Commission Powers and Actions Overview

Questions and Answers

What must occur before the Commission can take disciplinary action against a member of a securities exchange?

The Commission must act independently of the exchange.

The Commission must obtain approval from the High Court.

The member and the exchange must be given an opportunity to be heard. (correct)

The member must request an internal review.

Who is eligible to appeal a decision made by the Commission?

The securities exchange itself.

Members of the public interested in the case.

Any member of the securities exchange.

A person aggrieved by the Commission's decision. (correct)

What is the consequence for a securities exchange that refuses to comply with a directive issued by the Commission?

The directors of the exchange will face criminal charges.

The exchange will lose its official listing.

The securities exchange must cease all trading activities.

The securities exchange may have to pay administrative penalties. (correct)

Which of the following is NOT an obligation of a person associated with a body corporate admitted to a securities exchange's official list?

Report operational profits annually. Signup and view all the answers

In what scenario may the Commission issue a directive to a securities exchange?

When it appears to be in the public interest. Signup and view all the answers

What type of order may the court issue to enforce compliance with securities exchange rules?

Directives to perform the duty imposed by the rules. Signup and view all the answers

What is the daily penalty for a securities exchange that continues to refuse compliance with a directive?

One hundred penalty units. Signup and view all the answers

Which of the following best describes the role of the Commission regarding an exchange's operations?

The Commission evaluates compliance and issues directives when necessary. Signup and view all the answers

Under what circumstances may the Commission direct the removal of an executive officer from a securities exchange?

If the executive officer has wilfully contravened provisions or failed to enforce compliance. Signup and view all the answers

What is a possible consequence for a securities exchange that allows trading in contravention of a notice from the Commission?

They may face an administrative penalty of five hundred penalty units. Signup and view all the answers

What is the minimum period for which records must be kept after the completion of the relevant transaction?

Seven years Signup and view all the answers

How long can the Commission prohibit trading in particular securities according to the notice it issues?

For a maximum of fourteen days. Signup and view all the answers

What is the administrative penalty for failing to keep records for the required period?

One thousand penalty units Signup and view all the answers

Under what condition is a copy or extract from a book admissible in evidence?

When it is proved to be a true copy Signup and view all the answers

What must the Commission do concurrently when it gives a notice to a securities exchange to prohibit trading?

Inform the Minister and send a copy of the notice to the body corporate. Signup and view all the answers

Which of the following is NOT a condition under which the Commission may issue a notice to prohibit trading?

To penalize the exchange for past non-compliance. Signup and view all the answers

Which of the following individuals is NOT compelled to produce evidence of privileged communication?

A licensed attorney Signup and view all the answers

What opportunity must be afforded to an executive officer before the Commission takes action against them?

An opportunity of being heard. Signup and view all the answers

What information might the Commission require from a broker-dealer in relation to securities transactions?

The name of the person involved in the acquisition or disposal Signup and view all the answers

Which of the following actions could lead to an executive officer facing censure from the Commission?

Failing to act without reasonable justification in enforcing compliance. Signup and view all the answers

What qualifies as a broker-dealer according to the content?

Any person conducting securities transactions either as an agent or principal Signup and view all the answers

Which method is NOT acceptable for proving that a copy or extract is a true representation of a book?

An oral statement from a colleague Signup and view all the answers

What must be included in the notice issued by the Commission to prohibit trading in particular securities?

Reasons for the Commission's opinion on prohibition. Signup and view all the answers

Which of the following parts of the Act specifically does NOT compel legal practitioners regarding privileged documents?

Section 27 Signup and view all the answers

What action may the Commission take in the event of non-production of required books?

Require the individual to disclose the location of the books. Signup and view all the answers

Which of the following is NOT a right of the person receiving the books under section 25?

Dispose of the books as deemed necessary. Signup and view all the answers

What may result from a search authorized by the Commission?

Seizure or copying of any relevant documents found. Signup and view all the answers

Which statement correctly describes the Commission's authority regarding body corporates?

Action can be taken against individual officers of a body corporate during its dissolution process. Signup and view all the answers

When the Commission retains possession of the books under section 25, for what purpose can it do so?

To inspect and make copies of or extracts from the books. Signup and view all the answers

What must the officer of the body corporate do if they cannot produce the required books?

Provide an explanation for their inability to produce the books. Signup and view all the answers

Under section 26, which of the following actions is authorized during a search conducted by the Commission?

Questioning individuals relevant to the investigation. Signup and view all the answers

What is one potential consequence of a violation discovered by the Commission during a search?

Temporary securing of the premises for further investigation. Signup and view all the answers

What is defined as an approved trading facility under the Act?

Various types of exchanges including commodity and futures exchanges Signup and view all the answers

Which entity is not eligible for approval to operate as a securities exchange?

Individual traders Signup and view all the answers

What is one of the conditions for the approval of a body corporate as a securities exchange?

At least three members must operate independently Signup and view all the answers

Which of the following must a body corporate provide for in its rules to gain approval as a securities exchange?

A clear expulsion process for non-compliant members Signup and view all the answers

What is a requirement regarding the members of the governing body of a securities exchange?

They must include representatives of listed companies and not be associated with a stock broker Signup and view all the answers

Why does the Commission need to be convinced before granting approval to a securities exchange?

To ensure that the public interest is served Signup and view all the answers

What function must the body corporate perform regarding membership applications?

Report to the Commission when rejecting or suspending a member Signup and view all the answers

Which of the following is NOT a provision that must be included in the rules of a body corporate seeking approval as a securities exchange?

Financial reports to be published monthly Signup and view all the answers

Study Notes

Powers and Actions of the Commission

A power to require information extends to officers of a body corporate, even if dissolved or in the process of winding up.
The Commission can publish information obtained through its powers.

Action on Production of Books

Required books can be possessed, copied, or extracted by the Commission.
The Commission can demand explanations from individuals involved in the compilation of the books.
Books can be retained for necessary inspection by the Commission.
Access to the books must be allowed upon reasonable notice and specification.

Non-Production of Books

If books aren’t produced, the Commission may require an explanation for absence, including their whereabouts and previous custody.

Searches by the Commission

Authorized personnel can search premises suspected of non-compliance with the law.
The Commission can seize or copy relevant documents during searches.
Personnel can interrogate associated individuals present at the business location.
Business operations may be halted if necessary, and the Police may assist in these activities.

Enforcement of Securities Exchange Rules

Failure to comply with securities exchange rules can lead to court-ordered directives for compliance.
Bodies corporate and associated individuals are obligated to adhere to the rules of their respective exchanges.

Directives to Securities Exchanges

The Commission can issue directives to exchanges regarding operational procedures in the public interest.
Non-compliance by an exchange may result in administrative penalties.
Executive officers of an exchange may be directed for removal or censure based on non-compliance or misconduct.

Prohibition of Trading in Specific Securities

The Commission can prohibit trading in specific securities to protect public interest.
The exchange must act upon receiving notice of this prohibition, failing which trading can be stopped by the Commission.

Record Keeping Obligations

Books and records must be maintained for a minimum of seven years post-transaction completion.
Violations can incur substantial penalties.

Admission of Evidence

Copies of required books are admissible as evidence if proven to be true copies.

Legal Privilege

Legal practitioners are not compelled to produce documents containing privileged communications but must disclose their origin and ownership upon request.

Disclosure of Securities Transactions

Broker-dealers must disclose details surrounding acquisitions or disposals of securities when requested by the Commission, safeguarding investor interests.

Definition of Securities Exchanges

Securities exchanges refer to facilities for trading various financial instruments, including stocks and derivatives.

Approval of Securities Exchanges

Only corporate bodies may apply for approval to operate as securities exchanges.
An approving body must ensure requirements, such as good character and integrity of members, are met.
The approval process includes establishing fair operational rules and public interest considerations.

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Description

This quiz explores the powers and actions of the Commission, covering information requisition from corporate officers, production and inspection of books, and the processes involved in searches. Test your knowledge on how the Commission operates and its authority in various scenarios.