PART III | Accounts to be kept by brokers |
10.—(1) Every commodity broker, commodity futures broker and spot commodity broker shall —| (a) | keep such accounting and other records as will sufficiently explain the transactions and reflect the financial position of the business of trading in commodity contracts, commodity futures contracts or spot commodity contracts carried on by him and as will enable true and fair profit and loss accounts and balance-sheets to be prepared from time to time; and | | (b) | keep such records in a manner as will enable them to be conveniently and properly audited. |
(2) Without prejudice to the generality of paragraph (1), every commodity broker, commodity futures broker and spot commodity broker shall keep records —| (a) | in sufficient detail to show particulars of —| (i) | all amounts received and paid by him, including, where applicable, amounts paid to and disbursed from a segregated trust account kept under regulation 21; and | | (ii) | all purchases and sales of contracts made by him, and the charges and credits arising therefrom; and |
| | (b) | in sufficient detail to show separately, particulars of all transactions by him with, or for the account of —| (i) | his customer; and | | (ii) | himself. |
|
|
(3) Every commodity broker, commodity futures broker and spot commodity broker shall retain for a period of not less than 6 years —| (a) | the records kept in accordance with this regulation; | | (b) | a copy of each contract made out by him as agent of every customer; and | | (c) | a copy of each contract received by him or made out to himself as principal. |
|
| (4) Records required to be kept by a commodity broker, commodity futures broker or spot commodity broker under this regulation shall be kept by making entries in a bound book, or by recording or storing the relevant matters in such electronic form as may be appropriate, or in any other manner as may be approved by the Board, and anything so entered, recorded or stored shall be deemed to have been effected by, or with the authority of, the broker. |
(5) Every commodity broker, commodity futures broker and spot commodity broker shall take —| (a) | reasonable precautions in guarding against falsification of any of the records referred to in this regulation, or damage or loss to any of the records; and | | (b) | reasonable steps for facilitating the discovery of any such falsification, damage or loss. |
|
| (6) A commodity broker, commodity futures broker or spot commodity broker who, without reasonable excuse, contravenes this regulation shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months or to both. |
|
11.—(1) Every commodity broker, commodity futures broker and spot commodity broker shall appoint an auditor to audit his accounts (including all segregated trust accounts required to be kept by the broker under regulation 21).| (2) Where for any reason the auditor ceases to act for the commodity broker, commodity futures broker or spot commodity broker, the broker shall, as soon as practicable thereafter, appoint another auditor to replace him. |
|
| Lodging annual accounts, etc. |
12.—(1) Every commodity broker, commodity futures broker and spot commodity broker shall in respect of each financial year —| (a) | prepare a true and fair profit and loss account and a balance-sheet made up to the last day of the financial year; and | | (b) | lodge the profit and loss account and balance-sheet with the Board within 3 months (or such extension as may be permitted by the Board under paragraph (2)) after the end of the financial year, together with an auditor’s report on the profit and loss account and balance-sheet. |
| (2) Where an application for the extension of the period specified in paragraph (1) is made by a broker to the Board, and the Board is satisfied that there are special reasons to allow the extension, the Board may extend that period by 3 months or such other period as the Board may think fit subject to such conditions as the Board thinks fit to impose. |
| (3) Any commodity broker, commodity futures broker or spot commodity broker who fails to comply with paragraph (1), or with any condition imposed under paragraph (2), shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000. |
|
| Reports by auditor to Board |
13. If, during the performance of his duties as auditor for a commodity broker, commodity futures broker or spot commodity broker, an auditor —| (a) | becomes aware of any matter which in his opinion adversely affects or may adversely affect the financial position of the broker to a material extent; or | | (b) | discovers evidence of a contravention by the broker of regulation 10, 21 or 22, |
| he shall, as soon as practicable, send to the Board a report in writing of the matter or the evidence of such contravention. |
|
| Profit and loss account and balance-sheet |
14.—(1) Every commodity trading adviser or commodity futures trading adviser, who is not a body corporate, shall prepare accounts in relation to his business as a trading adviser in the form determined by the Board in respect of each financial year.| (2) The assets and liabilities of the business of a commodity trading adviser or commodity futures trading adviser shall be brought into account in the balance-sheet at such amounts to be classified and described so that the balance-sheet gives a true and fair view of the state of affairs of the business as at the date to which it is made up. |
| (3) Each account prepared under paragraph (1) shall be signed by the commodity trading adviser or commodity futures trading adviser. |
| (4) A commodity broker, commodity futures broker, spot commodity broker, commodity trading adviser, commodity futures trading adviser, commodity pool operator or commodity futures pool operator, that is a corporation, shall prepare accounts in accordance with the provisions of the Companies Act (Cap. 50) in respect of each financial year and shall attach to such accounts a statement in the form required by the Board. |
| (5) The statement referred to in paragraph (4) shall be signed by a director or the secretary of the corporation appointed for that purpose. |
|
| 15. The auditor’s report required to be lodged under regulation 12(1) shall be in such form as the Board may determine and shall be accompanied by the documents necessary for due understanding of the report. |
| Control of take-overs of licensees, etc. |
16.—(1) No person shall enter into an agreement to acquire the shares of a person approved under section 5(2) of the Act as a commodity market or Commodity Futures Exchange, or a holder of a licence granted under section 14 of the Act, who is a body corporate, by virtue of which such first-mentioned person would, if the agreement is carried out, obtain effective control of the second-mentioned person or licensee, unless he has notified the Board of his intention to enter into the agreement and has obtained the approval of the Board in writing.(2) For the purposes of this regulation —| (a) | a person shall be regarded as entering into an agreement by virtue of which he would obtain effective control of a body corporate if the person alone, or acting together with any connected person, would be in a position to control not less than 20% of the voting power in the body corporate concerned or would hold interests in not less than 20% of the issued shares of the body corporate concerned; and | | (b) | a reference to the voting power in a body corporate is a reference to the total number of votes that might be cast in the general meeting of the body corporate. |
|
|
|