Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document

 Download WordDownload Word 


Bill home page
Table Of Contents
Previous Fragment    Next Fragment
Corporations Bill 2001

Part 7.11 Conduct in relation to securities

Division 2 Prohibited conduct

995   Misleading or deceptive conduct

             (2)  A person must not, in or in connection with:

                     (a)  any dealing in securities; or

                     (b)  without limiting the generality of paragraph (a):

                              (i)  the allotment or issue of securities; or

                             (ii)  a notice published in relation to securities; or

                            (iii)  the making of, or the making of an evaluation of, or of a recommendation in relation to, offers under a takeover bid; or

                            (iv)  the carrying on of any negotiations, the making of any arrangements or the doing of any other act preparatory to or in any other way related to any matter referred to in subparagraph (i), (ii) or (iii);

engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

          (2A)  Conduct that contravenes:

                     (a)  section 670A (misleading or deceptive takeover document); or

                     (b)  section 728 (misleading or deceptive fundraising document);

does not contravene subsection (2). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.

             (3)  A person who contravenes this section is not guilty of an offence.

             (4)  Nothing in the following provisions of this Part or in the provisions of Chapter 6D is taken as limiting by implication the generality of subsection (2).

995A   Application of State Fair Trading Acts provisions

                   This Division operates in relation to dealings in securities in this jurisdiction to the exclusion of the provisions of the State Fair Trading Act of any State or Territory.

997   Stock market manipulation

             (1)  A person must not enter into or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of increasing the price of securities of the body corporate on a stock market, with intention to induce other persons to buy or subscribe for securities of the body corporate or of a related body corporate.

             (4)  A person must not enter into, or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of reducing the price of securities of the body corporate on a stock market, with intent to induce other persons to sell securities of the body corporate or of a related body corporate.

             (7)  A person must not enter into, or carry out, either directly or indirectly, 2 or more transactions in securities of a body corporate, being transactions that have, or are likely to have, the effect of maintaining or stabilising the price of securities of the body corporate on a stock market, with intent to induce other persons to sell, buy or subscribe for securities of the body corporate or of a related body corporate.

           (10)  A reference in this section to a transaction, in relation to securities, includes:

                     (a)  a reference to the making of an offer to sell or buy securities; and

                     (b)  a reference to the making of an invitation, however expressed, that expressly or impliedly invites a person to offer to sell or buy securities.

998   False trading and market rigging transactions

             (1)  A person must not create, or do anything that is intended or likely to create, a false or misleading appearance of active trading in any securities on a stock market or a false or misleading appearance with respect to the market for, or the price of, any securities.

             (3)  A person must not, by means of purchases or sales of any securities that do not involve a change in the beneficial ownership of those securities or by any fictitious transactions or devices, maintain, increase, reduce, or cause fluctuations in, the market price of any securities.

             (5)  Without limiting the generality of subsection (1), a person who:

                     (a)  enters into, or carries out, either directly or indirectly, any transaction of sale or purchase of any securities, being a transaction that does not involve any change in the beneficial ownership of the securities; or

                     (b)  offers to sell any securities at a specified price where the person has made or proposes to make, or knows that an associate of the person has made or proposes to make, an offer to buy 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)  offers to buy any securities at a specified price where the person has made or proposes to make, or knows that an associate of the person has made or proposes to make, 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;

is taken to have created a false or misleading appearance of active trading in those securities on a stock market.

             (6)  In a prosecution of a person for a contravention of subsection (1) constituted by an act referred to in subsection (5), it is a defence if it is proved that the purpose or purposes for which the person 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 stock market.

             (7)  A purchase or sale of securities does not involve a change in the beneficial ownership for the purposes of this section if a person who had an interest in the securities before the purchase or sale, or an associate of the person in relation to those securities, has an interest in the securities after the purchase or sale.

             (8)  In a prosecution for a contravention of subsection (3) 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 it is proved that the purpose or purposes for which the securities were bought or sold 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.

             (9)  The reference in paragraph (5)(a) to a transaction of sale or purchase of securities includes:

                     (a)  a reference to the making of an offer to sell or buy securities; and

                     (b)  a reference to the making of an invitation, however expressed, that expressly or impliedly invites a person to offer to sell or buy securities.

999   False or misleading statements in relation to securities

                   A person must not make a statement, or disseminate information, that is false in a material particular or materially misleading and:

                    (aa)  is likely to induce other persons to subscribe for securities; or

                     (a)  is likely to induce the sale or purchase of securities by other persons; or

                     (b)  is likely to have the effect of increasing, reducing, maintaining or stabilising the market price of securities;

if, when the person makes the statement or disseminates the information:

                     (c)  the person does not care whether the statement or information is true or false; or

                     (d)  the person knows or ought reasonably to have known that the statement or information is false in a material particular or materially misleading.

1000   Fraudulently inducing persons to deal in securities

             (1)  A person must not:

                     (a)  by making or publishing a statement, promise or forecast that the person knows to be misleading, false or deceptive; or

                     (b)  by a dishonest concealment of material facts; or

                     (c)  by the reckless making or publishing (dishonestly or otherwise) of a 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 the person knows to be false in a material particular or materially misleading;

induce or attempt to induce another person to deal in securities.

             (3)  It is a defence to a prosecution for a contravention of subsection (1) constituted by recording or storing information as mentioned in paragraph (1)(d) if it is proved that, when the information was so recorded or stored, the defendant had no reasonable grounds for expecting that the information would be available to any other person.

1001   Dissemination of information about illegal transactions

                   A person must not circulate or disseminate any statement or information to the effect that the price of any securities of a body corporate will or is likely to rise or fall or be maintained because of any transaction entered into or other act or thing done in relation to securities of that body corporate or of a body corporate that is related to that body corporate, in contravention of section 997, 998, 999 or 1000 if:

                     (a)  the person, or an associate of the person, has entered into any such transaction or done any such act or thing; or

                     (b)  the person, or an associate of the person, has received, or expects to receive, directly or indirectly, any consideration or benefit in respect of the circulation or dissemination of the statement or information.

1001A   Continuous disclosure—listed disclosing entities

             (1)  This section applies to a listed disclosing entity if provisions of the listing rules of a securities exchange:

                     (a)  apply to the entity; and

                     (b)  require the entity to notify the securities exchange of information about specified events or matters as they arise for the purpose of the securities exchange making that information available to a stock market conducted by the securities exchange.

             (2)  The disclosing entity must not contravene those provisions by intentionally, recklessly or negligently failing to notify the securities exchange of information:

                     (a)  that is not generally available; and

                     (b)  that a reasonable person would expect, if it were generally available, to have a material effect on the price or value of ED securities of the entity.

             (3)  A contravention of subsection (2) is only an offence if the failure concerned is intentional or reckless.

             (4)  For the purposes of the application of this section to a listed disclosing entity that is an undertaking to which interests in a registered scheme relate, the obligation of the entity not to contravene provisions as mentioned in subsection (2) is an obligation of the responsible entity.

1001B   Continuous disclosure—unlisted disclosing entities

             (1)  If:

                     (a)  an unlisted disclosing entity becomes aware of information:

                              (i)  that is not generally available; and

                             (ii)  that a reasonable person would expect, if it were generally available, to have a material effect on the price or value of ED securities of the entity; and

                     (b)  the information is not required to be included in a supplementary disclosure document or a replacement disclosure document in relation to the entity;

the entity must, as soon as practicable, lodge a document containing the information.

             (2)  An unlisted disclosing entity does not contravene subsection (1) except by an intentional, reckless or negligent act or omission.

             (3)  A contravention of subsection (1) is only an offence if the failure concerned is intentional or reckless.

             (4)  For the purposes of the application of this section to an unlisted disclosing entity that is an undertaking to which interests in a registered scheme relate:

                     (a)  the entity is aware of information if, and only if, the responsible entity is aware of the information; and

                     (b)  the obligation of the entity to lodge a document under subsection (1) is an obligation of the responsible entity; and

                     (c)  subsection (2) applies as if the reference in it to an unlisted disclosing entity were instead a reference to the responsible entity.

1001C   Sections 1001A and 1001B—when information is generally available

             (1)  This section has effect for the purposes of sections 1001A and 1001B.

             (2)  Information is generally available if:

                     (a)  it consists of readily observable matter; or

                     (b)  without limiting the generality of paragraph (a), both the following subparagraphs apply:

                              (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.

             (3)  Information is also generally available if it consists of deductions, conclusions or inferences made or drawn from either or both of the following:

                     (a)  information referred to in paragraph (2)(a);

                     (b)  information made known as mentioned in subparagraph (2)(b)(i).

1001D   Sections 1001A and 1001B—material effect on price or value

                   For the purposes of sections 1001A and 1001B, 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, or buy or sell, the first-mentioned securities.



 

Division 2A Insider trading

1002   Application of Division

                   This Division applies to:

                     (a)  acts and omissions in this jurisdiction in relation to securities of any body corporate, whether formed or carrying on business in this jurisdiction or in Australia or not; and

                     (b)  acts and omissions outside this jurisdiction, whether in Australia or not, in relation to securities of a body corporate that is formed or carries on business in this jurisdiction.

1002A   Securities

             (1)  In this Division and in section 1013:

information includes:

                     (a)  matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; and

                     (b)  matters relating to the intentions, or the likely intentions, of a person.

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, acquire the option or right under the contract, or take an assignment of the option or right, whether or not on another’s behalf.

securities , in relation to a body corporate, means any of the following:

                     (a)  shares in the body corporate;

                     (b)  debentures (including convertible notes) issued by the body corporate;

                     (c)  interests in a managed investment scheme made available by the body corporate;

                     (d)  units of shares referred to in paragraph (a);

                     (e)  an option contract under which a party acquires from another party an option or right, exercisable at or before a specified time, to buy from, or sell to, that other party a number of securities of a kind referred to in paragraph (a), (b), (c) or (d) at a price specified in, or to be determined in accordance with, the contract;

but does not include a futures contract or an excluded security.

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.

             (2)  A provision of this Division or of section 1013 that applies in relation to securities of a body corporate:

                     (a)  also applies in relation to securities (as defined by subsection 92(1)) issued by a government, an unincorporated body or any other person; and

                     (b)  applies, in relation to securities so issued, in the same way, as nearly as practicable, as if the government, body or person were a body corporate.

1002B   Information generally available

             (1)  This section has effect for the purposes of this Division and section 1013.

             (2)  Information is generally available if:

                     (a)  it consists of readily observable matter; or

                     (b)  without limiting the generality of paragraph (a), both the following subparagraphs apply:

                              (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 bodies corporate 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.

             (3)  Information is also generally available if it consists of deductions, conclusions or inferences made or drawn from either or both of the following:

                     (a)  information referred to in paragraph (2)(a);

                     (b)  information made known as mentioned in subparagraph (2)(b)(i).

1002C   Material effect on price or value of securities

                   For the purposes of this Division and section 1013, a reasonable person would be taken to expect information to have a material effect on the price or value of securities of a body corporate 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.

1002D   Trading, and procuring trading, in securities

             (1)  Trading in securities of a body corporate that is ordinarily permitted on the stock market of a securities exchange is taken for the purposes of this Division to be permitted on that stock market even though trading in any such securities on that stock market is suspended by action taken by that securities exchange or is prohibited by a notice given to that securities exchange by ASIC under subsection 775(2).

             (2)  For the purposes of this Division and section 1013 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.

1002E   Information in possession of officer of body corporate

                   For the purposes of this Division and section 1013:

                     (a)  a body corporate is taken to possess any information which an officer of the body corporate possesses and which came into his or her possession in the course of the performance of duties as such an officer; and

                     (b)  if an officer of a body corporate knows or ought reasonably to know any matter or thing because he or she is an officer of the body corporate, it is to be presumed that the body corporate knows or ought reasonably to know that matter or thing.

1002F   Information in possession of partner or employee of partnership

                   For the purposes of this Division and section 1013:

                     (a)  a member of a partnership is taken to possess any information:

                              (i)  which another member of the partnership possesses and which came into the other member’s possession in the other member’s capacity as a member of the partnership; or

                             (ii)  which an employee of the partnership possesses and which came into his or her possession in the course of the performance of duties as such an employee; and

                     (b)  if a member or employee of a partnership knows or ought reasonably to know any matter or thing because the member or employee is such a member or employee, it is to be presumed that every member of the partnership knows or ought reasonably to know that matter or thing.

1002G   Prohibited conduct by person in possession of inside information

             (1)  Subject to this Division, where:

                     (a)  a person (in this section called 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 of a body corporate; and

                     (b)  the 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;

the following subsections 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 stock market of a securities 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.

1002H   Exception for withdrawal from registered scheme

                   Subsection 1002G(2) does not apply in respect of a member’s withdrawal from a registered scheme if the amount paid to the member on withdrawal is calculated (so far as is reasonably practicable) by reference to the underlying value of the assets of the financial or business undertaking or scheme, common enterprise, investment contract or time-sharing scheme to which the member’s interest relates, less any reasonable charge for buying the member’s interest.

1002J   Exception for underwriters

             (1)  Subsection 1002G(2) does not apply in respect of:

                     (a)  subscribing for securities under an underwriting agreement or a sub-underwriting agreement; or

                     (b)  entering into an agreement referred to in paragraph (a); or

                     (c)  selling securities subscribed for under an agreement referred to in paragraph (a).

             (2)  Subsection 1002G(3) does not apply in respect of:

                     (a)  the communication of information in relation to securities 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)  the communication of information in relation to securities by a person who may be required under an underwriting agreement to subscribe for 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 any such securities.

1002K   Exception for purchase pursuant to legal requirement

                   Subsection 1002G(2) does not apply in respect of the purchase of securities pursuant to a requirement imposed by this Act.

1002L   Exception for information communicated pursuant to a legal requirement

                   Subsection 1002G(3) does not apply in respect of the communication of information pursuant to a requirement imposed by the Commonwealth, a State, a Territory or any regulatory authority.

1002M   Chinese wall arrangements by bodies corporate

                   A body corporate does not contravene subsection 1002G(2) by entering into a transaction or agreement at any time merely because of information in the possession of an officer of the body corporate if:

                     (a)  the decision to enter into the transaction or agreement was taken on its behalf by a person or persons other than that officer; and

                     (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 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.

1002N   Chinese wall arrangements by partnerships etc.

             (1)  The members of a partnership do not contravene subsection 1002G(2) by entering into a transaction or agreement at any time merely because one or more (but not all) of the members, or an employee or employees of the partnership, are in actual possession of information if:

                     (a)  the decision to enter into the transaction or agreement was taken on behalf of the partnership by any one or more of the following persons:

                              (i)  a member or members who are taken to have possessed the information merely because another member or other members, or an employee or employees of the partnership, were in possession of the information;

                             (ii)  an employee or employees of the partnership who was not or were not in possession of the information; and

                     (b)  the 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.

             (2)  A member of a partnership does not contravene subsection 1002G(2) by entering into a transaction or agreement otherwise than on behalf of the partnership merely because the member is taken to possess information that is in the possession of another member or an employee of the partnership.

1002P   Exception for knowledge of person’s own intentions or activities

                   A natural person does not contravene subsection 1002G(2) by entering into a transaction or agreement in relation to securities of a body corporate merely because the person is aware that he or she proposes to enter into, or has previously entered into, one or more transactions or agreements in relation to securities of that body corporate.

1002Q   Exception for bodies corporate

             (1)  A body corporate does not contravene subsection 1002G(2) by entering into a transaction or agreement in relation to securities of another body corporate merely because the first-mentioned body corporate is aware that it proposes to enter into or has previously entered into, one or more transactions or agreements in relation to securities of the other body corporate.

             (2)  Subject to subsection (3), a body corporate does not contravene subsection 1002G(2) by entering into a transaction or agreement in relation to securities of another body corporate merely because an officer of the first-mentioned body corporate is aware that the first-mentioned body corporate proposes to enter into, or has previously entered into, one or more transactions or agreements in relation to securities of the other body corporate.

             (3)  Subsection (2) does not apply unless the officer of the body corporate first-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.

1002R   Exception for officers or agents of body corporate

             (1)  Subject to subsection (2), a person does not contravene subsection 1002G(2) by entering into a transaction or agreement on behalf of a body corporate in relation to securities of another body corporate merely because the person is aware that the first-mentioned body corporate proposes to enter into, or has previously entered into, one or more transactions or agreements in relation to securities of the other body corporate.

             (2)  Subsection (1) does 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 first-mentioned body corporate or in the course of acting as an agent of the first-mentioned body corporate.

1002S   Transactions by holder of dealers licence or a representative of the holder of such a licence

                   A person (in this section called the agent ) does not contravene subsection 1002G(2) by subscribing for, purchasing or selling, or entering into an agreement to subscribe for, purchase or sell, securities of a body corporate that are permitted by a securities exchange to be traded on the stock market of that securities exchange if:

                     (a)  the agent is the holder of a dealers licence or a representative of the holder of such a licence; and

                     (b)  the agent entered into the transaction or agreement concerned on behalf of another person (in this section called the principal ) under a specific instruction by the principal to enter into that transaction or agreement; and

                     (c)  the holder of the dealers licence had in operation at the time when that transaction or agreement was entered into arrangements that could reasonably be expected to ensure that any information in the possession of the holder or of any representative of the holder as a result of which the person in possession of the information would be prohibited by subsection 1002G(2) from entering into that transaction or agreement was not communicated to the agent and that no advice with respect to the transaction or agreement was given to the principal or to the agent by a person in possession of the information; and

                     (d)  the information was not so communicated and no such advice was so given; and

                     (e)  the principal is not an associate of the holder or of any representative of the holder;

but nothing in this section affects the application of subsection 1002G(2) in relation to the principal.

1002T   Prosecutions and defences

             (1)  In a prosecution of a person for an act or omission that is alleged to constitute a contravention of subsection 1002G(2) or (3), it is not necessary for the prosecution to prove the non-existence of facts or circumstances which, if they existed, would, by virtue of section 1002H, 1002J, 1002K, 1002L, 1002M, 1002N, 1002P, 1002Q, 1002R or 1002S, preclude the act or omission from constituting a contravention of subsection 1002G(2) or (3), as the case may be, but it is a defence if the Court is satisfied that the facts or circumstances existed.

             (2)  In a prosecution brought against a person for an offence against subsection 1002G(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:

                     (a)  it is a defence if the Court is satisfied that the information came into the first-mentioned person’s possession solely as a result of the information having been made known as mentioned in subparagraph 1002B(2)(b)(i); and

                     (b)  it is a defence if the Court is satisfied that 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.

             (3)  In a prosecution against a person for an offence against subsection 1002G(3) because the person communicated information, or caused information to be communicated, to another person:

                     (a)  it is a defence if the Court is satisfied that the information came into the first-mentioned person’s possession solely as a result of the information having been made known as mentioned in subparagraph 1002B(2)(b)(i); and

                     (b)  it is a defence if the Court is satisfied that the other person knew, or ought reasonably to have known, of the information before the information was communicated.

1002U   Powers of court

                   Where, in a proceeding instituted under this Act, the Court finds that a contravention of section 1002G has occurred, the Court may, in addition to any other orders that it may make under any other provision of this Act, make such order or orders as it thinks just, including, but without limiting the generality of the above, any one or more of the following orders:

                     (a)  an order restraining the exercise of any voting or other rights attached to shares;

                     (b)  an order restraining the exercise of any rights attached to securities other than shares;

                     (c)  an order restraining the issue or allotment of shares;

                     (d)  an order restraining the issue of securities other than shares;

                     (e)  an order restraining the acquisition or disposal of securities;

                      (f)  an order directing the disposal of securities;

                     (g)  an order vesting securities in ASIC;

                     (h)  an order cancelling an agreement for the acquisition or disposal of securities;

                      (j)  an order cancelling a securities licence;

                     (k)  for the purpose of securing compliance with any other order made under this section, an order directing a person to do or refrain from doing a specified act.



 

Division 4 Civil liability

Subdivision A General

1005   Civil liability for contravention of this Part

             (1)  Subject to the following sections of this Division, a person who suffers loss or damage by conduct of another person that was engaged in contravention of a provision of this Part may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention.

             (2)  An action under subsection (1) or under subsection 1013(5) may be begun at any time within 6 years after the day on which the cause of action arose.

             (3)  This Division does not affect any liability that a person has under any other law.

             (4)  In a proceeding under this Part in relation to a contravention of this Part committed by the publication of an advertisement, it is a defence if it is proved that the defendant is a person whose business it is to publish or arrange for the publication of advertisements and that the person received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to a contravention of a provision of this Part.

Subdivision C Liability in respect of unlawful market activity

1013   Liability for insider trading

             (1)  Where:

                     (a)  a person (in this section called 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 of a body corporate (other than an option contract); and

                     (b)  the person knows, or ought reasonably to know, that:

                              (i)  the information is not generally available; and

                             (ii)  if the information were generally available, it might have a material effect on the price or value of those securities; and

                     (c)  the insider (whether as principal or agent) in contravention of subsection 1002G(2):

                              (i)  subscribes for, purchases or sells, or enters into an agreement to subscribe for, purchase or sell, any such securities; or

                             (ii)  procures another person to subscribe for, purchase or sell, or to enter into an agreement to subscribe for, purchase or sell, any such securities;

the following subsections apply.

             (2)  Where the insider subscribed for or agreed to subscribe for, or procured another person to subscribe for or to agree to subscribe for, the securities, the body corporate that issued the securities may, by action under section 1005 against the insider, the other person or any other person involved in the contravention, recover, as a loss suffered by the body corporate, the amount (if any) by which the price at which the securities were subscribed for, or agreed to be subscribed for, by the insider or the other person was less than the price at which they would have been likely to have been sold in a sale made at the time of the subscription or the time of the agreement, as the case may be, if the information had been generally available.

             (3)  Where the insider purchased or agreed to purchase, or procured another person to purchase or to agree to purchase, the securities from a person (in this subsection and subsection (5) called the seller ) who did not possess the information, the seller may, by action under section 1005 against the insider, the other person or any other person involved in the contravention, recover, as a loss suffered by the seller, the amount (if any) by which the price at which the securities were purchased, or agreed to be purchased, by the insider or the other person from the seller was less than the price at which they would have been likely to have been purchased in a purchase made at the time of the first-mentioned purchase or the time of the agreement, as the case may be, if the information had been generally available.

             (4)  Where the insider sold or agreed to sell, or procured another person to sell or to agree to sell, the securities to a person (in this subsection and subsection (5) called the buyer ) who did not possess the information, the buyer may, by action under section 1005 against the insider, the other person or any other person involved in the contravention, recover, as a loss suffered by the buyer, the amount (if any) by which the price at which the securities were sold, or agreed to be sold, by the insider or the other person to the buyer was greater than the price at which they would have been likely to have been sold at the time of the first-mentioned sale or the time of the agreement, as the case may be, if the information had been generally available.

             (5)  In addition to any action that may be brought by a person as provided by subsection (3) or (4), the body corporate may, in the case of a purchase or sale of, or an agreement to purchase or sell, securities by the insider or another person in the circumstances mentioned in that subsection, by action under section 1005 against the insider, the other person or any other person involved in the contravention, recover:

                     (a)  in the case of a purchase or agreement to purchase securities—the amount (if any) by which the price at which the securities were purchased, or agreed to be purchased, by the insider or other person from the seller was less than the price at which they were likely to have been purchased in a purchase made at the time of the first-mentioned purchase or the time of the agreement, as the case may be, if the information had been generally available; or

                     (b)  in the case of a sale or an agreement to sell securities—the amount (if any) by which the price at which the securities were sold, or agreed to be sold, by the insider or other person to the buyer was greater than the price at which they would have been likely to have been sold at the time of the first-mentioned sale or the time of the agreement, as the case may be, if the information had been generally available.

             (6)  ASIC may, if it considers that it is in the public interest to do so, bring an action in accordance with subsection (2) or (5) in the name of, and for the benefit of, a body corporate for the recovery of an amount that the body is entitled to recover by virtue of that subsection.

             (7)  In an action brought against a person in accordance with this section 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 the information came into the first-mentioned person’s possession solely as a result of the information having been made known as mentioned in subparagraph 1002B(2)(b)(i).

             (8)  If:

                     (a)  the responsible entity for a registered scheme; or

                     (b)  ASIC in the name of, and for the benefit of, the responsible entity for a registered scheme;

brings an action in accordance with subsection (2) in respect of a subscription for, or any agreement to subscribe for, any interests in the scheme, any amount recovered in the action:

                     (c)  is to be held by the responsible entity on behalf of the persons who, at the time of the subscription or agreement, had rights or interests in the relevant financial or business undertaking or scheme, common enterprise, investment contract or time-sharing scheme; and

                     (d)  is to be held on their behalf in the respective proportions that, at that time, their individual rights or interests bore to the total of all those rights or interests.

          (8A)  If:

                     (a)  the responsible entity for a registered scheme; or

                     (b)  ASIC in the name of, and for the benefit of, the responsible entity for a registered scheme;

brings an action in accordance with subsection (5) in respect of a purchase or sale of, or an agreement to purchase or sell, interests in the scheme, any amount recovered in the action:

                     (c)  is to be held by the responsible entity on behalf of the persons who, at the time of the sale, purchase or agreement, had rights or interests in the relevant financial or business undertaking or scheme, common enterprise, investment contract or time-sharing scheme; and

                     (d)  is to be held on their behalf in the respective proportions that, at that time, their individual rights or interests bore to the total of all those rights or interests.

             (9)  Any right of action that a person has by virtue of this section is in addition to any right that any other person has under section 1005.

1014   Liability for other unlawful market activity

                   Where a person contravenes section 997, 998, 999, 1000 or 1001, then, without limiting the generality of section 1005, any other person who entered into a transaction for the sale or purchase of securities with the first-mentioned person or with a person acting on behalf of the first-mentioned person may, by action under section 1005 against the first-mentioned person or against any person involved in the contravention, recover the amount of any loss suffered by the person bringing the action because of the difference between the price at which the securities were dealt in that transaction and the price at which they would have been likely to have been dealt in such a transaction when the first-mentioned transaction took place if the contravention had not occurred.

1015   Amount recoverable

             (1)  The amount that a person may recover by action against another person in the circumstances mentioned in section 1013 or 1014 is:

                     (a)  if the second-mentioned person has been found by a court to be liable, or has been ordered by a court, to pay an amount or amounts to any other person or persons under this Part or under Part 9.4B because of the same act or transaction—the amount of the loss suffered by the first-mentioned person or the amount of the profit referred to in paragraph 1013(1)(d), as the case may be, less the amount or the sum of the amounts that the second-mentioned person has been so found to be liable, or has been so ordered, to pay; or

                     (b)  otherwise—the amount of that loss or profit.

             (2)  For the purposes of subsection (1), the onus of proving that the liability of a person to pay an amount to another person arose from the same act or transaction from which another liability arose lies on the person liable to pay the amount.