broker shall:

(a)  keep such financial records as correctly record and explain the transactions and financial position of the business of dealing in futures contracts carried on by the broker;

(b)  keep financial records in such a manner as will enable true and fair profit and loss statements and balance sheets to be prepared from time to time; and

(c)  keep financial records in such a manner as will enable profit and loss statements and balance sheets of the business of dealing in futures contracts carried on by the broker to be conveniently and properly audited.

1213(2)  [Requirements for accounts]  

Without limiting the generality of subsection (1), a futures broker shall be deemed not to have complied with that subsection in relation to records if those records:

(a)  are not 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;

(b)  are not kept in sufficient detail to show particulars of:

(i) all money received or paid by the broker, including money paid to, or disbursed from, an account of the kind referred to in paragraph 1209(3)(c);

(ii) all dealings in futures contracts made by the broker, the charges and credits arising from them, and the name of the person on whose behalf each dealing was effected;

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

(iv) all the assets and liabilities (including contingent liabilities) of the broker;

(v) all futures contracts to which the broker has become a party as a result of trading on the broker's own account;

(vi) all futures contracts dealt with by the broker pursuant to instructions given by another person, showing who gave the instructions;

(vii) all property that is property of the broker and in respect of which the business rules of a futures exchange authorise the making of a futures contract in the futures market of the futures exchange, showing by whom the property is held and, if held by some other person, whether or not the property is so held as security against loans or advances; and

(viii) all such property that is not property of the broker and for which the broker or any nominee controlled by the broker is accountable, showing by whom, and for whom, the property is held and the extent to which the property is either held for safe custody or deposited with a third party as security for loans or advances made to the broker;

(c)  are not kept in sufficient detail to show separately particulars of every transaction by the broker;

(d)  do not specify the day on which or the period during which each transaction by the broker took place; or

(e)  do not contain copies of acknowledgments of the receipts of property received by the broker from clients.

1213(3)  [Records of discretionary accounts]  

Without affecting the operation of subsections (1) and (2), a futures broker shall be deemed not to have complied with subsection (1) in relation to records if, in respect of a discretionary account on which the broker operates, those records are not kept in sufficient detail to show the particulars that the broker is required to furnish to clients in order to comply with subsection 1207(2).

1213(4)  [Particulars of transactions]  

Without affecting the operation of subsection (2) or (3), a futures broker shall keep records in sufficient detail to show separately particulars of all transactions by the broker:

(a)  with, on behalf of, or on the account of, clients of the broker, excluding, in a case where the broker carries on business in partnership, the partners in the firm;

(b)  in a case where the broker carries on business in partnership - on the broker's own account or with, on behalf of, or on the account of, the partners in the firm;

(c)  in a case where the broker does not carry on business in partnership - on the broker's own account;

(d)  with, on behalf of, or on the account of, other futures brokers;

(e)  with, on behalf of, or on the account of, representatives of the broker; and

(f)  with, on behalf of, or on the account of, employees of the broker.

1213(5)  [Deemed authorisation]  

An entry in the financial and other records of a futures broker required to be kept in accordance with this section, and any matter recorded by a futures exchange in relation to a member pursuant to subsection 1270(3) shall be deemed to have been made by, or with the authority of, the broker or member.

1213(6)  [Conversion of records into English language]  

Where a record required by this section to be kept is not kept in writing in the English language, the futures broker shall, if required to convert the record into writing in the English language by a person who is entitled to examine the record, comply with the requirement within a reasonable time.

1213(7)  [Record kept as part of other records]  

Notwithstanding any other provision of this section, a futures broker shall not be deemed to have failed to keep a record referred to in subsection (1) by reason only that the record is kept as a part of, or in conjunction with, the records relating to any business other than dealing in futures contracts that is carried on by the broker.

1213(8)  [Records kept outside Australia]  

If financial records or other records are kept by a futures broker at a place outside Australia, the broker shall 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.

1213(9)  [Production of records kept outside Australia]  

If any financial records of a futures broker are kept at a place outside Australia, the broker shall, 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.