THE CORPORATIONS LAW

CHAPTER 7 - SECURITIES

PART 7.4 - CONDUCT OF SECURITIES BUSINESS

Division 1 - Regulation of certain activities

SECTION 842   ISSUE OF CONTRACT NOTES  

842(1)  (Application of section)  

This section applies:

(a)  in relation to a dealer (other than an exempt dealer) in relation to a transaction of sale or purchase of securities; or

(b)  in relation to an exempt dealer, in relation to a transaction of sale or purchase of securities that is entered into in the course of a securities business that the exempt dealer carries on in the capacity of personal representative of a dead dealer.

842(2)  (Persons to whom contract notes to be given)  

A dealer shall, in respect of a transaction of sale or purchase of securities, immediately give a contract note that complies with subsection (3) to:

(a)  where the transaction took place in the ordinary course of business on a stock market and the dealer entered into the transaction otherwise than as principal - the person for whom the dealer entered into the transaction;

(b)  where the transaction did not take place in the ordinary course of business on a stock market and the dealer entered into the transaction otherwise than as principal - the person for whom the dealer entered into the transaction and the person with whom the dealer entered into the transaction; and

(c)  where the transaction did not take place in the ordinary course of business on a stock market and the dealer entered into the transaction as principal - the person with whom the dealer entered into the transaction.

842(3)  (Contents of contract note)  

A contract note given by a dealer under subsection (2) shall specify:

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

(b)  each securities exchange (if any) of which the dealer is a member;

(c)  if the dealer is dealing as principal with a person who is not the holder of a dealers licence - that the dealer is so dealing;

(d)  the name of the person to whom the dealer gives the contract note;

(e)  the day on which the transaction took place and, if the transaction did not take place in the ordinary course of business on a stock market, a statement to that effect;

(f)  the number, or amount and description, of the securities that are the subject of the contract;

(g)  the price per unit of the securities;

(h)  the amount of the consideration;

(j)  the amount of commission charged;

(k)  the amounts of all stamp duties or other duties and taxes payable in connection with the contract; and

(m)  if an amount is to be added to, or deducted from, the settlement amount in respect of the right to a benefit bought or sold together with the securities - the first-mentioned amount and the nature of the benefit.

842(4)  (Name of person)  

A dealer shall not include in a contract note given under subsection (2), as the name of the person with or for whom the dealer has entered into the transaction, a name that the dealer knows, or could reasonably be expected to know, is not the name by which that person is ordinarily known.

842(5)  (Acting as principal)  

A reference in this section to a dealer dealing, or entering into a transaction, as principal includes a reference to a person:

(a)  dealing or entering into a transaction on behalf of an associate of the dealer;

(b)  dealing in securities on behalf of a body corporate in which the dealer has a controlling interest; or

(c)  where the dealer carries on business as a dealer in partnership - dealing in securities on behalf of a body corporate in which the dealer's interest and the interests of the dealer's partners together constitute a controlling interest.

842(6)  (Explanation of concepts)  

For the purposes of this section:

(a)  a dealer who is a member of a securities exchange shall not be taken to have entered into a transaction as principal merely because the transaction was entered into with another dealer who is a member of a securities exchange; and

(b)  a transaction takes place in the ordinary course of business on a stock market if it takes place in prescribed circumstances or is a transaction that is a prescribed transaction for the purposes of this section.

842(7)  [Circumstances when not associate]  

Despite Division 2 of Part 1.2, a person is not an associate of another person for the purposes of this section merely because the first-mentioned person is:

(a)  a partner of the other person otherwise than because the first-mentioned person carries on a business of dealing in securities in partnership with the other person; or

(b)  a director of a body corporate of which the other person is also a director, whether or not the body corporate carries on a business of dealing in securities.