PART XII | Division 1 — Prohibited Conduct — Securities |
| Application of this Division |
196. This Division shall apply to —| (a) | acts occurring within Singapore in relation to —| (i) | securities of any corporation, whether formed or carrying on business in Singapore or elsewhere; | | (ia) | securities of any business trust; or | | (ii) | securities listed for quotation or quoted on a securities market in Singapore or elsewhere; and |
| | (b) | acts occurring outside Singapore, in relation to —| (i) | securities of a corporation that is formed or carrying on business in Singapore; | | (ia) | securities of a business trust, the trustee of which is formed in Singapore or carries on business on behalf of the business trust in Singapore; or | | (ii) | securities listed for quotation or quoted on a securities market in Singapore. [1/2005] [Malaysia SIA, s. 88C] |
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| Interpretation of this Division |
196A. In this Division —| “debenture” has the same meaning as in section 2 and, in relation to a business trust, means any debenture issued by the trustee of the business trust in its capacity as trustee of the business trust; |
“securities” —| (a) | in relation to a corporation, for the purposes of sections 196(a)(i) and (b)(i), 198, 202 and 203, means —| (i) | debentures, stocks or shares issued or proposed to be issued by a corporation; | | (ii) | any right, option or derivative in respect of any such debentures, stocks or shares; or | | (iii) | any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —| (A) | the value or price of any such debentures, stocks or shares; | | (B) | the value or price of any group of any such debentures, stocks or shares; or | | (C) | an index of any such debentures, stocks or shares, |
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| (AA) | futures contracts; | | (BB) | bills of exchange; | | (CC) | promissory notes; or | | (DD) | certificates of deposit issued by a bank or finance company; |
| | (b) | in relation to a business trust, for the purposes of sections 196(a)(ia) and (b)(ia), 198, 202 and 203, means —| (i) | units in a business trust; | | (ii) | derivatives of units in a business trust; | | (iii) | debentures of a business trust; or | | (iv) | any right, option or derivative in respect of any such debentures, |
| (A) | futures contracts; | | (B) | bills of exchange; or | | (C) | promissory notes; and |
| | (c) | in any other case, has the same meaning as in section 2. [1/2005] |
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| False trading and market rigging transactions |
197.—(1) No person shall create, or do anything that is intended or likely to create a false or misleading appearance —| (a) | of active trading in any securities on a securities market; or | | (b) | with respect to the market for, or the price of, such securities. |
| (2) No person shall, by means of any purchase or sale of any securities that do not involve a change in the beneficial ownership of those securities, or by any fictitious transaction or device, maintain, inflate, depress, or cause fluctuations in, the market price of any securities. |
(3) Without prejudice to the generality of subsection (1), a person who —| (a) | effects, takes part in, is concerned in or carries out, directly or indirectly, any transaction of purchase or sale of any securities, being a transaction that does not involve any change in the beneficial ownership of the securities; | | (b) | makes or causes to be made an offer to sell any securities at a specified price where he has made or caused to be made or proposes to make or to cause to be made, or knows that a person associated with him has made or caused to be made or proposes to make or to cause to be made, an offer to purchase the same number, or substantially the same number, of securities at a price that is substantially the same as the first-mentioned price; or | | (c) | makes or causes to be made an offer to purchase any securities at a specified price where he has made or caused to be made or proposes to make or to cause to be made, or knows that a person associated with him has made or caused to be made or proposes to make or to cause to be made, an offer to sell the same number, or substantially the same number, of securities at a price that is substantially the same as the first-mentioned price, |
| shall be deemed to have created a false or misleading appearance of active trading in securities on a securities market. |
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| (4) In any proceedings against a person for a contravention of subsection (1) because of an act referred to in subsection (3), it is a defence if the defendant establishes that the purpose or purposes for which he did the act was not, or did not include, the purpose of creating a false or misleading appearance of active trading in securities on a securities market. |
| (5) For the purposes of this section, a purchase or sale of securities does not involve a change in the beneficial ownership if a person who had an interest in the securities before the purchase or sale, or a person associated with the first-mentioned person in relation to those securities, has an interest in the securities after the purchase or sale. |
| (6) In any proceedings against a person for a contravention of subsection (2) in relation to a purchase or sale of securities that did not involve a change in the beneficial ownership of those securities, it is a defence if the defendant establishes that the purpose or purposes for which he purchased or sold the securities was not, or did not include, the purpose of creating a false or misleading appearance with respect to the market for, or the price of, securities. |
(7) The reference in subsection (3)(a) to a transaction of purchase or sale of securities includes —| (a) | a reference to the making of an offer to purchase or sell securities; and | | (b) | a reference to the making of an invitation, however expressed, that expressly or impliedly invites a person to offer to purchase or sell securities. |
[SIA, s. 97; Aust. Corporations 2001, s. 998] |
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| Securities market manipulation |
198.—(1) No person shall effect, take part in, be concerned in or carry out, directly or indirectly, 2 or more transactions in securities of a corporation, being transactions that have, or are likely to have, the effect of raising, lowering, maintaining or stabilising the price of securities of the corporation on a securities market, with intent to induce other persons to subscribe for, purchase or sell securities of the corporation or of a related corporation.| (1A) No person shall effect, take part in, be concerned in or carry out, directly or indirectly, 2 or more transactions in securities of a business trust, being transactions that have, or are likely to have, the effect of raising, lowering, maintaining or stabilising the price of securities of the business trust on a securities market, with intent to induce other persons to subscribe for, purchase or sell securities of the business trust. [1/2005] |
(2) A reference in subsection (1) or (1A) to transactions in securities of a corporation or securities of a business trust, as the case may be, includes —| (a) | a reference to the making of an offer to purchase or sell such securities of the corporation or such securities of the business trust, as the case may be; and | | (b) | a reference to the making of an invitation, however expressed, that directly or indirectly invites a person to offer to purchase or sell such securities of the corporation or such securities of the business trust, as the case may be. [1/2005] |
[SIA, s. 98] |
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| False or misleading statements, etc. |
199. No person shall make a statement, or disseminate information, that is false or misleading in a material particular and is likely —| (a) | to induce other persons to subscribe for securities; | | (b) | to induce the sale or purchase of securities by other persons; or | | (c) | to have the effect of raising, lowering, maintaining or stabilising the market price of securities, |
| if, when he makes the statement or disseminates the information — |
| (i) | he does not care whether the statement or information is true or false; or | | (ii) | he knows or ought reasonably to have known that the statement or information is false or misleading in a material particular. |
[SIA, s. 99; Aust. Corporations 2001, s. 999] |
| Fraudulently inducing persons to deal in securities |
200.—(1) No person shall —| (a) | by making or publishing any statement, promise or forecast that he knows or ought reasonably to have known to be misleading, false or deceptive; | | (b) | by any dishonest concealment of material facts; | | (c) | by the reckless making or publishing of any statement, promise or forecast that is misleading, false or deceptive; or | | (d) | by recording or storing in, or by means of, any mechanical, electronic or other device information that he knows to be false or misleading in a material particular, |
| induce or attempt to induce another person to deal in securities. |
| (2) In any proceedings against a person for a contravention of subsection (1) constituted by recording or storing information as mentioned in subsection (1)(d), it is a defence if it is established that, at the time when the defendant so recorded or stored the information, he had no reasonable grounds for expecting that the information would be available to any other person. |
| (3) In any proceedings against a person for a contravention of subsection (1), the opinion of any registered or public accountant as to the financial position of any company at any time or during any period in respect of which he has made an audit or examination of the affairs of the company according to recognised audit practice shall be admissible, for any party to the proceedings, as evidence of the financial position of the company at that time or during that period, notwithstanding that the opinion is based in whole or in part on book-entries, documents or vouchers or on written or verbal statements by other persons. [SIA, s. 100; Companies, s. 404 (4)] |
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| Employment of manipulative and deceptive devices |
201. No person shall, directly or indirectly, in connection with the subscription, purchase or sale of any securities —| (a) | employ any device, scheme or artifice to defraud; | | (b) | engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person; | | (c) | make any statement he knows to be false in a material particular; or | | (d) | omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. |
[SIA, s.102] |
| Dissemination of information about illegal transactions |
202. No person shall circulate or disseminate, or authorise or be concerned in the circulation or dissemination of, any statement or information to the effect that the price of any securities of a corporation or any securities of a business trust will, or is likely, to rise or fall or be maintained by reason of any transaction entered into or to be entered into or other act or thing done or to be done in relation to securities of that corporation, or of a corporation that is related to that corporation, or securities of that business trust, as the case may be, which to his knowledge, was entered into or done in contravention of section 197, 198, 199, 200 or 201 or if entered into or done would be in contravention of section 197, 198, 199, 200 or 201 if —| (a) | the person, or a person associated with the person, has entered into or purports to enter into any such transaction or has done or purports to do any such act or thing; or | | (b) | the person, or a person associated with the person, has received, or expects to receive, directly or indirectly, any consideration or benefit for circulating or disseminating, or authorising or being concerned in the circulation or dissemination, the statement or information. [1/2005] |
[SIA, s. 101] |
203.—(1) This section shall apply to —| (a) | an entity the securities of which are listed for quotation on a securities exchange; | | (b) | a trustee of a business trust, where the securities of the business trust are listed for quotation on a securities exchange; or | | (c) | a responsible person of a collective investment scheme, where the units of the collective investment scheme are listed for quotation on a securities exchange, |
| if the entity, trustee or responsible person is required by the securities exchange under the listing rules or any other requirement of the securities exchange to notify the securities exchange of information on specified events or matters as they occur or arise for the purpose of the securities exchange making that information available to a securities market operated by the securities exchange. |
[1/2005] | (2) The persons specified in subsection (1)(a), (b) or (c) shall not intentionally, recklessly or negligently fail to notify the securities exchange of such information as is required to be disclosed by the securities exchange under the listing rules or any other requirement of the securities exchange. [1/2005] |
| (3) Notwithstanding section 204, a contravention of subsection (2) shall not be an offence unless the failure to notify is intentional or reckless. [Aust. Corporations 2001, s. 1001A] |
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| Penalties under this Division |
204.—(1) Any person who contravenes any of the provisions of this Division shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 7 years or to both.| (2) No proceedings shall be instituted against a person for an offence in respect of a contravention of this Division after a court has made an order against him for the payment of a civil penalty under section 232 in respect of the contravention. [SIA, s. 104] |
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| Division 2 — Prohibited Conduct — Futures Contracts, Leveraged Foreign Exchange Trading |
| Application of this Division |
205. This Division shall apply to —| (a) | acts occurring within Singapore, in relation to —| (i) | futures contracts, whether traded on a futures market in Singapore or elsewhere; or | | (ii) | foreign exchange in connection with leveraged foreign exchange trading, whether in Singapore or elsewhere; and |
| | (b) | acts occurring outside Singapore, in relation to —| (i) | futures contracts traded on a futures market in Singapore; | | (ii) | foreign exchange in connection with leveraged foreign exchange trading in Singapore; or | | (iii) | foreign exchange in connection with leveraged foreign exchange trading that is accessible from Singapore. |
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| 206. No person shall create, or do anything that is intended or likely to create, a false or misleading appearance of active trading in any futures contract on a futures market or in connection with leveraged foreign exchange trading, or a false or misleading appearance with respect to the market for, or the price of futures contracts on a futures market or foreign exchange in connection with leveraged foreign exchange trading. [FTA, s. 50] |
207.—(1) No person shall knowingly execute, or hold himself out as having executed, an order for the purchase or sale of a futures contract on a futures market, without having effected a bona fide purchase or sale of the futures contract in accordance with the business rules and practices of the futures market.| (2) No person shall knowingly execute, or hold himself out as having executed, an order to make a purchase or sale of foreign exchange in connection with leveraged foreign exchange trading, without having effected a bona fide purchase or sale in accordance with the order. [FTA, s. 51] |
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| Manipulation of price of futures contract and cornering |
208. No person shall, directly or indirectly —| (a) | manipulate or attempt to manipulate the price of a futures contract that may be dealt in on a futures market, or of any commodity which is the subject of such futures contract; or | | (b) | corner, or attempt to corner, any commodity which is the subject of a futures contract. |
[FTA, s. 53] |
| Fraudulently inducing persons to trade in futures contracts |
209.—(1) No person shall —| (a) | by making or publishing any statement, promise or forecast that he knows or ought reasonably to have known to be false, misleading or deceptive; | | (b) | by any dishonest concealment of material facts; | | (c) | by the reckless making or publishing of any statement, promise or forecast that is false, misleading or deceptive; or | | (d) | by recording or storing in, or by means of, any mechanical, electronic or other device information that he knows to be false or misleading in a material particular, |
| induce or attempt to induce another person to trade in a futures contract or engage in leveraged foreign exchange trading. |
| (2) In any proceedings against a person for a contravention of subsection (1) constituted by recording or storing information as mentioned in subsection (1)(d), it is a defence if it is established that, at the time when the defendant so recorded or stored the information, he had no reasonable grounds for expecting that the information would be available to any other person. [FTA, s. 55] |
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| Employment of fraudulent or deceptive devices, etc. |
210. No person shall, directly or indirectly, in connection with any transaction involving trading in a futures contract or leveraged foreign exchange trading —| (a) | employ any device, scheme or artifice to defraud; | | (b) | engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person; | | (c) | make any false statement of a material fact; or | | (d) | omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. |
[FTA, s. 54] |
| Dissemination of information about illegal transactions |
211. No person shall circulate, disseminate, or authorise, or be concerned in the circulation or dissemination of, any statement or information to the effect that the price of a class of futures contracts or foreign exchange in connection with leveraged foreign exchange trading will, or is likely to, rise or fall or be maintained because of the market operations of one or more persons which, to his knowledge, are conducted in contravention of section 206, 207, 208, 209 or 210 if —| (a) | the person, or a person associated with the person, has conducted such market operations; or | | (b) | the person, or a person associated with the person, has received, or expects to receive, directly or indirectly, any consideration or benefit for circulating or disseminating, or authorising or being concerned in the circulation or dissemination, the statement or information. |
[FTA, s. 52] |
| Penalties under this Division |
212.—(1) Any person who contravenes any of the provisions of this Division shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 7 years or to both.| (2) No proceedings shall be instituted against a person for an offence in respect of a contravention of this Division after a court has made an order against him for the payment of a civil penalty under section 232 for the contravention. [FTA, s. 56] |
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| Division 3 — Insider Trading |
| Application of this Division |
213. This Division shall apply to —| (a) | acts occurring within Singapore, in relation to —| (i) | securities of any corporation, whether formed or carrying on business in Singapore or elsewhere; | | (ia) | securities of any business trust; | | (ii) | securities listed for quotation or quoted on a securities market in Singapore or elsewhere; or | | (iii) | securities traded on a futures market in Singapore or elsewhere; and |
| | (b) | acts occurring outside Singapore, in relation to —| (i) | securities of a corporation that is formed or carries on business in Singapore; | | (ia) | securities of a business trust, the trustee of which is formed in Singapore or carries on business on behalf of the business trust in Singapore; | | (ii) | securities listed for quotation or quoted on a securities market in Singapore; or | | (iii) | securities traded on a futures market in Singapore. [1/2005] [Malaysia SIA, s. 89P] |
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| Interpretation of this Division |
214. In this Division —| “debenture” has the same meaning as in section 2 and, in relation to a business trust, means a debenture issued by the trustee of the business trust in its capacity as trustee of the business trust; |
| “financial performance”, in relation to a business trust, means the performance of the business relating to the trust property of the business trust which is managed and operated by the trustee of the business trust; |
“information” includes —| (a) | matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; | | (b) | matters relating to the intentions, or the likely intentions, of a person; | | (c) | matters relating to negotiations or proposals with respect to —| (i) | commercial dealings; | | (ii) | dealing in securities; or | | (iii) | trading in futures contract; |
| | (d) | information relating to the financial performance of a corporation or business trust, or otherwise; | | (e) | information that a person proposes to enter into, or had previously entered into one or more transactions or agreements in relation to securities or has prepared or proposes to issue a statement relating to such securities; and | | (f) | matters relating to the future; |
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| “purchase”, in relation to securities, includes, in the case of an option contract under which a party acquires an option or right from another party, acquiring the option or right under the contract, or taking an assignment of the option or right, whether or not on another’s behalf; |
“securities” means —| (a) | in relation to a corporation, for the purposes of sections 213(a)(i) and (b)(i) and 218 —| (i) | debentures, stocks or shares issued or proposed to be issued by a corporation; | | (ii) | any right, option or derivative in respect of any such debentures, stocks or shares; | | (iii) | any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —| (A) | the value or price of any such debentures, stocks or shares; | | (B) | the value or price of any group of any such debentures, stocks or shares; or | | (C) | an index of any such debentures, stocks or shares; or |
| | (iv) | a futures contract only if the commodity which is the subject of the futures contract is a share or stock of a corporation; |
| | (b) | in relation to a business trust, for the purposes of sections 213(a)(ia) and (b)(ia) and 218(1A) and (4A) —| (i) | units in a business trust; | | (ii) | derivatives of units in a business trust; | | (iii) | debentures of a business trust; or | | (iv) | any right, option or derivative in respect of any such debentures; and |
| | (c) | in any other case —| (i) | debentures or stocks issued or proposed to be issued by a government; | | (ii) | debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporate; | | (iii) | any right, option or derivative in respect of any such debentures, stocks or shares; | | (iv) | any unit in a collective investment scheme; | | (v) | any unit, or derivative of a unit, in a business trust; | | (vi) | any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —| (A) | the value or price of any such debentures, stocks, shares, units in a collective investment scheme or units in a business trust; | | (B) | the value or price of any group of any such debentures, stocks, shares, units in a collective investment scheme or units in a business trust; or | | (C) | an index of any such debentures, stocks, shares, units in a collective investment scheme or units in a business trust; or |
| | (vii) | a futures contract only if the commodity which is the subject of the futures contract is a share or share index, or stock or stock index, |
| (AA) | bills of exchange; | | (BB) | promissory notes; or | | (CC) | certificates of deposit issued by a bank or finance company; |
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“sell”, in relation to securities, includes, in the case of an option contract under which a party acquires an option or right from another party —| (a) | grant or assign the option or right; or | | (b) | take, or cause to be taken, such action as releases the option or right,| whether or not on another’s behalf; |
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| “trust property” has the same meaning as in section 2 of the Business Trusts Act (Cap. 31A). [1/2005] |
[SIA, s. 2; Malaysia SIA, s. 89] |
| Information generally available |
215. For the purposes of this Division, information is generally available if —| (a) | it consists of readily observable matter; | | (b) | without limiting the generality of paragraph (a) —| (i) | it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in securities of a kind whose price or value might be affected by the information; and | | (ii) | since it was so made known, a reasonable period for it to be disseminated among such persons has elapsed; or |
| | (c) | it consists of deductions, conclusions or inferences made or drawn from either or both of the following:| (i) | information referred to in paragraph (a); | | (ii) | information made known as referred to in paragraph (b)(i). [Aust. Corporations 2001, s. 1002B] |
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| Material effect on price or value of securities |
| 216. For the purposes of this Division, a reasonable person would be taken to expect information to have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, buy or sell the first-mentioned securities. [Aust. Corporations 2001, s. 1002C] |
| Trading and procuring trading in securities |
217.—(1) For the purposes of this Division, trading in securities that is ordinarily permitted on the securities market or futures market shall be taken to be permitted on that securities market or futures market even though trading in any such securities on that securities market or futures market is suspended.| (2) For the purposes of this Division but without limiting the meaning that the expression “procure” has apart from this section, if a person incites, induces, or encourages an act or omission by another person, the first-mentioned person is taken to procure the act or omission by the other person. [Aust. Corporations 2001, s. 1002D] |
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| Prohibited conduct by connected person in possession of inside information |
218.—(1) Subject to this Division, where —| (a) | a person who is connected to a corporation possesses information concerning that corporation that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of that corporation; and | | (b) | the connected person knows or ought reasonably to know that —| (i) | the information is not generally available; and | | (ii) | if it were generally available, it might have a material effect on the price or value of those securities of that corporation, |
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| subsections (2), (3), (4), (5) and (6) shall apply. |
[1/2005] (1A) Subject to this Division, where —| (a) | a person who is connected to any corporation, where such corporation —| (i) | in relation to a business trust, acts as its trustee or manages or operates the business trust; or | | (ii) | in relation to a collective investment scheme that invests only in real estate and real estate-related assets specified by the Authority in the Code on Collective Investment Schemes and all or any units of which are listed on a securities exchange, is the trustee or manager of the scheme, |
| possesses information concerning that corporation, business trust or scheme, as the case may be, that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities of that corporation, of securities of that business trust or of units in that scheme, as the case may be; and |
| | (b) | the connected person knows or ought reasonably to know that —| (i) | the information is not generally available; and | | (ii) | if it were generally available, it might have a material effect on the price or value of those securities of that corporation, of those securities of that business trust or of those units in that scheme, as the case may be, |
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| subsections (2), (3), (4A), (5) and (6) shall apply. |
[1/2005] |
(2) The connected person must not (whether as principal or agent) —| (a) | subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any such securities referred to in subsection (1) or (1A), as the case may be; or | | (b) | procure another person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities referred to in subsection (1) or (1A), as the case may be. [1/2005] |
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(3) Where trading in the securities referred to in subsection (1) or (1A) is permitted on the securities market of a securities exchange or futures market of a futures exchange, the connected person must not, directly or indirectly, communicate the information, or cause the information to be communicated, to another person if the connected person knows, or ought reasonably to know, that the other person would or would be likely to —| (a) | subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any such securities; or | | (b) | procure a third person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities. [1/2005] |
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(4) In any proceedings for a contravention of subsection (2) or (3) against a person connected to a corporation referred to in subsection (1), where the prosecution or plaintiff proves that the connected person was at the material time —| (a) | in possession of information concerning the corporation to which he was connected; and | | (b) | the information was not generally available, |
| it shall be presumed, until the contrary is proved, that the connected person knew at the material time that — |
| (i) | the information was not generally available; and | | (ii) | if the information were generally available, it might have a material effect on the price or value of securities of that corporation. [1/2005] |
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(4A) In any proceedings for a contravention of subsection (2) or (3) against a person connected to a corporation which —| (a) | in relation to a business trust, acts as its trustee or manages or operates the business trust; or | | (b) | in relation to a collective investment scheme, is the trustee or manager of the scheme, |
| as the case may be, referred to in subsection (1A), where the prosecution or plaintiff proves that the connected person was at the material time — |
| (i) | in possession of information concerning the corporation, business trust or scheme, as the case may be; and | | (ii) | the information was not generally available, |
| it shall be presumed, until the contrary is proved, that the connected person knew at the material time that — |
| (A) | the information was not generally available; and | | (B) | if the information were generally available, it might have a material effect on the price or value of securities of that corporation, of securities of that business trust or of units in the scheme, as the case may be. [1/2005] |
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(5) In this Division —| (a) | “connected person” means a person referred to in subsection (1) or (1A) who is connected to a corporation; and | | (b) | a person is connected to a corporation if —| (i) | he is an officer of that corporation or of a related corporation; | | (ii) | he is a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act (Cap. 50) in that corporation or in a related corporation; or | | (iii) | he occupies a position that may reasonably be expected to give him access to information of a kind to which this section applies by virtue of —| (A) | any professional or business relationship existing between himself (or his employer or a corporation of which he is an officer) and that corporation or a related corporation; or | | (B) | being an officer of a substantial shareholder within the meaning of Division 4 of Part IV of the Companies Act in that corporation or in a related corporation. [1/2005] |
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(6) In subsection (5), “officer”, in relation to a corporation, includes —| (a) | a director, secretary or employee of the corporation; | | (b) | a receiver, or receiver and manager, of property of the corporation; | | (c) | a judicial manager of the corporation; | | (d) | a liquidator of the corporation; and | | (e) | a trustee or other person administering a compromise or arrangement made between the corporation and another person. |
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| Prohibited conduct by other persons in possession of inside information |
219.—(1) Subject to this Division, where —| (a) | a person who is not a connected person referred to in section 218 (referred to in this section as the insider) possesses information that is not generally available but, if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of securities; and | | (b) | the insider knows that —| (i) | the information is not generally available; and | | (ii) | if it were generally available, it might have a material effect on the price or value of those securities, |
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| subsections (2) and (3) shall apply. |
(2) The insider must not (whether as principal or agent) —| (a) | subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any such securities; or | | (b) | procure another person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities. |
|
(3) Where trading in the securities referred to in subsection (1) is permitted on the securities market of a securities exchange or futures market of a futures exchange, the insider must not, directly or indirectly, communicate the information, or cause the information to be communicated, to another person if the insider knows, or ought reasonably to know, that the other person would or would be likely to —| (a) | subscribe for, purchase or sell, or enter into an agreement to subscribe for, purchase or sell, any such securities; or | | (b) | procure a third person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities. |
[Aust. Corporations 2001, s. 1002G] |
|
| Not necessary to prove intention to use |
| 220.—(1) For the avoidance of doubt, in any proceedings against a person for a contravention of section 218 or 219, it is not necessary for the prosecution or plaintiff to prove that the accused person or defendant intended to use the information referred to in section 218(1)(a) or (1A)(a) or 219(1)(a) in contravention of section 218 or 219, as the case may be. [1/2005] | (2) In any proceedings against a person for a contravention of section 218 or 219, it is not necessary for the prosecution or plaintiff to prove the absence of facts or circumstances which if they existed would, by virtue of sections 222 to 230 or any regulations made under section 341, preclude the act from constituting a contravention of section 218 or 219, as the case may be. [Malaysia SIA, s. 89F] |
|
| Penalties under this Division |
221.—(1) A person who contravenes section 218 or 219, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 or to imprisonment for a term not exceeding 7 years or to both.| (2) No proceedings shall be instituted against a person for an offence in respect of a contravention of section 218 or 219 after a court has made an order against him for the payment of a civil penalty under section 232 in respect of that contravention. [SIA, s.104] |
|
| Exception for redemption of units in collective investment scheme |
222. Sections 218(2) and 219(2) shall not apply in respect of the redemption of units in a collective investment scheme by a trustee or manager under a trust deed relating to that collective investment scheme in accordance with a buy-back covenant contained or deemed to be contained in the trust deed at a price that is required by the trust deed to be calculated, so far as is reasonably practicable, by reference to the underlying value of the assets less —| (a) | any liabilities of that collective investment scheme to which the units relates; and | | (b) | any reasonable charge for purchasing the units. [1/2005] |
[Malaysia SIA, s. 89N] |
| Exception for underwriters |
223.—(1) Sections 218(2) and 219(2) shall not apply in respect of —| (a) | subscribing for, or purchasing, securities under an underwriting agreement or a sub-underwriting agreement; | | (b) | entering into an agreement referred to in paragraph (a); or | | (c) | selling securities subscribed for, or purchased, under an agreement referred to in paragraph (a). [1/2005] |
(2) Sections 218(3) and 219(3) shall not apply in respect of the communication of information in relation to securities —| (a) | to a person solely for the purpose of procuring the person to enter into an underwriting agreement in relation to any such securities; or | | (b) | by a person who may be required under an underwriting agreement to subscribe for, or purchase, any such securities if the communication is made to another person solely for the purpose of procuring the other person to do either or both of the following:| (i) | enter into a sub-underwriting agreement in relation to any such securities; | | (ii) | subscribe for, or purchase, any such securities. [1/2005] [Aust. Corporations 2001, s. 1002J] |
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|
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| Exception for purchase pursuant to legal requirement |
| 224.—(1) Sections 218(2) and 219(2) shall not apply in respect of the purchase of securities pursuant to a requirement imposed by the Government, a statutory body or any regulatory authority, or any requirement imposed under any written law or order of court. [16/2003] | (2) Sections 218(2) and 219(2) shall not apply in respect of the sale of securities pursuant to any requirement imposed by the Government or any requirement imposed under any written law or order of court. [16/2003] [Aust. Corporations 2001, s. 1002K] |
|
| Exception for information communicated pursuant to legal requirement |
| 225. Sections 218(3) and 219(3) shall not apply in respect of the communication of information pursuant to a requirement imposed by the Government, a statutory body or any regulatory authority, or any requirement imposed under any written law or order of court. [Aust. Corporations 2001, s. 1002L] |
| Attribution of knowledge within corporations |
226.—(1) For the purposes of this Division —| (a) | a corporation is taken to possess any information which an officer of the corporation possesses and which came into his possession in the course of the performance of duties as such an officer; and | | (b) | if an officer of a corporation knows or ought reasonably to know any matter or thing because he is an officer of the corporation, it is to be presumed, until the contrary is proved, that the corporation knows or ought reasonably to know that matter or thing. |
(2) A corporation does not contravene section 218(2) or 219(2) by entering into a transaction or agreement at any time merely because of information in the possession of an officer of the corporation if —| (a) | the decision to enter into the transaction or agreement was taken on its behalf by a person other than that officer; | | (b) | it had in operation at that time arrangements that could reasonably be expected to ensure that the information was not communicated to the person who made the decision and that no advice with respect to the transaction or agreement was given to that person by a person in possession of the information; and | | (c) | the information was not so communicated and no such advice was so given. |
[Malaysia SIA, s. 89G] |
|
| Attribution of knowledge within partnerships and limited liability partnerships |
227.—(1) For the purposes of this Division —| (a) | a partner of a partnership or a limited liability partnership (as the case may be) is taken to possess any information —| (i) | which another partner of the partnership or limited liability partnership (as the case may be) possesses and which came into such other partner’s possession in his capacity as a partner of the partnership or limited liability partnership (as the case may be); or | | (ii) | which an employee of the partnership or a manager of a limited liability partnership (as the case may be) possesses and which came into the possession of such an employee or manager in the course of the performance of his duties as such an employee or manager; and |
| | (b) | if a partner or employee of a partnership or a partner, manager or employee of a limited liability partnership (as the case may be) knows or ought reasonably to know any matter or thing in his capacity as such a partner, manager or employee, it is to be presumed that every partner of the partnership or limited liability partnership (as the case may be) knows or ought reasonably to know that matter or thing. [5/2005] |
(2) The partners of a partnership or limited liability partnership (as the case may be) do not contravene section 218(2) or 219(2) by entering into a transaction or agreement at any time merely because one or more (but not all) of the partners, or a manager or managers, or an employee or employees, of the partnership or limited liability partnership (as the case may be) are in actual possession of information if —| (a) | the decision to enter into the transaction or agreement was taken on behalf of the partnership or limited liability partnership by any one or more of the following persons:| (i) | a partner who is taken to have possessed the information merely because another partner, or a manager or employee, of the partnership or limited liability partnership, was in possession of the information; | | (ii) | an employee of the partnership or limited liability partnership or a manager of the limited liability partnership who was not in possession of the information; |
| | (b) | the partnership or limited liability partnership had in operation at that time arrangements that could reasonably be expected to ensure that the information was not communicated to the person or persons who made the decision and that no advice with respect to the transaction or agreement was given to that person or any of those persons by a person in possession of the information; and | | (c) | the information was not so communicated and no such advice was so given. [5/2005] |
|
| (3) A partner of a partnership or limited liability partnership (as the case may be) does not contravene section 218(2) or 219(2) by entering into a transaction or agreement otherwise than on behalf of the partnership or limited liability partnership merely because he is taken to possess information that is in the possession of another partner, a manager or an employee of the partnership. [5/2005] [Malaysia SIA, s. 89H] |
|
| Exception for knowledge of person’s own intentions or activities |
| 228. An individual does not contravene section 218(2) or 219(2) by entering into a transaction or agreement in relation to securities merely because he is aware that he proposes to enter into, or has previously entered into, one or more transactions or agreements in relation to those securities. [Aust. Corporations 2001, s. 1002P] |
| Exception for corporations and its officers, etc. |
229.—(1) A corporation does not contravene section 218(2) or 219(2) by entering into a transaction or agreement in relation to securities merely because it is aware that it proposes to enter into or has previously entered into, one or more transactions or agreements in relation to those securities.| (2) Subject to subsection (3), a corporation does not contravene section 218(2) or 219(2) by entering into a transaction or agreement in relation to securities merely because an officer of the corporation is aware that the corporation proposes to enter into, or has previously entered into, one or more transactions or agreements in relation to those securities. |
| (3) Subsection (2) shall not apply unless the officer of the corporation mentioned in that subsection became aware of the matters referred to in that subsection in the course of the performance of duties as such an officer. |
| (4) Subject to subsection (5), a person does not contravene section 218(2) or 219(2) by entering into a transaction or agreement on behalf of a corporation in relation to securities merely because he is aware that the corporation proposes to enter into, or has previously entered into, one or more transactions or agreements in relation to those securities. |
| (5) Subsection (4) shall not apply unless the person became aware of the matters referred to in that subsection in the course of the performance of duties as an officer of the corporation or in the course of acting as an agent of the corporation. [Malaysia SIA, s. 89K] |
|
| Unsolicited transactions by holder of capital markets services licence and representatives |
230.—(1) The holder of a capital markets services licence to deal in securities or trade in futures contracts, or a representative of such a holder does not contravene section 218(2) or 219(2) by subscribing for, purchasing or selling, or entering into an agreement to subscribe for, purchase or sell, securities that are traded on the stock market or futures market if —| (a) | the licensed person entered into the transaction or agreement concerned on behalf of another person (referred to in this section as the principal) under a specific instruction by the principal to enter into that transaction or agreement which was not solicited by the licensed person; | | (b) | the licensed person has not given any advice to the principal in relation to the transaction or agreement or otherwise sought to procure the principal’s instructions to enter into the transaction or agreement; and | | (c) | the principal is not an associate of the licensed person. |
| (2) Nothing in this section shall affect the application of section 218(2) or 219(2) in relation to the principal. [Malaysia SIA, s. 89M] |
|
| Parity of information defences |
231.—(1) In any proceedings against a person for a contravention of section 218(2) or 219(2) because the person entered into, or procured another person to enter into, a transaction or agreement at a time when certain information was in the first-mentioned person’s possession, it is a defence if the court is satisfied that —| (a) | the information came into the first-mentioned person’s possession solely as a result of the information having been made known as referred to in section 215(b)(i); or | | (b) | the other party to the transaction or agreement knew, or ought reasonably to have known, of the information before entering into the transaction or agreement. |
(2) In an action against a person for a contravention of section 218(3) or 219(3) because the person communicated information, or caused information to be communicated, to another person, it is a defence if the court is satisfied that —| (a) | the information came into the first-mentioned person’s possession solely as a result of the information having been made known as referred in section 215(b)(i); or | | (b) | the other person knew, or ought reasonably to have known, of the information before the information was communicated. |
[Aust. Corporations 2001, s. 1002T] |
|
| Division 4 — Civil Liability |
232.—(1) Whenever it appears to the Authority that any person has contravened any provision in this Part, the Authority may, with the consent of the Public Prosecutor, bring an action in a court against him to seek an order for a civil penalty in respect of that contravention.(2) If the court is satisfied on a balance of probabilities that the person has contravened a provision in this Part which resulted in his gaining a profit or avoiding a loss, the court may make an order against him for the payment of a civil penalty of a sum —| (a) | not exceeding 3 times —| (i) | the amount of the profit that the person gained; or | | (ii) | the amount of the loss that he avoided, |
| as a result of the contravention; or |
| | (b) | equal to $50,000 if the person is not a corporation, or $100,000 if the person is a corporation, |
| whichever is the greater. |
|
| (3) If the court is satisfied on a balance of probabilities that the person has contravened a provision in this Part which did not result in his gaining a profit or avoiding a loss, the court may make an order against him for the payment of a civil penalty of a sum not less than $50,000 and not more than $2 million. |
| (4) Notwithstanding subsections (2) and (3), the court may make an order against a person against whom an action has been brought under this section if the Authority, with the consent of the Public Prosecutor, has agreed to allow the person to consent to the order with or without admission of a contravention of a provision in this Part and the order may be made on such terms as may be agreed between the Authority and the defendant. |
| (5) Nothing in this section shall be construed to prevent the Authority from entering into an agreement with any person to pay, with or without admission of liability, a civil penalty within the limits referred to in subsection (2) or (3) for a contravention of any provision in this Part. |
| (6) A civil penalty imposed under this section shall be payable to the Authority. |
| (7) If the person fails to pay the civil penalty imposed on him within the time specified in the court order referred to in subsection (4) or specified under the agreement referred to in subsection (5), the Authority may recover the civil penalty as though the civil penalty were a judgment debt due to the Authority. [1/2005] |
| (8) Any defence that is available to a person who is prosecuted for a contravention of any provision in this Part, shall also be available to a defendant to an action under this section in respect of that contravention. [SIA, s.104A] |
|
| Action under section 232 not to commence, etc., in certain situations |
233.—(1) An action under section 232 shall not be commenced after the expiration of 6 years from the date of the contravention of any of the provisions in this Part.| (2) An action under section 232 shall not be commenced if the person has been convicted or acquitted in criminal proceedings for the contravention of any of the provisions in this Part, except where he has been acquitted on the ground of the withdrawal of the charge against him. |
(3) An action under section 232 shall be stayed after criminal proceedings have been commenced against the person for the contravention of any of the provisions in this Part, and may thereafter be continued only if —| (a) | that person has been discharged in respect of that contravention and the discharge does not amount to an acquittal; or | | (b) | the charge against him in respect of that contravention has been withdrawn. |
[SIA, s. 104B] |
|
234.—(1) A person who has acted in contravention of any of the provisions in this Part which resulted in his gaining a profit or avoiding a loss (referred to in this section and sections 235 and 236 as the contravening person) shall, whether or not he had been convicted or had a civil penalty imposed on him in respect of that contravention, be liable to pay compensation to any person (referred to in this section and sections 235 and 236 as the claimant) who —| (a) | contemporaneously with the contravention, had subscribed for, purchased or sold securities, or entered into futures contract, or contracts or arrangements in connection with leveraged foreign exchange trading, of the same description; and | | (b) | had suffered loss by reason of the difference between —| (i) | the price at which the securities, futures contracts, or contracts in connection with leveraged foreign exchange trading were dealt in or traded contemporaneously with the contravention; and | | (ii) | the price at which the securities, futures contracts or contracts in connection with leveraged foreign exchange trading would have been likely to have been so dealt in or traded at the time of the contemporaneous dealing or trading if the contravention had not occurred. |
|
| (2) The amount of compensation that the contravening person is liable to pay to the claimant is the amount of the loss suffered by the claimant, up to the maximum recoverable amount. |
| (3) Any defence that is available to a person who is prosecuted for a contravention of any provision in this Part, shall also be available to a defendant to an action under this section in respect of the contravention. |
| (4) An action under this section shall not be commenced after the expiration of 6 years from the date of completion of the contemporaneous dealing or trading in which the loss occurred. |
(5) In determining whether a dealing in securities, trading in futures contracts, or leveraged foreign exchange trading took place contemporaneously with the contravention under subsection (1), the court shall take into account the following matters:| (a) | the volume of securities, futures contracts, or contracts in connection with leveraged foreign exchange trading of the same description dealt in or traded between the date and time of the contravention and the date and time of the dealing in securities, trading in futures contracts, or leveraged foreign exchange trading; | | (b) | the date and time the contravention, if it was effected by a transaction or transactions involving the subscription for securities, purchase or sale of securities, trading in futures contracts or leveraged foreign exchange trading, was cleared and settled; | | (c) | whether the dealing in securities, trading in futures contracts, or leveraged foreign exchange trading took place before or after the contravention; | | (d) | in the case of a contravention under section 203, 218 or 219, whether the dealing in securities took place before or after the information to which the contravention relates became generally known; | | (e) | such other factors and developments, whether in Singapore or elsewhere, as the court may consider relevant. |
|
(6) In this section and section 236, “maximum recoverable amount”, in respect of each contravention by a contravening person means —| (a) | the amount of the profit that the contravening person gained; or | | (b) | the amount of the loss that he avoided, |
| as a result of the contravention, after deducting all amounts of compensation that the contravening person had previously been ordered by a court to pay to other claimants under this section in respect of the same contravention. |
[SIA, s. 104C] |
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| Action under section 234 not to commence, etc., in certain situations |
235.—(1) Except with the leave of court, no action under section 234 may be brought against the contravening person in respect of a contravention of any of the provisions in this Part which resulted in his gaining a profit or avoiding a loss after the commencement of —| (a) | criminal proceedings under this Part against the contravening person for the same contravention; or | | (b) | an action under section 232 against the contravening person for the same contravention. |
(2) Any action under section 234 against the contravening person in respect of a contravention of any of the provisions in this Part which resulted in his gaining a profit or avoiding a loss, being an action that is pending on the date of commencement of —| (a) | criminal proceedings under this Part against the contravening person for the same contravention; or | | (b) | an action under section 232 against the contravening person for the same contravention, |
| shall be stayed, and may not thereafter be continued except with the leave of court. |
|
| (3) Leave under subsection (1) or (2) may not be granted if a date has been fixed by a court under section 236(1) for the filing of claims, and in that event the claimant to the proposed action or the action that has been stayed, as the case may be, shall comply with such directions relating to the filing and proof of his claim under section 236 as that court may issue in his case. [SIA, s. 104D] |
|
| Civil liability in event of conviction, etc. |
236.—(1) Notwithstanding section 234, where the contravening person —| (a) | has been convicted of an offence under this Part; or | | (b) | has an order for the payment of a civil penalty made against him under section 232, other than a consent order made with or without admission of contravention under section 232(4), |
| in respect of the contravention of any of the provisions in this Part which resulted in his gaining a profit or avoiding a loss, the court which convicted him or made the order against him (referred to in this section as the relevant court) may, after the conviction or the order imposing the civil penalty has been made final, fix a date on or before which all claimants have to file and prove their claims for compensation in respect of that contravention. |
| (2) For the purposes of subsection (1), the relevant court shall not fix a date that is earlier than 3 months from the date the conviction or the order imposing the civil penalty, as the case may be, has been made final. |
(3) The relevant court may, after the expiry of the date fixed under subsection (1), make an order against the contravening person to pay to each claimant who has filed and proven his claim for compensation an amount —| (a) | equal to the amount of compensation which that claimant has proven to the satisfaction of the court that he would have been entitled to if he had brought an action under section 234 against the contravening person himself; or | | (b) | equal to the pro-rated portion of the maximum recoverable amount, calculated according to the relationship which the amount referred to in paragraph (a) bears to all amounts proved to the court, |
|
(4) For the purposes of this section, a conviction is made final if —| (a) | the conviction is upheld on appeal, revision or otherwise; | | (b) | the conviction is not subject to further appeal; | | (c) | no notice of appeal against the conviction is lodged within the time prescribed by section 247 of the Criminal Procedure Code (Cap. 68); or | | (d) | any appeal against the conviction is withdrawn. |
|
(5) For the purposes of this section, an order imposing a civil penalty is made final if —| (a) | the order is not set aside on appeal or revision or is varied only as to the amount of the civil penalty to be imposed; | | (b) | the order is not subject to further appeal; | | (c) | no notice of appeal against the imposition of the penalty is lodged within the time prescribed by Rules of Court (Cap. 322, R 5) made under section 238; or | | (d) | any appeal against the imposition of the penalty is withdrawn. |
[SIA, s. 104E] |
|
| Jurisdiction of District Court |
| 237. A District Court shall have jurisdiction to hear and determine any action under section 232, 234 or 236 regardless of the monetary amount. [SIA, s. 104F] |
238.—(1) Rules of Court (Cap. 322, R 5) may be made —| (a) | to regulate and prescribe the procedure and practice to be followed in respect of proceedings under sections 232, 234 and 236; and | | (b) | to provide for costs and fees of such proceedings, and for regulating any matter relating to the costs of such proceedings. |
(2) Without prejudice to the generality of subsection (1), Rules of Court may, in relation to proceedings under section 236 —| (a) | provide for the advertisement of a notice for the filing and proof of claims under that section; | | (b) | prescribe the procedure for the filing, proof and hearing of those claims; and | | (c) | provide for the payment of the costs and fees of an action that has been stayed under section 235(2). |
[SIA, s. 104G] |
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