Section 1
This Act may be cited as the Commodities Trading Act 1985 and shall come into force on such date as the Minister may, by notification in the Gazette, appoint.
/akn/my/act/act/1985/324
COMMODITIES TRADING ACT 1985
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About this act
COMMODITIES TRADING ACT 1985 is Malaysia Act, cited as Act 324 1985, currently marked repealed and first recorded in 1985.
Opening note
Preamble
- An Act to establish the Commodities Trading Commission, to provide for the establishment of a commodity exchange, to control the trading in commodity futures contracts and to provide for matters connected therewith and incidental thereto. ] Pu (B) 8G/8t BE IT ENACTED by the Duli Yang Maha Mulia Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows:
Part I
PART I PRELIMINARY
Section 2
(b)
any society registered under any written law relating to co-operative societies; or
(c)
any trade union registered under any written law as a trade union;
"dealer" means a person who acts as a dealer within the meaning of section 33 and who is registered as such under this Act;
"dealer's representative" means a person who acts as a dealer's representative within the meaning of section 35 and who is registered as such under this Act;
"default", in relation to the failure of a dealer or a member to perform a legal obligation, means a default arising from any breach of trust, defalcation, fraud or misfeasance committed by the dealer, the dealer's ioner of Com ection 9 and provided and or the trading commodities wise;
person who the meaning ch under this ative" means ling adviser's ction 36 and compensation
7, means the ion of the formed or or outside ny but does written law any written aler within red as such who acts leaning of under this ealer or a default fraud or dealer's
COMMODITIES TRADING representative or a member or by any director, partner or employee, as the case may be, of the dealer or member in respect of any money, futures contract or other property of a person who is a client of the dealer or member;
"director" includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director;
"exchange company" means any company approved by the Minister under section 19 to establish and operate a commodity exchange;
"financial year", in relation to any corporation, means the period in respect of which any profit and loss account of the corporation laid before it in general meeting is made up, whether that period is a year or not;
"firm" means an unincorporate body of two or more persons;
"Fund" means the Commodities Trading Commission Fund established under section 13;
"futures contract" means a contract or an option on a contract executed on any commodity exchange to buy or sell a commodity for future delivery;
"legal obligation" includes an obligation arising under a contract, quasi-contract or trust (including a constructive trust);
"licensed bank" means a bank licensed under the Banking Act 1973;
"Management Board" means the management board of the exchange company;
"Minister" means the Minister for the time being responsible for commodities futures trading;
"registered person" means a person who is registered under this Act as a dealer, dealer's representative, commodity trading adviser or commodity trading adviser's representative, as the case may be;
"rules of the commodity market" means the rules governing the conduct of the commodity market concerned or persons who trade in commodity futures contracts in the commodity or commodities concerned, by whatever name such rule may be called and wherever contained;
"trading in commodity futures contracts", in relation to any person, whether acting as principal or agent, means making or offering to make an agreement with any other person in Malaysia or inducing or attempting to induce any other person in Malaysia to enter into or offer to enter into any agreement for the purchase or sale of a commodity under a futures contract or facilitating the conclusion of such an agreement.
(2)
For the purposes of this Act, a director or employee of a corporation, or a partner or employee of a firm, shall be deemed to be accredited to the corporation or firm, as the case may be, if he is, in his capacity as such director, partner or employee, duly authorized by the corporation or firm to act for or on behalf of that corporation or firm for the purpose of trading in commodity futures contracts.
"Specified Commodity Exchange" means any overseas commodity exchange specified by the Minister by order from time to time;
Part II
PART II
COMMODITIES TRADING COMMISSION
Section 3
(2)
The Commission shall consist of the following members who shall be appointed by the Minister:
(b)
the Secretary-General or Deputy Secretary-General of the Ministry of Primary Industries;
(c)
the Secretary-General or Deputy Secretary-General of the Ministry of Finance;
means the rules modity market modity futures lities concerned, be called and eans any over the Minister by cts", in relation cipal or agent, agreement with or attempting to enter into the purchase es contract or eement.
a director or or employee edited to the if he is, in his employee, duly act for or on the purpose of
SION corporate by commission", common seal, immovable otherwise deals ts corporate e following finister:
Secretary-Industries; Secretary-
(e)
not more than six persons with appropriate experience, knowledge or expertise.
(3)
Each member of the Commission shall, unless he sooner resigns or his office is sooner revoked, hold office for a period not exceeding two years on such terms and conditions as may be determined by the Minister and shall be eligible for reappointment.
(4)
The Minister may appoint any member of the Commission to exercise the functions of the Chairman if during any period owing to absence from Malaysia, illness or any other cause, the Chairman is unable to exercise his powers or perform his duties.
(5)
Subject to subsection (4), if the Chairman is absent from any meeting of the Commission or is incapacitated by illness from performing the functions of his office, the remaining members of the Commission may elect one of their number to act as Chairman during the vacancy, absence or incapacity, as the case may be.
(6)
A member of the Commission appointed under subsection (4) or elected under subsection (5) shall for the period that he acts as Chairman, have and may exercise all the functions of the Chairman.
(7)
The appointment of every member of the Commission shall be published in the Gazette.
Section 4
The Commission shall—
(b)
be responsible for supervising the activities of the exchange company and of the clearing house and promoting proper conduct amongst their members;
(c)
take all reasonable measures to safeguard the interest of persons who trade in commodity futures contracts;
(d)
suppress illegal and improper practices in relation to trading in commodity futures contracts and price manipulations in a commodity market;
(e)
promote and maintain the integrity of registered persons and encourage the promulgation by dealers and commodity trading advisers of balanced and informed advice to their clients;
(f)
advise the Minister on all matters relating to trading in commodity futures contracts;
(g)
advise the Minister on all matters relating to the purchase or sale of commodities for spot delivery or for deferred shipment or delivery; and
(h)
consider and suggest reforms of the law relating to trading in commodity futures contracts including changes to the constitution, rules and regulations of the exchange company and of the clearing house.
Section 5
The Commission shall have all such powers as may be necessary to carry out its functions under this Act and in particular---
(a)
to direct the exchange company or the clearing house to comply with, enforce, or give effect to their respective rules and regulations or to take such action as the Commission considers necessary and expedient, consistent with their rules and regulations;
(b)
subject to notice and after consultation with the exchange company and the clearing house, to fix position limits and limits on the amount of trading in accordance with section 66, for the purpose of diminishing, eliminating or preventing excessive speculation in any market of the exchange company;
(c)
to set up committees, which may consist of or include persons who are not members of the Commission, to advise or assist the Commission on such matters concerning its powers and functions as it considers fit, and the Commission may delegate, subject to such conditions and restrictions as it may impose, such of its powers and functions as it considers fit to any practices in ity futures a commo-of registered litigation by advisers of their clients; relating to acts;
law relating contracts rules and my and of relating to es for spot or delivery;
rs as may r this Act e clearing give effect ons or to considers with their tion with ing house, amount 166, for ating or y market ist of or s of the Commis-wers and Commis-nditions h of its t to any
COMMODITIES TRADING of such committees or to the Commissioner, and any act done or decision made by the committee or the Commissioner pursuant to such delegation shall be deemed to be the act or decision of the Commission;
(d)
to authorize the Chairman to set up ad hoc committees of the Commission from time to time, for such purposes and upon such terms, conditions and restrictions as the Commission may consider appropriate; and
(e)
to hear and determine whether by itself or through a committee appointed under paragraph (c) of this section, any appeal that is under this Act or pursuant to the rules of the exchange company, appealable to the Commission.
Section 6
(a)
to take such action as in the Commission's judgement is necessary to maintain or restore orderly trading in or liquidation of any futures contract, including but not limited to, the setting of temporary emergency margin levels on any futures contracts and the fixing of limits that may apply to a market position acquired in good faith prior to the effective date of the Commission's action;
(b)
where appropriate and necessary but without prejudice to the rights and interests of innocent third parties, to direct the clearing house not to make payment, refund or release to any person, any monies or securities available to the clearing house in excess after settlement of any contract that is in default under the rules of the clearing house or of the exchange company, until investigation and determination of the default are completed in accordance with the rules of the exchange company.
(2)
The term "emergency" as used in this section shall mean in addition to threatened or actual market manipulations and corners, any act of the Government or of a foreign government affecting a commodity, acts of war, acts of God or physical emergencies which cannot be handled by the exchange company or the clearing house, or any other major market disturbance which prevents the market from accurately reflecting the forces of supply and demand for such commodity.
Section 7
Notwithstanding any other written law to the contrary, any court reviewing any action of the Commission under section 6 shall not order an injunction or mandamus unless it has determined after notice to and hearing of the parties concerned that the action complained of was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
Section 8
The Minister may give to the Commission such directions as he may deem fit, not inconsistent with the provisions of this Act, as to the exercise or performance by the Commission of its functions under this Act.
Part III
PART III
COMMISSIONER OF COMMODITIES TRADING AND OTHER STAFF OF THE COMMISSION
Section 9
(2)
The Commission shall also appoint a Deputy Commissioner of Commodities Trading and such number of other officers and servants, including Commodities Trading Inspectors, as the Commission considers necessary for the purpose of discharging its functions under this Act.
(3)
The Commission shall, before establishing or modifying any scheme of service for the Commissioner, Deputy Commissioner and its officers and servants or of any class thereof, including the terms and conditions of service, salaries, allowances and other remuneration payable and facilities for loans for the purchase of conveyances, obtain the approval of the Public Services Department and the Treasury for the scheme or its modification.
(4)
The appointments of the Commissioner, Deputy Commissioner and Commodities Trading Inspectors shall be published in the Gazette.
rgencies which company or the ket disturbance a tely reflecting ch commodity.
aw to the conf the Commis injunction or notice to and the action com abuse of dis with law.
nmission suchistent with the r performance r this Act.
ADING AND SION proval of the Commodities int a Deputy and such cluding Com-Commission ischarging its tablishing or commissioner, d servants or and conditions or remunerate the purchase of the Public r the scheme oner, Deputy Inspectors
Section 10
(a)
be responsible for executing the decisions of the Commission, the management of its funds, the general administration of its affairs and perform such other duties as the Commission may from time to time determine or as the Chairman may from time to time direct;
(b)
be present at every meeting of the Commission unless he is excused from doing so by the Chairman, but he shall have no right to vote at the meeting;
(c)
conduct an annual audit and review of the exchange company and of the clearing house and submit a report thereon to the Commission for its consideration.
(2)
In the exercise of his powers and the performance of his duties, the Commissioner may be assisted by the Deputy Commissioner or by any officer of the Commission.
(3)
Where the Commissioner is unable to exercise his functions on grounds of sickness, absence or any other cause, the Deputy Commissioner shall exercise the functions of the Commissioner provided that the consent of the Minister shall be obtained where the deputation for the Commissioner exceeds or is likely to exceed a continuous period of three months.
Section 11
The Commissioner shall have the power—
(a)
to require the chief executives of the exchange company and of the clearing house to keep him fully informed of such activities and developments in the exchange company and the clearing house as may be specified by him in writing;
(b)
to communicate to the Management Board the full facts concerning any transaction or market operation, including the names of parties thereto, which in the judgement of the Commissioner disrupts or tends to disrupt any market or is otherwise harmful or against the best interests of producers, consumers or investors, or which is necessary or appropriate to effectuate the purposes of this Act provided that any information furnished by the Commissioner under this paragraph shall not be disclosed by the Management Board, except in any selfregulatory action or proceedings;
(i)
to produce any books of accounts, records or documents kept by them in connection with or for the purposes of their respective business; and
(ii)
to provide any other information relating to their respective business as he may consider necessary for the discharge of his functions;
(d)
to require the Management Board to direct any committee of the exchange company constituted under the rules of the exchange company which has failed or neglected to perform or to discharge a duty under those rules forthwith to perform or to discharge that duty; and
(e)
to issue such administrative guidelines and instructions to registered persons as are necessary to accomplish any of the purposes of this Act.
Section 12
(a)
shall preserve and aid in preserving secrecy with regard to all matters coming to his knowledge in the exercise or performance of any function under this Act;
(b)
shall not communicate any such matter to any person or use it to the pecuniary advantage of himself or of any other person; and
(c)
shall not suffer or permit any person to have access to any records in the possession, custody or control of any person to whom this subsection applies.
I that any informissioner under be disclosed by pt in any selfings;
npany and the rmation relating as he may con-lischarge of his accounts, records them in connection es of their res-rd to direct any company constituted company which form or to dises forthwith to ty; and guidelines and is as are necesurposes of this the exercise or his Act or for his Act, every who is or has ing any person serving secrecy coming to his performance of matter to any advantage of and erson to have session, custody from this sub-
(2)
Subsection (1) does not apply—
(a)
to the disclosure of any information authorized to be disclosed or furnished by the Commissioner; or
(b)
to the disclosure of information for the purpose of any legal proceedings brought under this Act or for the purpose of any report of any such proceedings.
(3)
Any person who—
(b)
aids, abets, counsels or procures any person to contravene subsection (1), commits an offence and is liable on conviction to a fine not exceeding ten thousand ringgit and to imprisonment for a term not exceeding one year.
Part IV
PART IV
FINANCIAL. PROVISIONS
Section 13
(2)
There shall be paid into this Fund—
(a)
such sums as may be provided to the Commission from time to time by Parliament;
(b)
all monies collected by the Commissioner by way of fees prescribed under this Act;
(d)
all monies earned or arising from any investment under section 16, or from any property, mortgages, charges, or debentures acquired by or vested in the Commission;
(f)
all other sums or property that may in any manner become payable to, or vested in the Commission in respect of any matter incidental to its functions and powers.
(3)
The Fund may be applied for—
(a)
defraying such expenditure as the Commission may incur in carrying out its functions and exercising its powers under this Act;
Section 14
(2)
There shall be paid into this Account-
(d)
lending to employees of the Commission for the purposes of purchasing conveyances, on such terms and conditions as may be prescribed.
(3)
The monies in this Account shall be applied by the Commissioner solely for the purposes set out in section 40, and in accordance with the regulations made thereunder.
Section 15
The Commission may, after consultation with the Minister, and upon such terms and conditions as may be approved by the Minister of Finance, borrow money for the purposes of carrying out its functions under this Act.
Section 16
(a)
in investments or securities authorized for the investment of trust funds by any written law for the time being in force; or
(2)
The Commission may invest the monies in the Futures Trading Deposits Account or any part thereof which is not immediately required for the purpose provided for in subsection (3) of section 14—
Section 17
COMMODITIES TRADING the Commission's obligations or carrying out its duties—
The Commodities Trading Commission Fund and the Futures Trading Deposits Account shall be subject to account and audit in accordance with the provisions of the Statutory Bodies (Accounts and Annual Reports) Act 1980.
Part V
PART V
COMMODITY EXCHANGE
Section 18
(2)
No company shall establish and operate a commodity exchange unless it has been granted approval under subsection (1) of section 19.
(3)
Any person who contravenes the provisions of subsection (1) or (2) commits an offence and is liable on conviction to a fine not exceeding ten thousand ringgit or imprisonment for a term not exceeding one year or to both.
22
Section 19
(2)
An application under subsection (1) shall be in a prescribed form and accompanied by—
(b)
such other documents and information as may be required by the Minister for the purposes of approval under subsection (1).
(3)
The requirements referred to in subsection (1) are—
(a)
that the objects contained in the constitution of the company include a provision for the establishment and operation of a commodity exchange;
(b)
that at least ten members of the company will carry on business dealing in commodities independently or in competition with each other;
(i)
maintain to the satisfaction of the Minister an adequate and properly equipped place of business;
(ii)
establish and operate commodity markets only at places approved by the Minister;
(iii)
establish or make arrangements for the establishment of a clearing house for the registration and settlement of futures contracts and the day-to-day adjustment of the financial position of such contracts;
(iv)
make arrangements to guarantee that futures contracts registered by the clearing house shall be fulfilled in the event of default by either of the two parties to such contracts;
n made to him establishment and odity exchange applies with the
1) shall be in a company; and nation as may the purposes subsection (1)
e constitution vision for the a commodity company will commodities on with each tion of the and properly odity markets the Minister; nents for the house for the t of futures adjustment such contracts;
arantee that by the clearin the event two parties to
(d)
that the constitution of the company provides for the making of rules applicable to the exchange company in its capacity as an exchange organisation and rules of commodity markets;
(e)
that the company shall make arrangements for the establishment of a Compensation Fund under Part IX;
(f)
that the constitution of the exchange company shall have been approved by the Commission.
Section 20
(2)
The exchange company and the clearing house, as the case may be, shall submit or cause to be submitted to the Commission for its approval-the constitution, rules and regulations or amendments thereto or any part thereof.
(a)
the constitution of the exchange company, the clearing house and every amendment thereto; and
(b)
the rules including the rules of the commodity market and regulations of the exchange company; the rules and regulations of the clearing house and every amendment thereto.
(3)
The Commission shall within thirty days after receipt of any submission under subsection (2), give notice in writing to the exchange company or the clearing house, as the case may be, of—
Section 21
(2)
The Management Board shall consist of—
(a)
not more than three members to represent each commodity who shall be elected from amongst members of the exchange company by the members; and
(2)
The Commission shall, before making the requisition under subsection (1), take full account of the views expressed by all concerned during the hearing referred to in subsection (1).
(b)
not more than three members to represent public interest who shall be appointed by the Minister after consultation with the Commission.
Section 22
(3)
Members of the Management Board other than those appointed by the Minister, shall hold office for such period as shall be determined by the constitution of the exchange company.
(4)
Members of the Management Board appointed by the Minister pursuant to subsection (2), shall hold office for such period as may be determined by the Minister.
Section 23
(a)
conduct surprise audits of its member firms especially those which deal with the public and hold customer funds;
is Act as well futures trading or the clearing accordingly.
making the ill account of ng the hearing age company "Mangement st of—
to represent elected from age company to represent inted by the he Commis-l other than ld office for constitution
I appointed , shall hold ned by the e exchange violations his Act and y rules or Board and house to-member firms public and
(b)
establish and enforce minimum capital and other financial requirements for all member firms which deal with the public and hold customer funds; and
(c)
establish an early warning system for monitoring undesirable situations and practices in the market.
(2)
The exchange company and the clearing house shall—
(a)
provide such assistance to the Commissioner as he reasonably requires for the performance of his functions and duties;
(b)
where they reprimand, fine, suspend, expel or otherwise take disciplinary action against one of their members, within seven days give to the Commissioner in writing particulars of the name of the member concerned, the reason for and nature of the action taken, the amount of fine, if any, and the period of the suspension, if any; and
(c)
allow the Commissioner at all reasonable times full and free access to the trading floor of any commodity market of the exchange, for any of the purposes of this Act.
Section 24
The trading in commodity futures contracts in a commodity market shall be in respect of such commodities as may be specified by the Minister by order from time to time.
Section 25
(a)
the exchange company has ceased to comply with any of the requirements specified in subsection (3) of that section;
(d)
he receives a recommendation from the Commission under section 29 for the revocation of the approval so granted.
(2)
The Minister shall give to the exchange company not less than fourteen days' notice in writing of his intention to revoke the approval under subsection (1) and the notice shall specify the grounds for revocation.
Section 26
(2)
The Minister shall give to the exchange company not less than fourteen days' notice in writing of his intention to direct suspension of trading under subsection (1) and the notice shall specify the grounds for the suspension.
Section 27
(b)
there exists an economic or financial crisis or any other circumstance, whether in Malaysia or elsewhere.
(2)
The Minister may, with the concurrence of the Minister of Finance, extend the closure of the commodity exchange under subsection (1) for further periods each not exceeding five trading days.
range company writing of his subsection (1) for revocation.
has ceased to subsection (3) eives a recom-section 29 the approval under ny commodity until such time faction of the it, or rectified commendation r revokes the ange company writing of his under sub grounds for rence of the company that period not ction of any n any com-ster is of the h trading is as occurred ial crisis or n Malaysia ence of the re of the for further s.
(3)
The Minister shall specify the grounds for the closure in the direction given under subsection (1) and the grounds for any extension of the closure under subsection (2).
Section 28
(i)
has failed to comply with or observe its own rules and regulations;
(ii)
has contravened any provision of this Act or any regulations, rules or orders made thereunder; or
(iii)
has failed to comply with any directive given by the Commission under this Act; or
(b)
the exchange company, clearing house, any member of their respective Boards or any officer or employee of the exchange company or clearing house has acted in any way relating to the operation of the commodity exchange, any commodity market or the clearing house which has prejudiced or is likely to be prejudicial to the public interest, the Commission may, after notice to and hearing of the parties concerned, take one or more of the following actions:
(i)
suspend trading in all or any commodity market of the exchange until such time as the exchange company has to the satisfaction of the Commission, complied with, or rectified the matter forming the basis of the suspension, or until the Commission cancels the suspension;
(ii)
make an order directing the exchange company, clearing house or individual concerned, to comply with or cease and desist from any such acts; and in the case of the exchange company or clearing house, impose a penalty not exceeding one hundred thousand ringgit, and in the case of a member of the Board or an officer or employee, impose a penalty not exceeding twenty thousand ringgit; or
(iii)
reprimand the exchange company, clearing house or the individual concerned.
(2)
A suspension, penalty or reprimand given under subsection (1) shall be conclusive unless within fourteen days thereafter, the exchange company, clearing house or individual concerned appeals to the Minister in writing against the suspension, penalty or reprimand, as the case may be.
(3)
An appeal under subsection (2) shall not act as a stay of the order of suspension made under subsection (1) (i) unless otherwise determined by the Commission.
(4)
The Minister may affirm, set aside any of the actions of the Commission made under subsection (1) or direct the Commission to modify its order.
Section 29
Where the Commission is of the opinion that the act or omission by the exchange company, any member of the Management Board or any officer of the exchange company under section 28, is of such a serious nature as to warrant a revocation of the approval granted to the exchange company under section 19, the Commission may, instead of suspending trading under section 28, make a recommendation to the Minister to revoke the approval granted by him to the exchange company.
Section 30
Where—
(b)
the exchange company is directed to suspend trading under section 26 or 28, or to close the commodity exchange under section 27, the Commissioner shall publish a notice of the revocation of the licence or the direction for the suspension of trading or for the closure of the commodity exchange, as the case may be.
pany, clearing ed.
nd given under within fourteen clearing house Minister in or reprimand, hall not act as de under submined by the de any of the subsection (1) order.
inion that the y, any member officer of the is of such a cation of the company under of suspending amendation to ited by him to on 25; or ed to suspend or to close the ion 27, of the revoca the suspension dity exchange,
Section 31
(2)
Any person who contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding twenty-five thousand ringgit or to imprisonment for a term not exceeding two years or to both.
Section 32
(2)
Any person who, without the authority of the Commissioner or a police officer not below the rank of Inspector, enters any premises which are locked and secured under subsection (1) commits an offence and is liable on conviction to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding one year or to both.
Part VI
PART VI
REGISTRATION OF DEALERS, COMMODITY TRADING ADVISERS AND REPRESENTATIVES
Section 33
(b)
hold himself out as carrying on such a business, unless such person is registered as a dealer under this Act.
(2)
No corporation that is a dealer shall carry on business as a dealer unless every director or employee who is accredited to the corporation is registered as a dealer under this Act.
(3)
No firm that is a dealer shall carry on business as a dealer unless every partner is registered as a dealer under this Act.
(4)
Subsection (1) shall not apply to a person who trades in commodity futures contracts only through a dealer registered under this Act.
(5)
Any person who knowingly contravenes this section commits an offence and is liable on conviction to a fine not exceeding fifty thousand ringgit and, in the case of a continuing offence, to a further fine of one thousand ringgit for each day during which the offence continues.
(6)
Any futures contract made by any person, whether as principal or agent, who is required to be registered under subsection (1) and who is not registered as so required, may be rescinded by any other party to the contract who, upon so doing, shall be entitled to recovery of any money or other thing he may have paid or delivered under the contract.
Section 34
(a)
for direct remuneration, carry on a business of advising any other person concerning the purchase or sale of futures contracts;
(b)
for direct remuneration, as part of a regular business, issue or circulate analyses or reports concerning the purchase or sale of futures contracts;
(c)
for direct remuneration, pursuant to a contract or arrangement with a client, undertake on behalf of the client the management of a portfolio of commodities, including the arranging of purchase, sale, exchange or storage of commodities, unless such person is registered as a commodity trading adviser under this Act.
er shall carry on actor or employee is registered as a arry on business stered as a dealer o a person who only through a contravenes this le on conviction ringgit and, in further fine of ring which the by any person, required to be is not registered any other party shall be entitled ing he may have
(3)
, no person on a business of learning the purs;
rt of a regular lyses or reports sale of futures it to a contract undertake on nent of a port-the arranging torage of commodity trading
(2)
Paragraph (a) of subsection (1) shall not apply to the giving of advice concerning the purchase or sale of futures contracts by a dealer to his client, if such activity is incidental to his carrying on business as a dealer.
(3)
Paragraphs (a) and (b) of subsection (1) shall not apply to the proprietor or publisher of, or contributor to, a publication that is generally available to the public otherwise than on subscription who only in that publication advises other persons concerning the purchase or sale of futures contracts, or issues or circulate analyses or reports concerning the purchase and sale of futures contracts, not being a proprietor or publisher of, or contributor to, a publication whose principal or only object is to advise others concerning the purchase or sale of futures contracts, or to issue or circulate analyses or reports concerning the purchase and sale of futures contracts.
(4)
For the purposes of subsection (3), "publication" means a bona fide newspaper, magazine, journal or other periodical publication.
(5)
Any person who knowingly contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding ten thousand ringgit and, in the case of a continuing offence, to a further fine of one hundred ringgit for each day during which the offence continues.
Section 35
(2)
Any person who knowingly contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding five thousand ringgit and, in the case of a continuing offence, to a further fine of one hundred ringgit for each day during which the offence continues.
Section 36
(2)
Any person who knowingly contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding five thousand ringgit and, in the case of a continuing offence, to a further fine of one hundred ringgit for each day during which the offence continues.
Section 37
(2)
The Commissioner shall issue to a person registered under subsection (1) an appropriate certificate of registration which shall—
(a)
be valid for a period of twelve months beginning with the day on which it is issued; and
(3)
A certificate of registration issued under subsection (2) shall specify the name of the person authorized to carry on a business as a dealer, commodity trading adviser, dealer's representative, or commodity trading adviser's representative, as the case may be.
(4)
The issue of a certificate of registration to a person shall not authorize such person to carry on the business under any name other than that specified in the certificate.
a commodity a commodity ction 34, other n accountant, way of salary, on is registered tentative under ding adviser.
travenes sub-ole on convic-d ringgit and, further fine of ing which the
Commissioner person in the he prescribed presentative, o a person opriate certi-onths begin-sued; and he Commis-under sub-rson autho-commodity commodity may be.
nation to a carry on the specified in
Section 38
Subject to subsection (2), the Commissioner shall refuse to register an applicant as a dealer under section 37 unless—
(a)
(i)
he is a member of the exchange company; and
(ii)
he has paid to the Commissioner a deposit of not less than one hundred thousand ringgit in cash or in such other form as the Commissioner may, in the particular case, allow, if he intends to trade on any Specified Commodity Exchange;
(b)
in the case of an applicant who is a director of a corporation, or a partner of a firm, or an employee of a corporation or firm who is accredited to the corporation or firm, as the case may be, as a dealer—
(i)
the corporation or firm is a member of the exchange company; and
(ii)
the corporation or firm has paid to the Commissioner a deposit of not less than one hundred thousand ringgit in cash or in such other form as the Commissioner may, in the particular case, allow on the registration of the corporation or firm as a dealer if he intends to trade on any Specified Commodity Exchange;
(i)
the corporation or firm is a member of the exchange company; and
(ii)
the corporation or firm has paid to the Commissioner a deposit of not less than one hundred thousand ringgit in cash or in such other form as the Commissioner may, in the particular case, allow on the registration of the corporation or firm as a dealer, if it intends to trade on any Specified Commodity Exchange.
Section 39
(i)
the applicant has not provided the Commissioner with such information relating to him or any person employed by or associated with him for the purposes of his business, and to any circumstances likely to affect his method of conducting business, as may prescribed under this Act;
(ii)
the applicant is an undischarged bankrupt or has committed an act of bankruptcy within the meaning of the Bankruptcy Act 1967 or has made a composition or arrangement with his creditors;
(iii)
it appears to the Commissioner that, by reason of the applicant, or any person employed by or associated with him for the purposes of his business, having been convicted, whether in Malaysia or elsewhere, of an offence the conviction for which involved a finding that he acted fraudulently or dishonestly, or having been convicted of an offence against this Act or any Act superseded by this Act, or having committed a breach of any regulations made under this Act or any Act superseded by this Act relating to registered persons, the applicant is not a fit and proper person to be registered;
(iv)
it appears to the Commissioner that, by reason of any other circumstances whatsoever which either is likely to lead to the improper conduct of business by, or reflect discredit on the method of conducting business of, the applicant or any person employed by or associated with him for the purpose of his business, the applicant is not a fit and proper person to be registered; or e to register an is an individual, provided the Com-rmation relating employed by or the purposes of y circumstances d of conducting described under charged bankrupt of bankruptcy the Bankruptcy composition or editors;
ssioner that, by or any person with him for less, having been Malaysia or else conviction for that he acted itly, or having once against this by this Act, or of any regula-ct or any Act relating to aplicant is not a be registered;
sioner that, by instances what-lely to lead to business by, or method of con-pllicant or any associated with s business, the proper person
(v)
the applicant is unable to satisfy such minimum financial requirements as may be prescribed by the Commission by order from time to time;
(i)
the applicant has not provided the Commissioner with such information relating to it or any person employed by or associated with it for the purposes of its business, and to any circumstances likely to affect its method of conducting business, as may be prescribed under this Act;
(ii)
any director or employee of the applicant who applies to be registered as a dealer in his capacity as such director or employee, as the case may be, would be refused registration under subparagraph (ii) of paragraph (a);
(iii)
the applicant has at any time prior to the application entered into any composition or arrangement with its creditors;
(iv)
it appears to the Commissioner that, by reason of the applicant, or any director or employee of the applicant, having been convicted, whether in Malaysia or elsewhere, of an offence the conviction for which involved a finding that it or he acted fraudulently or dishonestly, or having been convicted of an offence against this Act or any Act superseded by this Act, or having committed a breach of any regulations made under this Act or any Act superseded by this Act relating to registered persons, the applicant is not a fit and proper person to be registered;
(v)
it appears to the Commissioner that, by reason of any other circumstances whatsoever which either is likely to lead to the improper conduct of business by, or reflect discredit on the method of conducting business of, the applicant or any director or employee of the applicant, the applicant is not a fit and proper person to be registered; or
(vi)
the applicant is unable to satisfy such minimum financial requirements as may be prescribed by the Commission by order from time to time;
(i)
the applicant has not provided the Commissioner with such information relating to it or any person employed by or associated with it for the purposes of its business, and to any circumstances likely to affect its methods of conducting business, as may be prescribed under this Act;
(ii)
any partner or employee of the applicant who applies to be registered as a dealer in his capacity as such partner or employee, as the case may be, would be refused registration under subparagraph (ii) of paragraph (a);
(iii)
the applicant has at any time prior to the application entered into any composition or arrangement with its creditors;
(iv)
it appears to the Commissioner that, by reason of the applicant, or any partner or employee of the applicant, having been convicted, whether in Malaysia or elsewhere, of an offence the conviction for which involved a finding that it or he acted fraudulently or dishonestly, or having been convicted of an offence against this Act or any Act superseded by this Act, or having committed a breach of any regulations made under this Act or any Act superseded by this Act relating to registered persons, the applicant is not a fit and proper person to be registered;
applicant, the proper person satisfy such nents as may ssion by order is a firm, on led the Comation relating loyed by or purposes of its stances likely ducting busi id under this the applicant as a dealer trner or eme, would be subparagraph prior to the composition editors;
ner that, by y partner or having been sia or else nviction for that it or he honestly, or an offence superseded committed a le under this by this Act , the appli-person to be
(v)
it appears to the Commissioner that by reason of any other circumstances whatsoever which either are likely to lead to the improper conduct of business by, or reflect discredit on the method of conducting business of, the applicant or any partner or employee of the applicant, the applicant is not a fit and proper person to be registered; or
(vi)
the applicant is unable to satisfy such minimum financial requirements as may be prescribed by the Commission by order from time to time.
(2)
The Commissioner shall not refuse to register an applicant under subsection (1) without first giving the applicant an opportunity of being heard.
(3)
Where the Commissioner refuses to register an applicant under subsection (1), he shall notify the applicant in writing to that effect stating the reasons for the refusal.
Section 40
(a)
an individual who is a dealer becomes bankrupt, the Commissioner shall transfer the deposit paid by or in respect of such individual under section 38 to his trustee in bankruptcy;
(b)
a corporation or firm that is a dealer is ordered to be wound up or dissolved by or under the supervision of a court, the Commissioner shall transfer the deposit paid by or in respect of such corporation or firm under section 38 to the liquidator of the corporation or firm; or
(c)
the Commissioner has reason to believe that any person has sustained pecuniary loss because of a default committed in the course of or in connection with the commodity futures trading business of a dealer, by the dealer or any director, partner or employee, as the case may be, accredited to the dealer, the Commissioner may forfeit all or any part of the deposit paid by or in respect of the dealer under section 38.
(2)
Where a deposit is transferred to a trustee in bankruptcy under paragraph (a) of subsection (1), or liquidator under paragraph (b) of subsection (1), such deposit shall be applied by the trustee or liquidator, as the case may be, in accordance with regulations made under this Act.
(3)
In the event of a deposit or any part of a deposit being forfeited under paragraph (c) of subsection (1), the deposit or part thereof so forfeited shall be applied by the Commissioner in accordance with regulations made under this Act.
(4)
Where any deposit is transferred or forfeited under subsection (1), the Commissioner shall notify in writing the person who paid the deposit of such transfer or forfeiture.
(5)
A deposit lodged under section 38 shall be applied by the Commissioner in accordance with regulations made under this Act.
(6)
No deposit paid to the Commissioner under section 38 shall be available to compensate any person who has sustained pecuniary loss in consequence of trading on an exchange that is not a Specified Commodity Exchange.
Section 41
(2)
The Commissioner may require an applicant under subsection (1) to supply him with any further information that he considers necessary to deal with the application.
(3)
The Commissioner may refuse to renew the registration of a registered person under subsection (1)—
(a)
on any ground on which the Commissioner may refuse to register under section 39;
trustee in tion (1), or on (1), such liquidator, as tions made of a deposit section (1) be applied regulations r forfeited ll notify in ch transfer shall be ance with ner under any person sequence of Specified imissioner red person ne month n, if not t of the person.
applicant y further deal with renew the subsection missioner
(b)
on any ground on which the Commissioner may revoke the registration of such person under section 42 or 44; or
(c)
on the ground of failure by such person to comply with subsection (1) or with any requirement of the Commissioner under subsection (2).
(4)
The Commissioner shall issue to a registered person whose registration is renewed under subsection (1) an appropriate certificate of registration which shall—
(a)
be valid for a period of twelve months beginning with the day of the expiry of the certificate of registration held by the registered person at the time of his application for renewal; and
(5)
Nothing in this section shall be construed as preventing a renewal of the registration of a registered person that has been renewed from being further renewed under this section.
(6)
The Commissioner shall not refuse to renew the registration of a registered person under subsection (3) without first giving such person an opportunity of being heard.
(7)
Where the Commissioner refuses to renew the registration of a registered person under subsection (3), he shall notify such person in writing to that effect stating the reasons for the refusal.
Section 42
(2)
The Commissioner may revoke the registration of a registered person—
(i)
on any ground on which the Commissioner may refuse to register under paragraph (a) of subsection (1) of section 39;
(iii)
if he fails or ceases to carry on the business for which he was registered; or
(iv)
if, in the case of a representative, the registration of the dealer or commodity trading adviser, in relation to whom the certificate of registration of the representative was granted, is revoked;
(i)
on any ground on which the Commissioner may refuse to register under paragraph (b) of subsection (1) of section 39;
(iv)
if it has entered into any composition or arrangement with its creditors; or
(i)
on any ground on which the Commissioner may refuse to register under paragraph (c) of subsection (1) of section 39;
(iii)
if a levy of execution in respect of it has not been satisfied;
the registration rson who is an respect of him ch the Commis-register under on (1) of section carry on the s registered; or presentative, the or commodity n to whom the of the reprerevoked;
erson that is a h the Commis-register under section (1) of round up;
respect of it has composition or itors; or on the business 1;
1 the Commister under para-of section 39;
rson that is a ing or will be espect of it has
(iv)
if it has entered into any composition or arrangement with its creditors; or
(3)
The Commissioner may revoke the registration of a registered person at the request of such person.
(4)
The Commissioner shall not revoke the registration of a registered person under subsection (2) without first giving such person an opportunity of being heard.
(5)
Where the Commissioner revokes the registration of a registered person under subsection (2) he shall notify such person in writing to that effect stating the reasons for the revocation and specifying the date on which the revocation shall take effect.
Section 43
The registration of a registered person is deemed to be suspended when that registered person is suspended from membership of the exchange company under the rules of the exchange company and the suspension shall continue until his membership in the exchange company is restored or until his registration is determined in accordance with the provisions of this Act, whichever is earlier.
Section 44
(i)
is committing or has committed an act of misconduct;
(ii)
is no longer a fit and proper person to continue to remain registered by reason of any other circumstances which have led, or are likely to lead, to the improper conduct of business by him or to reflect discredit on the method of conducting his business; or
(b)
that, in the case of a registered person that is a corporation or firm, a director, partner or employee accredited to the corporation or firm, as the case may be, who is a registered person—
(i)
is committing or has committed an act of misconduct; or
(ii)
is no longer a fit and proper person to continue to remain registered by reason of any other circumstances which have led, or are likely to lead, to the improper conduct of business by him or to reflect discredit on the method of conducting his business.
(2)
If after inquiring into an allegation under subsection (1) against a registered person, the Commissioner is of the opinion that the allegation is proved, he may if he thinks fit—
(b)
suspend the registration of the person for such time, or until the happening of such event, as the Commissioner may determine;
(3)
The Commissioner shall, at the hearing of an inquiry into an allegation under subsection (1) against a registered person, give the person an opportunity of being heard.
(4)
Where the Commissioner imposes any of the penalties specified under subsection (2), he shall notify the registered person concerned and the corporation or firm to which he is accredited and the exchange company, in writing to that effect stating the reasons therefor and, in the case of a revocation or suspension of registration, specifying the date on which the revocation or suspension shall take effect.
(5)
For the purpose of this section, "misconduct" means—
(a)
any failure to comply with the requirements of this Act with respect to registered persons;
rson that is a partner oration or firm, ered person— ted an act of er person to ed by reason which have the improper or to reflect conducting under sub-ommissioner ved, he may son for such ch event, as ve thousand aring of an (1) against a portunity of any of the shall notify corporation or change comasons therespension of revocation nisconduct"
(b)
any failure to observe terms and conditions of a certificate of registration;
(c)
any act or omission relating to the conduct of business of a registered person which is or is likely to be prejudicial to the public interest.
(6)
Any sum ordered by the Commissioner to be paid by way of penalty under subsection (2), shall be deemed to be a debt due from the registered person concerned to the Commission and shall be recoverable accordingly in a court.
Section 45
(2)
A revocation or suspension of the registration of a person does not operate so as to—
(a)
avoid or affect any agreement, transaction or arrangement relating to the trading in commodity futures contracts entered into by such person, whether the agreement, transaction or arrangement was entered into before or after the revocation or suspension of the registration; or
(b)
affect any right, obligation or liability arising under any such agreement, transaction or arrangement.
(3)
A person whose registration is revoked under section 42 (other than subparagraph (iii) or (iv) of paragraph (a), subparagraph (ii) or (v) of paragraph (b), or subparagraph (ii) or (v) of paragraph (c), of subsection (2) of that section) or section 44 or suspended pursuant to section 44 but which has not been lifted before the expiry of his registration under this Act may not apply to be registered under this Part as a registered person until the expiration of at least twelve months from the date of revocation.
Section 46
Where---any person who is aggrieved by the decision of the Commissioner may, within one month after he is notified of the decision, appeal to the Commission whose decision shall be final.
(b)
a deposit is transferred or forfeited by the Commissioner under section 40 or applied in accordance with regulations made under this Act;
(c)
the Commissioner refuses to renew the registration of a registered person under section 41;
(d)
a certificate of registration is issued by the Commissioner under subsection (2) of section 37 or subsection (4) of section 41 subject to conditions;
(e)
the registration of a registered person is revoked by the Commissioner under section 42; or
(f)
the registration of a registered person is revoked or suspended, or a registered person is reprimanded or fined by the Commissioner under section 44,
Section 47
(2)
For the purpose of subsection (1), "representation" means a representation or statement—
(c)
about an existing intention, opinion, belief, knowledge or other state of mind.
register an appli-forfeited by the 40 or applied in made under this new the registrar section 41;
s issued by the n (2) of section n 41 subject to erson is revoked tion 42; or erson is revoked person is remissioner under decision of the th after he is the Commission se of obtaining under this Part, son, makes any rally, which he material parti conviction to or to imprison or to both.
1, "representa-it—
or present;
oinion, belief,
Section 48
(a)
in the address in Malaysia at which he carries on the business as a registered person;
(c)
in any information supplied in or in connection with his application for registration or renewal of registration, as the case may be.
(2)
Every registered person shall forthwith, on ceasing to carry on the business for which he was registered, notify the Commissioner in the prescribed form of that fact.
(3)
If, at any time while a corporation or a firm is registered as a dealer or commodity trading adviser, any director, partner or employee of the corporation or firm becomes or ceases to be accredited to the corporation or firm, as the case may be, the corporation or firm shall within seven days after that event notify the Commissioner in the prescribed form of the name and address of that director, partner or employee and such other particulars as may be specified in the form.
(4)
If a dealer's representative or commodity trading adviser's representative becomes or ceases to be the representative of a dealer or commodity trading adviser, that representative and the dealer or commodity trading adviser, as the case may be, shall within seven days after that event notify the Commissioner in the prescribed form of that fact.
(5)
Any person who without reasonable excuse contravenes this section commits an offence and is liable on conviction to a fine not exceeding one thousand ringgit.
Section 49
(2)
The registers kept under this section and all applications made by registered persons for registration or renewal of registration shall, during such hours as may be prescribed and on payment of any prescribed fee, be open to inspection by members of the public.
(2)
The information required to be published under subsection (1) shall be published at least once in each year.
(3)
A copy of any extract of an entry in any register kept under this section, purporting to be certified by the Commissioner, shall be admissible as evidence in any legal proceedings, whether under this Act or otherwise.
(3)
If the Commissioner at any time amends any register kept by him under this Part by adding or removing the name of any person, he shall cause particulars of the amendments to be published in the Gazette.
Section 50
(1)
The Commissioner shall cause to be published in the Gazette, in such manner as he thinks fit, the names and addresses of all registered persons.
Part VII
PART VII
ACCOUNTS AND AUDIT
Section 51
In this Part, unless the context otherwise requires, "client" means a person on whose account a dealer carries on any trading in commodity futures contracts as an agent.
Section 52
(a)
cause to be kept such accounting and other records as will sufficiently explain the transactions and reflect the financial position of the business of trading in commodity futures contracts carried on by him and will enable true and fair profit and loss accounts and balance sheets to be prepared from time to time; and
(b)
cause those records to be kept in such a manner as will enable them to be conveniently and properly audited.
ry in any register be certified by e as evidence in his Act or other-section and all is for registration ing such hours as of any prescribed of the public.
to be published e thinks fit, the persons.
published under ast once in each me amends any by adding or rehall cause partiublished in the ating and other plain the transposition of the modity futures and will enable accounts and from time to terwise requires account a dealer futures contracts such a manner nveniently and
(2)
Without prejudice to the generality of subsection (1), a dealer shall cause records to be kept—
(i)
all amounts received and paid by the dealer, including amounts paid to and disbursed from a segregated account;
(ii)
all purchases and sales of futures contracts made by the dealer, and the charges and credits arising from them; and
(b)
in sufficient detail to show separately particulars of all transactions by the dealer with, or for the account of—
(3)
A dealer shall retain—
(a)
for a period of not less than five years, the records kept in accordance with this section; and
(i)
a copy of each futures contract made out by him as agent of a client; and
(4)
Records required to be kept by a dealer by this section shall be kept either by making entries in a bound book or by recording or storing the relevant matters in any other manner as may be approved by the Commissioner, and anything so entered, recorded or stored shall be deemed to have been effected by, or with the authority of, the dealer.
(5)
The dealer shall take reasonable precautions for guarding against falsification and damage or loss and for facilitating discovery of any falsifications.
(6)
Any dealer who, without reasonable excuse, contravenes this section commits an offence and is liable on conviction to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding six months or to both.
(7)
If, in any records kept in accordance with this section a person wilfully—
(a)
enters, records or stores, or causes to be entered, recorded or stored, in any manner whatsoever any matter that he knows to be false or misleading in a material particular;
(b)
destroys, removes or falsifies, or causes to be destroyed, removed or falsified, in any manner whatsoever any matter that is entered, recorded or stored; or
(c)
fails to enter, record or store any matter with intent to falsify the records or any part of the records intended to be compiled from that matter, he commits an offence and is liable on conviction to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding one year or to both.
Section 53
(2)
All amounts required to be paid into a segregated account under subsection (1) shall be retained there by the dealer until they are paid to the client on whose behalf they are being held or in accordance with his directions or until they are required to complete payment in respect of the purchase or sale of futures contracts on behalf of such client.
ice with this uses to be any manner knows to be particular;
causes to be any manner ed, recorded conviction to iggit or to e year or to matter with part of the from that p, with an inner for the ensed bank, which he shall after their other properearing house are received in respect of except those ice with his payment into segregated segregated ained there it on whose ce with his nplete pay-of futures
(3)
Every dealer shall keep a record of—
(a)
all amounts paid into a segregated account kept by him specifying the clients on whose behalf the amounts are held and the dates on which they were paid into the account;
(b)
all withdrawals from the segregated account, the dates of such withdrawals, and the names of the clients on whose behalf the withdrawals are made; and
(4)
A dealer shall not apply or permit or suffer any monies or securities standing to the credit of his clients in a segregated account to be applied against the debits to his own trading account (which expression would include accounts of his partners, directors and employees) or for the benefit of trading accounts of any other client of the dealer.
(5)
Any dealer or any employee or agent of the dealer who—
(a)
without reasonable excuse, contravenes this section commits an offence and is liable on conviction to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding one year or to both;
(b)
in contravention of this section, embezzles, steals or otherwise converts to his own use or the use of another, any money or securities received by such person for the purpose of margining, guaranteeing or securing the trades or contracts of any client or accruing to such client as a result of such trades or contracts or otherwise was received from any client in connection with the business of trading in commodities futures contracts, commits an offence and is liable on conviction to a fine not exceeding twenty-five thousand ringgit or to imprisonment for a term not exceeding two years or to both:
Section 54
(2)
Any payment made in contravention of subsection (1) shall be void ab initio, and no person to whom the money is paid shall obtain any title to it.
(3)
Subsections (1) and (2) shall not affect the validity of any payment made from a segregated account by a dealer to the clearing house in fulfilment of the dealer's obligations under the regulations of the clearing house.
Section 55
Nothing in this Part shall be construed as taking away or affecting any lawful claim or lien which any person has in respect of any money held in a segregated account or in respect of any money received for the purchase of futures contracts or from the sale of futures contracts before the money is paid into a segregated account.
Section 56
(2)
An auditor is not eligible for appointment under subsection (1) if—
(a)
where the dealer is an individual, he is an employee of the dealer or is in the employment of any employee of the dealer;
(b)
where the dealer is a corporation, he is a director or employee of the corporation or is in the employment of any director or employee of the corporation; or
(c)
where the dealer is a firm, he is a partner or employee of the firm or is in the employment of any partner or employee of the firm.
(3)
The name and particulars of every auditor appointed under this section shall be given to the Commissioner in writing within one month of the appointment being made.
in this Part shall not be a dealer or be under the order ention of subl no person to y title to it.
lect the validity d account by a of the dealer's clearing house.
rued as taking lien which any in a segregated received for the m the sale of s paid into a or to audit his nts required to 53) and, where for the dealer, able thereafter, pointment under dual, he is an he employment ation, he is a rporation or is or or employee is a partner or he employment he firm.
every auditor given to the month of the
Section 57
(2)
Where an application for the extension of the period of six months specified in subsection (1) is made by a dealer to the Commissioner and the Commissioner is satisfied that there are special reasons for requiring the extension, the Commissioner may extend that period by one month subject to such conditions as the Commissioner thinks fit to impose.
(3)
Any dealer who fails to comply with subsection (1) or with any condition imposed under subsection (2) commits an offence and is liable on conviction to a fine not exceeding two thousand five hundred ringgit.
Section 58
If during the performance of his duties as auditor for a dealer, an auditor—
(a)
becomes aware of any matter which in his opinion adversely affects the financial position of the dealer to a material extent; or
(b)
discovers evidence of a contravention by the dealer of section 52 or 53, he shall, as soon as practicable thereafter, send to the Commissioner and to the dealer a report in writing of the matter or the contravention.
Section 59
(c)
the Commissioner has reason to believe that an offence against this Act or regulations or rules made thereunder has been committed or that a contravention of any of the conditions of registration has been committed, the Commissioner may, if he is satisfied that it is in the interests of the dealer, dealer's clients, or the general public, to do so, appoint in writing an auditor to examine and audit, either generally or in relation to any particular matter, the books, accounts and records of the dealer.
(2)
Where the Commissioner is of the opinion that the whole or any part of the costs and expenses of an auditor appointed by him under subsection (1) should be borne by the dealer, the Commissioner may, by order in writing, direct the dealer to pay a specified amount, being the whole or part of such costs and expenses, within the time and in the manner specified.
(3)
Where a dealer fails to comply with an order under subsection (2), the amount specified in the order may be sued for and recovered by the Commissioner as a debt in a court.
Section 60
(2)
Every application under subsection (1) shall state----
(a)
the particulars of the circumstances in respect of which the dealer is alleged to have failed to account;
(b)
the particulars of the moneys and the dealings in futures contracts in respect of which the failure has occurred; and e that an or rules or that a itions of it is in e general editor tolation to d records ion that ses of an 1) should by order amount, expenses, an order the order missioner g from a count to 1, or any for him after first planation examine to any cords of
(1)
shall n respect failed to dealings which the
(3)
The statements in an application under subsection (1) shall be verified by a statutory declaration made by the applicant and shall, if made in good faith and without malice, be privileged.
(4)
The Commissioner shall not appoint an auditor under subsection (1) unless he is satisfied that-
(b)
it is in the interests of the dealer, applicant or general public that the books, accounts and records of the dealer should be examined, audited and reported on.
(5)
Where the Commissioner is of the opinion that the whole or any part of the costs and expenses of an auditor appointed by him under subsection (1) should be borne by the dealer or applicant, the Commissioner may, by order in writing, direct the dealer or applicant to pay a specified amount, being the whole or part of such costs and expenses, within the time and in the manner specified.
(6)
Where a dealer or applicant fails to comply with an order under subsection (5), the amount specified in the order may be sued for and recovered by the Commissioner as a debt in a court.
Section 61
An auditor appointed under section 59 or 60 shall on the conclusion of the examination and audit in respect of which he was appointed, make a report thereon to the Commissioner.
Section 62
(a)
examine on oath the dealer and, where the dealer is a corporation or firm, any director of the corporation or partner of the firm, as the case may be, and any of the dealer's employees and agents and any other auditor appointed under this Act in relation to those books, accounts and records;
(b)
require the dealer and, where the dealer is a corporation or firm, any director of the corporation or partner of the firm, as the case may be, and the dealer's employees and agents, to produce any books, accounts and records held by or on behalf of the dealer relating to his business;
(c)
require an auditor appointed by the dealer to produce any books, accounts and records held by him relating to the business of the dealer;
(d)
require the clearing house to produce any books, accounts and records kept by it relating to the business of the dealer;
(e)
require the clearing house to provide any information in its possession relating to the business of the dealer;
(f)
employ such persons as he considers necessary to assist him to carry out the examination and audit; and
(g)
by instrument in writing under his hand, authorize any person employed by him to do, in relation to the examination and audit, any act or thing that he could do himself as an auditor, except the examination of any person on oath, under this subsection.
(2)
Any person who, without reasonable excuse, refuses or fails to answer any question put to him, or fails to comply with any request made to him, by an auditor appointed under section 59 or 60 or person authorized under paragraph (g) of subsection (1) commits an offence and is liable on conviction to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding one year or to both.
(3)
If the clearing house, without reasonable excuse, fails to comply with any request made to it by an auditor appointed under section 59 or 60 or person authorized under paragraph (g) of subsection (1), the clearing house commits an offence and is liable on conviction to a fine not exceeding twenty-five thousand ringgit.
dealer is a the corpo use may be, its, to prods held by o his busi-dealer to records held dealer;
produce any it relating any inforne business s necessary nation and and, autho to do, in lit, any act an auditor, on oath, le excuse, to him, or him, by an or person n (1) com a fine not onment for ble excuse it by an or person on (1), the ble on con thousand
Section 63
(a)
destroys, conceals or alters any book, account or record relating to the business of a dealer; or
(b)
sends, or conspires with any other person to send, out of Malaysia any such book, account or record, or any property of any description belonging to or in the possession or under the control of a dealer, commits an offence and is liable on conviction to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding two years or to both.
(2)
If, in a prosecution of an offence under subsection (1), it is proved that the person charged—
(a)
destroyed, concealed or altered any book, account or record mentioned in paragraph (a) of that subsection; or
(b)
sent, or conspired to send, out of Malaysia any such book, account or record, or any property mentioned in paragraph (b) of that subsection.
the onus of proving that in so doing he did not act with intent to prevent, delay or obstruct the carrying out of an examination and audit under this Part shall lie on him.
Section 64
Except as may be necessary for the carrying into effect of the provisions of this Act or so far as may be required for the purposes of any legal proceedings, whether civil or criminal, an auditor appointed under section 59 or 60 or any employee of such auditor shall not divulge any information which may come to his knowledge in the course of performing his duties as such auditor or employee, as the case may be, to any person other than—
Section 65
Nothing in this Part shall prevent the exchange company or Commissioner from imposing on dealers any further obligations or requirements which it or he thinks necessary with respect to—
Part VIII
PART VIII
Section 66
(2)
Nothing in subsection (1) shall be construed as prohibiting the Commission from fixing different trading or position limits for different specified commodities, commodity markets or delivery months or from exempting certain transactions specified in the notification.
Section 67
Where under section 66 the Commission has established any limits, no person shall—
(a)
directly or indirectly, buy or sell or agree to buy or sell, under futures contracts for such specified commodity on, or subject to the rules of, the commodity market to which the notification apply, any amount of such specified commodity during any one business day in excess of any trading limit fixed for one business day or other stated period by the Commission; or
(b)
directly or indirectly hold or control a net long or net short position in such specified commodity for future delivery on, or subject to the rules of, the relevant commodity market in excess of any position limit fixed by the Commission for or with respect to such specified commodity.
the exchange ng on dealers which it or he n reports by
1d records.
sultation with published in the e amount of is which may contracts in subject to the construed as making different specified com-y months or specified in the nmission has l or agree to acts for such act to the rules ich the notifi-uch specified business day in for one busi-by the Com-rol a net long ified commoubject to the y market in fixed by the ect to such
Section 68
(2)
Where a person's aggregate trading position in respect of any commodity, is equal to or exceeds the reportable level fixed by the Commission under subsection (1), such person shall each day that the level is equalled or exceeded, file or cause to be filed with the Commissioner a report of the position, on such forms as may be prescribed by the Commission.
(3)
Every dealer shall each day that any account held by him in respect of any person, is equal to or exceeds the level fixed by the Commission under subsection (1), file or cause to be filed with the Commissioner a report of the position, in such account, on such forms as may be prescribed by the Commission.
(4)
For the purpose of subsection (3), if any person holds or has a financial interest in or controls more than one account, all such accounts shall be considered as a single account.
Section 69
No person shall transact on or through any commodity market, or hold himself out as being prepared to transact on or through any commodity market, any dealing which confers on any person an option to purchase or sell any commodity, except as provided in the rules of the commodity market.
Section 70
(2)
No dealer shall knowingly execute, or hold himself out as having executed, an order for the purchase or sale of a commodity in a futures market, without having effected a bona fide purchase or sale of such commodity for the specified delivery date in such market.
(3)
No person shall circulate, disseminate, or authorize, or be concerned in, the circulation or dissemination of, any statement or information to the effect that the price of any futures contract will or is
Section 71
No person shall enter into, offer to enter into or confirm the execution of any transaction involving any commodity which is of the character of or is commonly known to the trade as "wash sale", "cross trade", "accommodation trade" or "fictitious sale" except as is permitted in the rules of any commodity market.
Section 72
Any person who—
(a)
manipulates or attempts to manipulate the price of any commodity in a commodity market; or likely to rise or fall because of the market operations of one or more persons which, to his knowledge are conducted in contravention of subsection (1).
(b)
corners or attempts to corner a commodity market, commits an offence and shall on conviction be liable to a fine not exceeding one hundred thousand ringgit and to a term of imprisonment not exceeding five years.
Section 73
(2)
Any person who is aggrieved by any decision of the Commissioner under subsection (1) may appeal to the Commission within one month of the notification of the decision, and the decision of the Commission shall be final.
market operations knowledge are ion (1).
to enter into or on involving any or is commonly "cross trade" sale" except as odity market.
manipulate the a commodity
: a commodity iction be liable thousand ringgiteding five years.
ason to believe attempting to n a commodity notice on such cause why an 1, his nominees incorporate in ndirectly, from directing that g privileges to Commissioner f such person, ty, should not ny decision of nay appeal to notification of amission shall
Section 74
No person shall, directly or indirectly, in connection with any transaction with any other person involving the purchase or sale of a futures contract-
(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, of that other person.
Section 75
No person shall, directly or indirectly, for the purposes of inducing the purchase or sale of a futures contract, make—
(a)
any statement which is, at the time and in the light of the circumstances in which it is made, false or misleading with respect to any material fact and which he knows or has reasonable grounds for believing is false or misleading; or
(b)
any statement which is, by reason of the omission of a material fact, rendered false or misleading and which he knows or has reasonable grounds for believing is rendered false or misleading by reason of the omission of that fact.
Section 76
(2)
Subject to subsection (4), any person who—
(a)
invites or offers to arrange for any individual to participate in a futures contract in which two or more other individuals also participate or are likely to participate; or
(b)
invites or offers to arrange for any individual to make a futures contract knowing or having reasonable cause to believe that the individual will do so on behalf or for the benefit of two or more other individuals, commits an offence and is liable on conviction to a fine not exceeding fifteen thousand ringgit or to imprisonment for a term not exceeding one year or to both.
(3)
For the purposes of subsections (1) and (2)—
(a)
an individual who makes a futures contract acts for the benefit of every individual who shares in the profit or loss on the contract; and
(b)
an individual participates in a futures contract if he shares in the profit or loss on the contract.
(4)
The Minister may, by order published in the Gazette, exempt any person or contract or class or description of person or contract from subsections (1) and (2).
Section 77
For the purposes of this Part, every dealer shall keep open at all times for inspection by the Commissioner or by any person authorized by him, books and records of all transactions and positions in any commodity traded, and inventories and purchase and sale commitments of such commodity and such books and records shall show complete details concerning all such transactions, positions, inventories and commitments including the names and addresses of all such persons having any interest therein.
Offences.
Section 78
(2)
Any person who contravenes section 70, 71, 74, 75 or 77 commits an offence and is liable on conviction to a fine not exceeding fifty thousand ringgit and to imprisonment for a term not exceeding five years.
dividual to or having individual : of two or n to a fine imprisonboth.
(2)
一
contract acts who shares and s contract e contract.
ed in the class or ections (1)
aler shall the Com-m, books is in any chase and ich books erning all commit-all such
67, 68 or tion to a it or to ear or to
0, 71, 74, conviction it and to ears.
Part IX
PART IX COMPENSATION FUND
Section 79
In this Part, unless the context otherwise requires—
"a claimant" includes, in the event of his death, insolvency or other disability, his personal representative or any other person having authority to administer his estate;
"Committee" means the Business Conduct Committee of the exchange company established under the rules of the exchange company;
"default", in addition to the interpretation given to it in section 2, includes a default arising from the bankruptcy or winding up, as the case may be, in relation to the business of trading in commodity futures contracts of the dealer;
"member" means a member of the exchange company.
Section 80
The exchange company shall establish and maintain a compensation fund, to be known as the "Compensation Fund", for the purposes set out in this Part. Establishment of Compensation Fund.
Section 81
(2)
The Committee shall be responsible to the Management Board and shall exercise on behalf of the Management Board such of the powers, duties and functions of the Management Board under this Part as may be delegated to the Committee by the Management Board.
(3)
Subject to any direction of the Management Board, the Committee may regulate its procedure in such manner as it thinks fit.
Section 82
(a)
all amounts paid to or collected by the exchange company in accordance with the provision of this Part;
(b)
all amounts recovered by or on behalf of the exchange company by the exercise of any right of action conferred by this Part;
(2)
The exchange company may borrow for the purposes of the Compensation Fund from any lender and may charge any investments acquired under section 87 by way of security for any such loan but the aggregate sum owing at any one time in respect of such loans shall not exceed five hundred thousand ringgit.
Section 83
The exchange company shall open at one or more licensed banks a separate bank account or accounts and shall, pending their application in accordance with this Part, pay into or transfer to such bank account or accounts all amounts forming part of the Compensation Fund.
Section 84
(2)
The exchange company shall appoint an auditor to audit the Compensation Fund.
(3)
The auditor so appointed shall annually audit the accounts of the Compensation Fund and shall audit and prepare an auditor's report in respect of each revenue and expenditure account and balance sheet prepared under subsection (1) and shall submit the report to the exchange company.
behalf of the se of any right section (2);
estments made aid into the orrow for the om any lender required under loan but the in respect of ired thousand t one or more t or accounts cordance with nk account or Compensation keep proper respect of each expenditure the last day nt an auditor unually audit and shall audit pect of each balance sheet 1 submit the
(4)
Not later than six months after the end of each financial year the exchange company shall cause a copy of the audited revenue and expenditure account and balance sheet to be sent to the Commission together with the auditor's report.
Section 85
(2)
The payment required under subsection (1) shall be in cash and shall not be refundable.
(3)
Any amount due from the members of the exchange company under this section may be sued for and recovered by the exchange company as a debt in a court.
Section 86
(2)
The rules shall specify the nature, amount and rate of levy and the manner of collection of the levy, provided that the determination of the rate or of any variation thereof, shall be subject to the prior approval of the Commission.
(3)
The rules may provide for an exemption of the levy or of any part thereof in respect of any commodity or of any member or class of members.
(4)
The levy or any part thereof may with the approval of the Commission, be varied, suspended or cancelled by order made and published by the Management Board.
Section 87
The exchange company may invest any money which forms part of the Compensation Fund and which is not immediately required for any other purposes provided for by this Part-
(a)
introduce any other method of financing the Compensation Fund either in substitution for or in addition to the resources referred to in section 86; or
Section 88
The Management Board may, with the approval of the Commission, by rules—
(b)
establish in lieu of the Compensation Fund, any other system of providing compensation required under this Part.
Section 89
Subject to this Part, there shall be paid out of the Compensation Fund as required and in the following order-
(a)
all legal and other expenses incurred in investigating or defending claims made under this Part, or incurred in relation to the Compensation Fund or in the exercise by the exchange company of the rights, powers and authority vested in it by this Part in relation to the Compensation Fund;
(c)
the amounts of all claims, including costs, allowed by the exchange company or established against the exchange company under this Part; and
(d)
all other amounts payable out of the Compensation Fund in accordance with this Part.
Section 90
(a)
which was entrusted to or received by the member or any director, partner or employee of the member for or on behalf of that person; and e authorized approval of inancing the institution for referred to in ation Fund, compensation d out of the he following incurred in made under ion to the rcise by the powers and in relation nistration of loss because connection tracts in any director, be, of the contract or iding costs, y or estab-pany under f the Com this Part.
ved by the or employee that person;
(b)
to which that person is entitled or in which he has a beneficial interest whether existing or contingent, he shall be entitled, subject to this Part, to claim compensation from the Compensation Fund for such pecuniary loss.
(2)
Subsection (1) does not entitle any member to make a claim against the Compensation Fund.
(3)
The exchange company shall not be obliged to consider and determine a claim against the Compensation Fund unless the person making the claim has satisfied the exchange company that he had made all efforts (other than by an action in court) to recover his loss from the member in relation to whom the claim arose or from any other person who is liable in respect of the loss.
(4)
Subject to this Part, the amount of compensation which any person is entitled to claim from the Compensation Fund is the amount of the actual pecuniary loss suffered by him, including the reasonable costs of and disbursements incidental to the making and proving of his claim, less any amount or value of money or other benefits received or receivable by him in reduction of the loss from any source other than the Compensation Fund.
(5)
In addition to any compensation payable under this Part, interest shall be payable out of the Compensation Fund on the amount of the compensation, less any amount attributable to costs and disbursements, at such rate as may be determined by the exchange company, which shall be calculated from the day on which the default was committed or believed to be committed and continue until the day on which the claim is satisfied.
Section 91
The amount that may be paid to any person, and the amount or the aggregate of the amounts that may be paid in respect of any one member as compensation under subsection (1) of section 93, shall be limited to the amounts specified in the rules of the exchange company.
(a)
if a notice under subsection (1) has been published, on or before the date specified in the notice; or
(b)
if no such notice has been published, within three months after the claimant became aware of the default giving rise to the claim, but which shall in no case exceed twelve months from the date of the default.
Section 92
(2)
Where any person wishes to claim compensation under this Part, he shall lodge his claim in writing with the exchange company—
(3)
Any claim which is not lodged within the time limited by subsection (2) shall, unless the exchange company otherwise determines, be barred.
(4)
An action for damages shall not lie against the exchange company or against any member of the Management Board by reason of any notice published for the purposes of this section in good faith and without malice.
Section 93
(2)
If the exchange company is not satisfied as to the propriety of a claim for compensation under this Part, it shall make a determination disallowing the claim or, if it is satisfied as to the propriety of a part of such a claim, it shall make a determination allowing the claim as to that part.
(3)
Where the exchange company makes a determination under subsection (1) or (2), it shall forthwith serve a notice in writing of its determination on the claimant or on his counsel and deliver a copy of the notice to the Commission.
cause to be not being earlier the notice, on tion from the relation to the compensation in writing with blished, within became aware the claim, but twelve months
(1)
has been te specified in within the time the exchange ed.
lie against the member of the notice published faith and with-satisfied that rt is a proper a determina-satisfied as to on under this isallowing the iety of a part ation allowing akes a deterhall forthwith nation on the copy of the
(4)
If the exchange company disallows, or allows partially, a claim under subsection (2), the determination of the exchange company shall specify the reasons for the disallowance or partial allowance, as the case may be.
(5)
Notwithstanding that the exchange company has made a determination allowing a claim or part of a claim under this section in respect of a default committed by any member, payment of the amount allowed from the Compensation Fund shall not be made until after the expiry of the period allowed for appeal under section 95 and where an appeal is made to the Commission in accordance with section 95 by any person against any determination by the exchange company, no payment shall be made to any claimant until after the determination of the appeal.
Section 94
(b)
for the purpose of exercising its rights against any member or against any other person; or
(c)
for the purpose of enabling criminal proceedings to be brought against any person in respect of a default which is or involves the commission of a criminal offence.
(2)
Where any claimant required to produce any futures contracts, documents or statements of evidence under subsection (1) fails to produce them, the exchange company may, if it is satisfied that the futures contracts, documents or statements of evidence are in the possession of, or available to, the claimant, refuse to allow the claimant's claim until such time as he produces them in accordance with the rules of the exchange company.
Section 95
Any person who is aggrieved by a determination made by the exchange company under section 93 may, within one month after he is notified of the determination, appeal to the Commission whose decision shall be final.
Section 96
On the exchange company making any payment out of the Compensation Fund in respect of any claim for compensation under this Part—
(a)
the exchange company shall be subrogated to the extent of that payment to all the rights and remedies of the claimant in respect of the pecuniary loss sustained by reason of the default on which the claim was based; and
(b)
the claimant shall have no right under any bankruptcy or legal proceedings or otherwise to receive in respect of the pecuniary loss any sum out of the assets of the member concerned, or where the pecuniary loss was caused by the default of a director, partner or employee, until the exchange company has been reimbursed the full amount of the payment made by it out of the Compensation Fund.
Section 97
No money or other property belonging to the exchange company, other than the Compensation Fund, shall be available for the payment of any claim for compensation under this Part.
Section 98
(2)
Where the aggregate of all claims for compensation which have been allowed under this Part in respect of the default giving rise to the claims exceeds the total amount which may be paid under this Part in respect of any member concerned in the default, that total amount shall be apportioned between the claimants in such manner as the exchange company any payment out of any claim for ight under any or otherwise to ry loss any sum r concerned, or caused by the employee, until reimbursed the de by it out of e subrogated to all the rights and respect of the on of the default and onging to the sensation Fund any claim for the Compensa-payment of the which have been at credit shall, d between the ange company hall, so far as further receipts t of the Com-oney available for compensation this Part in claims exceeds under this Part default, that between the large company
COMMODITIES TRADING thinks equitable; and on payment out of the Compensation Fund of that total amount in accordance with that apportionment—
(b)
all other claims for compensation which may subsequently arise or be made in connection with the default, shall be absolutely discharged.
Section 99
In the event of the exchange company being wound up under the Companies Act 1965 the exchange company shall, after the satisfaction of all outstanding liabilities against the Compensation Fund, make available to the liquidator of the exchange company the balance of the amount available in the Compensation Fund which shall form part of the assets of the exchange company and be available to the liquidator for distribution in accordance with the Companies Act 1965.
Part X
PART X
ENFORCEMENT AND INVESTIGATION
Section 100
For the purposes of this Part, "books" includes any register or other record of information, any accounts or accounting records, however compiled, recorded or stored and any document.
Section 101
The Commissioner may, at any time, if he considers there is sufficient reason to do so, by writing give a direction to a registered person requiring him to produce to the Commissioner or to any person authorized by the Commissioner, at such time and place as is appointed, such books as are specified in the direction being books relating to-
(a)
the business or affairs of the registered person, in so far as they relate to the business for which such a person was registered;
(c)
any advice concerning trading in commodity futures contracts or the issuing or publication of a report or analysis concerning such trading;
(d)
the character of financial position of, or any business carried on by, the registered person; or
(a)
the business or affairs of the person in so far as they relate to the business of trading in commodity futures contracts;
(e)
an audit of, or any report of an auditor concerning trading in commodity futures contracts or any accounts or records of the registered person.
Section 102
The Commissioner may, where he has reason to suspect that any person who is not a registered person is directly or indirectly carrying on the business of a registered person, by writing give a direction to such person, requiring him to produce to the Commissioner or to any person authorized by the Commissioner at such time and place as is appointed, such books as are specified in the direction being books relating to—
(c)
any advice concerning trading in commodity futures contracts or the issuing or publication of a report or analysis concerning such trading; or
Section 103
(i)
may take possession of the books and make copies of, or take extracts from, them;
(ii)
may require the other person or any person who was a party to the compilation of the books, to make a statement providing an explanation of any of the books; and ition of, or any registered person;
an auditor conutures contracts f the registered e has reason to registered person the business of a rection to such Commissioner commissioner at ch books as are relating to—
erson in so far of trading in es contracts;
in commodity or publication occurring such on of, or any cises a power of books—
rson to whom e books and extracts from, erson or any the compila a statement f any of the
(iii)
may retain possession of the books for as long as the Commissioner may consider necessary; and
(b)
if the books are not produced, the Commissioner may require the other person—
(i)
to state, to the best of his knowledge and belief, where the books may be found; or
(ii)
to identify the person who, to the best of his knowledge and belief, last had custody of the books and to state, to the best of his knowledge and belief, where that last-mentioned person may be found.
(2)
A power conferred by this section to make a requirement of a person shall in the case of a body corporate, extend to a body corporate that is in the course of being wound up, or that has been dissolved, including any person who is or has been an officer or employee of such body corporate.
Section 104
(a)
to search the premises and to break open and search any cupboard, drawer, chest, trunk, box, package or other receptacle, whether a fixture or not, in the premises; and
(b)
to take possession of, or secure against interference, any books that appear to be books the production of which was so required.
(2)
Whenever it appears to the Commissioner that there are reasonable grounds for suspecting that in any premises there are books, the production of which has been required by virtue of section 101 or 102 and which have not been produced in compliance with that requirement and that a delay in obtaining a search warrant under subsection (1) may cause evidence of the contravention to disappear or to be tampered with, the Commissioner may exercise in, upon or in respect of the premises, all the powers mentioned in the subsection in as full and ample a manner as if he were authorized to do so by warrant issued under that subsection.
(3)
A list of all things seized in the course of a search made under this Part and of the places in which they are respectively found shall be prepared by the Commissioner or other officer making the search and signed by him.
(5)
The powers conferred under subsection (1) are in addition to, and not in derogation of, any other powers conferred by law.
(4)
In this section "premises" includes any structure building, aircraft, vehicle, vessel or place.
Section 105
(2)
A person who, in purported compliance with a requisition made under subsection (1) of section 103, furnishes information or makes a statement that is false or misleading in a material particular, commits an offence and is liable on conviction to a fine not exceeding twenty-five thousand ringgit or to imprisonment for a term not exceeding two years or to both.
(3)
A person who obstructs or hinders the Commissioner or any authorized person in the exercise of any power under section 101, 102, 103 or 104 commits an offence and is liable on conviction to a fine not exceeding twenty-five thousand ringgit or to imprisonment for a term not exceeding two years or to both.
Section 106
(2)
For the purposes of carrying out investigations under this Part, the Commissioner or any officer of the Commission authorized in writing in that behalf by the Commission shall be deemed to be a police officer.
Section 107
(2)
The instrument of direction—
(b)
may require the investigation to be carried out by the Commissioner or by any person to be appointed by the Commissioner.
Section 108
(3)
Where the Commissioner receives a direction under subsection (1), he shall comply with the requirements specified in the direction and shall report to the Minister the results of his investigation.
(2)
For the purpose of this section, "bank accounts" includes the accounts maintained by a dealer in respect of his clients.
Section 109
A person who, with intent to defeat the purposes of this Act or to delay or obstruct the carrying out of an investigation under this Part—
(a)
conceals, destroys, mutilates or alters a book relating to a matter that is the subject of investigation; or
(b)
where such a book is in Malaysia, sends the book out of Malaysia, commits an offence and is liable on conviction to a fine not exceeding twenty-five thousand ringgit or to imprisonment for a term not exceeding two years or to both.
Section 110
The powers of the Commissioner under this Part may be exercisable by any officer of the Commission authorized in writing in that behalf by the Commission and by any police officer not below the rank of Inspector.
Part XI
PART XI
Financial assistance,
MISCELLANEOUS PROVISIONS
Section 111
The Minister may, with the concurrence of the Minister of Finance, provide such assistance, financial or otherwise, to the exchange company upon such terms and conditions as he thinks fit.
Section 112
Where the Management Board becomes aware of any matter which adversely affects or is likely to adversely affect the ability of a member to meet his legal obligations as a dealer, the Management Board shall report the matter to the Commissioner in writing as soon as practicable after it becomes aware of the matter.
Section 113
Every dealer, other than a director, partner or employee of a corporation or firm who is accredited to the corporation or firm as a dealer, shall notify the Commissioner in writing of the period of the financial year of that corporation or firm or any changes thereof.
eat the pur the carrying lters a book the subject of ia, sends the viction to a ringgit or to two years or der this Part Commission Commission he rank of ence of the ce, financial upon such ies aware of is likely to to meet his ment Board er in writing aware of the partner or accredited to notify the he financial ges thereof.
Section 114
(b)
take or use, or have attached to or exhibited at any place, any title which resembles the title specified in paragraph (a) or so closely resembles such title as to be calculated to deceive.
(2)
A person who is not a dealer shall not—
(b)
take or use, or have attached to or exhibited at any place, any title or description that resembles the title specified in paragraph (a) or so closely resembles such title as to be calculated to deceive.
(3)
Any person who contravenes this section commits an offence and is liable on conviction to a fine not exceeding twenty-five thousand ringgit and in the case of a continuing offence, to a further fine of two thousand five hundred ringgit for each day during which the offence continues.
Section 115
(a)
provides for remuneration to be paid by the client to the commodity trading adviser on the basis of a share of capital gains of the funds or any part of the funds of the client;
(b)
does not include a provision to the effect that an assignment of the contract by the commodity trading adviser shall be made only with the consent of the client;
(c)
does not include a provision to the effect that the commodity trading adviser—
(i)
if a corporation, will notify the client of any change in the directors of the corporation; or
(ii)
if a firm, will notify the client of any change in the partners of the firm, within a reasonable time after the change.
(2)
Paragraph (a) of subsection (1) does not prohibit a commodity trading advisory contract which provides for remuneration based on the total value of the funds of a client averaged over a definite period or on definite dates, or taken on a definite date.
(4)
Any commodity trading adviser who knowingly enters into any contract in contravention of subsection (1) commits an offence and is liable on conviction to a fine not exceeding five thousand ringgit.
(3)
For the purpose of this section, "commodity trading advisory contract" means a contract or agreement whereby a person agrees to act as a commodity trading adviser or to manage any commodity trading or trading account of a client, not being a company carrying on business as a commodity trading company and registered as such under the Companies Act 1965.
(5)
Any commodity trading advisory contract entered into in contravention of subsection (1) shall, notwithstanding anything in the contract, be voidable at the option of the client.
Section 116
(a)
on the application of the Commissioner, it appears to the High Court that a person has contravened any of the provisions of this Act, or has contravened the conditions or restrictions of a registration under this Act, the rules of the exchange company or clearing house or is about to do an act with respect to trading in commodity futures contracts that, if done, would be such as to constitute an offence or contravention; or the effect that the client of s of the cor-client of any he firm, change.
s not prohibit which provides of the funds or on definite
"commodity act or agree a commodity odity trading a company ling company ties Act 1965.
no knowingly of subsection conviction to a ntract entered hall, notwith-idable at the imissioner, it a person has s of this Act, ns or restric-Act, the rules ring house or to trading in at, if done, in offence or
(b)
on the application of the exchange company or clearing house, it appears to the High Court that a person has contravened the rules or regulations of the exchange company or clearing house, as the case may be, the Court may without prejudice to any order it would be entitled to make otherwise than pursuant to this section, make one or more of the following orders:
(i)
in the case of persistent or continuing breaches of this Act, or the conditions or restrictions of a registration under this Act, or of the rules of the exchange company or clearing house, an order restraining a person from carrying on a business of trading in commodity futures contracts, from acting as a dealer's representative, commodity trading adviser or commodity trading adviser's representative, or from holding himself out as so carrying on business or so acting;
(ii)
an order restraining a person from acquiring, disposing of or otherwise trading in commodity futures contracts that is specified in the order;
(iii)
an order restraining a person from disposing, transferring, or taking out or sending out of Malaysia, any property;
(iv)
an order appointing a receiver of property of a dealer or of property that is held by a dealer for or on behalf of another person, whether as trustee or otherwise;
(v)
an order declaring a futures contract to be void or voidable;
(vi)
an order requiring a person referred to in subparagraphs (i), (ii), (iii) and (iv) to deliver up to the Court, his passport or such other documents as the Court thinks fit or an order prohibiting that person from leaving Malaysia without the consent of the Court;
(vii)
for the purpose of securing compliance with any other order under this section, an order directing a person to do or refrain from doing a specified act;
(viii)
any ancillary order deemed to be desirable in consequence of the making of an order under any of the preceding provisions of this subsection.
(2)
Where an application is made to the High Court for an order under subsection (1), the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application.
(3)
Where the Commission makes an application to the Court for the making of an order under subsection (1), the Court shall not require the Commission, the exchange company or the clearing house as a condition of granting an interim order under subsection (2), to give any undertaking as to damages.
(4)
The Court may not make an order under subsection (1) if it is satisfied that the order would unfairly prejudice a person.
(5)
The Court may, before making an order under subsection (1), direct that notice of the application be given to such person as it thinks fit.
(6)
A person appointed by order of the Court under subsection (1) as a receiver of property of a dealer—
(a)
may require the dealer to deliver to him any property of which he has been appointed receiver or to give to him all information concerning that property that may reasonably be required;
(b)
may acquire and take possession of any property of which he has been appointed receiver;
(c)
may deal with any property that he has acquired or of which he has taken possession in any manner in which the dealer might lawfully have dealt with the property; and
(d)
shall have such other powers in respect of the property as the Court specifies in the order.
be desirable in an order under ons of this sub-the High Court Court may, if in to do so, before interim order, that is expressed ination of the n application to under subsection commission, the as a condition bsection (2), to der under subwould unfairly in order under application be the Court under of a dealer er to him any seen appointed ll information may reasonably ssion of any en appointed that he has keen possession ler might lawty; and respect of the the order.
(7)
For the purposes of subparagraphs (iii) and (iv) of subsection (1), and subsection (6), "property", in relation to a dealer, includes money or other property entrusted to or received on behalf of any other person by the dealer or another person in the course of or in connection with a business of trading in commodity futures contracts carried on by the dealer.
(8)
Any person who, without reasonable excuse, contravenes or fails to comply with—
(b)
a requirement of a receiver appointed by order of the Court under subsection (1), commits an offence and is liable on conviction to a fine of twenty-five thousand ringgit or to imprisonment for a term not exceeding two years or to both.
(9)
The Court may rescind, vary or discharge an order made by it under this section or suspend the operation of such an order.
Section 117
(2)
Subject to subsection (3), for the purposes of this section, a person is deemed to be a director of a corporation if he occupies the position of a director by whatever name he may be called or is a person in accordance with whose directions or instructions the directors of the corporation or any of them act.
(3)
A person shall not, by reason only that the directors of a corporation act on advice rendered by him in a professional capacity, be taken to be a person in accordance with whose directions or instructions those directors act.
80
Section 118
Save in accordance with the law, no person shall act in any way which adversely affects or tends to affect the reputation or goodwill of, or public confidence in the exchange, or to conduct himself in any manner as to cause a nuisance to or disruption of orderly trading in any commodity market.
Section 119
(b)
directly or indirectly make unauthorized disclosure of any confidential, financial or other information that may come into his possession as a result of his functions as an employee of the exchange company and of the clearing house.
(2)
Any person who contravenes or fails to comply with the provisions of this section commits an offence, and shall on conviction be liable to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding one year or to both.
Section 120
(a)
he acquires by virtue of his official capacity or former official capacity; and
(b)
it would be reasonable to expect a person in his official capacity or former official capacity not to disclose except for the proper performance of the functions attaching to that official capacity, shall not make improper use of such information to gain, directly or indirectly, an advantage for himself or for any other person.
no person shall or tends to affect lic confidence in any manner as orderly trading ge company or in commodity authorized disncial or other o his possession an employee of of the clearing fails to comply mits an offence, he not exceeding t for a term not ent Board or of member of any of the exchange in relation to any confidential right reasonably the price of the e company and icial capacity or ect a person in official capacity the proper per taching to that information to age for himself
(2)
Any person who contravenes or fails to comply with the provisions of this section commits an offence, and shall on conviction be liable to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding one year or to both.
Section 121
Where any corporation operates or undertakes the operation of the clearing house, all duties and obligations imposed by this Act upon, and all penalties that apply under this Act to, the clearing house are imposed upon and apply to the corporation and for this purpose references in this Act to the clearing house shall be deemed to be references to the corporation.
Section 122
For the purposes of this Act, an act, omission or failure of any employee, agent or other person acting for or on behalf of any individual, corporation or firm within the scope of his office or employment shall be deemed to be the act, omission or failure of such individual, corporation or firm, as well as of such employee, agent or other person.
Section 123
Any person who wilfully aids, abets, counsels, commands, induces, or procures the commission of, a violation of any of the provisions of this Act, or any of the regulations or orders made or issued pursuant to this Act, or who acts in combination or concert with any other person in such violation, or who wilfully causes an act to be done or omitted which if directly performed or omitted by him or another would be a violation of the provisions of this Act or such regulations or orders, commits an offence and shall be liable on conviction to suffer the same penalty as prescribed for the principal offender.
Section 124
Any dispute arising out of the business of futures trading in a commodity market-
(d)
between clients and members of the exchange company, shall not be taken to court unless all the facilities for the settlement thereof as provided under the rules of the exchange company and the regulations of the clearing house or under this Act, have been exhausted.
Section 125
Any person guilty of an offence against this Act for which no penalty is provided is liable on conviction-
(a)
to a fine not exceeding ten thousand ringgit or to imprisonment for a term not exceeding six months, or to both;
(b)
where the offence continues after the person has been convicted thereof, to a fine not exceeding one-fifth of the maximum fine to which that person was liable on the earlier conviction for each day during which the offence continues.
Protection against legal proceedings.
Section 126
The members of the Commission, the Commissioner, the Deputy Commissioner and all officers and servants of the Commission shall be deemed to be public servants for the purposes of the Penal Code.
Section 127
A member of the Commission, the Commissioner, the Deputy Commissioner or any officer or servant of the Commission shall not incur personal liability for any loss or damage caused to any person by reason of any act or omission or statement made in pursuance of execution or intended execution of their functions under this Act, unless the act, omission or statement was made mala fide or through recklessness or gross negligence.
Prosecution of offences.
Section 128
Without prejudice to the provisions of any other law relating to the prosecution of criminal offences and without prejudice to the powers of the Public Prosecutor in relation to the prosecution of such offences, the Commissioner or any officer of the Commission authorized in writing by the Commission, may institute and conduct proceedings in respect of any offence against this Act.
of the exchange the facilities for der the rules ofulations of the been exhausted.
against this Act liable on con-usand ringgit or not exceeding six after the person a fine not exam fine to which earlier conviction fence continues.
Section 1
the Commisall officers and deemed to be Penal Code.
Commissioner or servant of liability for any reason of any pursuance of functions under ment was made less negligence.
ns of any other criminal offences of the Publication of such officer of the Commission, a respect of any
Section 129
(a)
if the defendant is a natural person, require any person who is or was a partner, employee or agent of the defendant; or
(b)
if the defendant is a body corporate, require any person who is or was an officer, employee or agent of the defendant, to assist in the prosecution, and the person who is so required shall give all assistance in connection with the prosecution that person is reasonably able to give.
(2)
The Commissioner or such other authorized person shall not make such a requirement as is mentioned in subsection (1) of a person who, in the opinion of the Commissioner or such other authorized person, is or is likely to be a defendant in the proceedings or is or has been a duly qualified legal practitioner acting for such a person.
(3)
If a person to whom paragraph (a) or (b) of subsection (1) relates, fails to give assistance as required by that subsection, he is guilty of an offence and, without affecting any penalty to which he may be liable for the offence, the court may, on the application of the Commissioner or such other authorized person, order that person to comply with the requirement within such time, and in such manner, as the court orders.
(4)
In this section, "agent", in relation to the defendant, includes a banker of the defendant and a person engaged as an auditor by the defendant, whether that person is an employee or an officer of the defendant or not.
Section 130
Notwithstanding the provision of any written law to the contrary, a Sessions Court shall have jurisdiction to try any offence under this Act or any regulations or rules made thereunder and to award the full punishment for the offence.
Section 131
(a)
if such person pays such amount to the Commissioner within fourteen days after the demand, proceedings shall not be taken against him in relation to the offence; or
(b)
if such person does not pay the amount so demanded within fourteen days, the Commissioner may cause proceedings to be instituted in relation to the offence.
(2)
All monies received by the Commissioner in the exercise of his power under subsection (1) shall be paid into the Federal Consolidated Fund.
Section 132
(a)
the applications for registration or renewal of registration as registered persons and matters incidental thereto;
(b)
prescribing the fees to be paid for registration or renewal of registration as registered persons;
(c)
prescribing the appropriate standards with respect to the qualifications, experience and training of applicants for registration as registered persons;
(d)
providing for the examination of applicants as registered persons;
ny written lawive jurisdiction regulations or the full punish-out instituting offence under other than 63 (1), 70, 71, 16 compound from such prescribed by tte subject tocribed therein to the Coms after the taken against e amount so the Commisbe instituted sioner in the shall be paid ion with the letter carrying Act, and in erality of the matters:
renewal of and matters registration red persons; standards with experience and stration as plicants as
(e)
providing for the exemption of such applicants from taking examinations subject to such terms and conditions as may be prescribed;
(f)
prescribing the particulars to be recorded in registers kept under this Act and the inspection of such registers;
(g)
empowering the Commissioner to correct any errors in any register kept under this Act;
(h)
empowering the Commissioner, on payment of the prescribed fee, to issue duplicate certificates of registration in the event of loss or destruction of the original certificates of registration or duplicate certificates of registration;
(i)
requiring dealers and commodity trading advisers to exhibit their certificates of registration at their places of business;
(k)
prescribing the particulars to be recorded in, or in respect of, accounts kept by dealers under this Act;
(1)
prescribing the particulars to be recorded in the profit and loss accounts and balance sheets and the information to be contained in auditor's reports required to be lodged under this Act on the annual accounts of dealers;
(n)
providing for the remuneration of an auditor appointed under this Act and for the costs of an audit carried out under this Act;
(2)
Regulations made under this section may provide that a contravention of specified provisions thereof shall be an offence and may provide penalties of a fine not exceeding five thousand ringgit or imprisonment for a term not exceeding one year or both.
86
(3)
The Commission may, with the approval of the Minister, make rules for all or any of the following purposes:
(b)
to prescribe the schemes and terms of service including the conduct and discipline of its employees;
(c)
to prescribe the terms and conditions of loans that may be made to its employees pursuant to subsection (3) of section 9;
(e)
to provide for the custody of the property of the Commission and the custody and use of the common seal of the Commission;
(f)
to provide for the procedure in respect of appeals to the Commission under this Act and for the hearing and determination thereof; and
(g)
to provide for such other matters as may be necessary or expedient for the administration of the affairs of the Commission or of any committee appointed under section 5.
Part XII
PART XII
REPEAL, SAVING AND TRANSITIONAL PROVISIONS
Section 134
All regulations, instructions, orders and decisions made under or in accordance with the repealed Act shall remain valid and binding and shall be deemed to have been made under the provisions of this Act until they are amended or repealed or until the date upon which they expire.
Section 133
The Commodities Trading Act 1980 (hereinafter referred to as the "repealed Act") is hereby repealed.
Section 135
Subject to the provision of this Act, all powers, rights, privileges, duties, liabilities or obligations which immediately before the coming into operation of this Act were those of the Commodities Trading Council (hereinafter referred to as the "Council") or of the Commissioner, shall as from that day, continue to be those of the Commission or of the Commissioner respectively.
proval of the the following actions of its ms of service bipline of its tions of loans yees pursuant lures for the property of and use of ion;
n respect of this Act and thereof; and s as may be administration n or of any 15.
ROVISIONS
(hereinafter by repealed.
nd decisions repealed Act be deemed of this Act until the date all powers, tions which tion of this ing Council or of the stinue to be mmissioner
87
Section 136
(2)
Subject to the provisions of this Act, any proceedings, whether civil or criminal, or cause of action pending or existing immediately before the coming into operation of this Act by or against the Council or Commissioner or any person acting on behalf of the Council or Commissioner may be continued or instituted by or against the Commission or the Commissioner as it might have been by or against the Council or Commissioner or such person if this Act had not been passed.
(3)
Any appeal brought or any leave to appeal applied on or after the appointed day against a decision given in any legal proceedings before that day may be brought by or against the Commission.
Section 137
Subject to the provisions of this Act, any right, privilege, obligation or liability acquired, accrued or incurred under the repealed Act and any legal proceedings or remedy in respect of such right, privilege, obligation or liability shall not be affected and any such legal proceedings or remedy may be instituted, continued or enforced as if this Act had not been made.
Section 138
The Kuala Lumpur Commodity Exchange approved and established pursuant to section 10 of the repealed Act shall continue in being as if approved and established pursuant to the provision of this Act.
Section 139
Every person including the Commissioner and the Deputy Commissioner who, immediately before the appointed day, was seconded by the Government to serve the Council as an officer or servant in the Secretariat of the Council, may on that day be employed as an officer or servant, as the case may be, of the Commission pursuant to subsection (2) of section 9 of this Act, upon terms and conditions not less favourable than those obtaining immediately before the appointed day, unless the officer or servant elects to return to the service of the Government.
Section 140
(2)
For the avoidance of doubt it is declared that subsection (1) does not authorize the appointment of members, officers or servants of the Commission except in so far as to authorize the temporary appointment of such persons until proper appointments are made under this Act.
Section 141
(2)
The Minister shall not exercise the power conferred by subsection (1) after the expiration of two years from the appointed day.
Schedule
(Section 3 (8))
1. A member of the Commission who—
(a)
has failed to be present at three consecutive meetings of the Commission without reasonable cause or the permission in writing of the Chairman;
(b)
has been found or declared to be of unsound mind;
(c)
has become bankrupt or made an arrangement with his creditors; or f the Commis- 9 of this Act, vourable than appointed day, return to the ny person in Act and any all be deemed provided that tent with the and all rights result of the expenditure ed to be the leclared that pointment of mission except pointment of made under ion with the s Part, the on (2), make o him to be power con ion of two meetings of or the per-
(d)
has been convicted of any offence involving fraud, dishonesty or moral turpitude, or any offence under this Act or any regulation made thereunder, shall cease to hold office.
(b)
The Commission shall also meet—
(i)
at the request of the Chairman; or
2. (a) The Commission shall meet in regular sessions at least once every three months.
(ii)
at the request of any of the members referred to under paragraph (b), (c) or (d) of subsection (2) of section 3; or
(iii)
at the written request of any five members of the Commission.
3. (a) The date for a meeting of the Commission convened pursuant to subparagraph (b) of paragraph 2 shall be determined by the Chairman and in his absence by the member appointed to act as Chairman under subsection (4) of section 3.
(b)
Unless otherwise decided by the Commission, all meetings of the Commission shall be held at the office of the Commission.
(c)
Meetings of the Commission shall be convened by the Commissioner who shall, except in cases of urgency, give at least fourteen days' notice of the meeting and of the business to be transacted at the meeting.
4. (a) At all meetings of the Commission, five members shall form a quorum.
(b)
At any meeting of the Commission, the Chairman shall have a deliberative vote and in the case of an equality of vote, shall also have a casting vote.
(c)
Subject to the provisions in this Schedule, the procedure for meetings of the Commission shall be determined by the Commission and for that purpose it may make standing orders.
Common questions
- What is AKTA DAGANGAN KOMODITI 1985?
- COMMODITIES TRADING ACT 1985 is Malaysia Act, cited as Act 324 1985, currently marked repealed and first recorded in 1985.
- Is AKTA DAGANGAN KOMODITI 1985 still in force?
- No — AKTA DAGANGAN KOMODITI 1985 has been repealed.
- When did AKTA DAGANGAN KOMODITI 1985 take effect?
- AKTA DAGANGAN KOMODITI 1985 was first recorded in 1985.
- How many sections does AKTA DAGANGAN KOMODITI 1985 have?
- AKTA DAGANGAN KOMODITI 1985 contains 142 sections.
- Where can I read the official version of AKTA DAGANGAN KOMODITI 1985?
- The official text of AKTA DAGANGAN KOMODITI 1985 is published at lom.agc.gov.my.