Commonwealth Numbered Acts

CORPORATIONS ACT 1989 No. 109 of 1989 - SECT 846

846. (1) Subject to this section and the regulations, a person shall not sell
eligible securities to a buyer unless, at the time of the sale:

   (a)  the person has or, where the person is selling as agent, the person's
        principal has; or

   (b)  the person believes on reasonable grounds that the person has, or
        where the person is selling as agent, the person's principal has; a
        presently exercisable and unconditional right to vest the securities
        in the buyer.

(2) For the purposes of subsection (1):

   (a)  a person who, at a particular time, has a presently exercisable and
        unconditional right to have securities vested in the person or in
        accordance with the directions of the person has at that time a
        presently exercisable and unconditional right to vest the securities
        in another person; and

   (b)  a right of a person to vest securities in another person is not
        conditional merely because the securities are charged or pledged in
        favour of another person to secure the repayment of money.

(3) Subsection (1) does not apply in relation to:

   (a)  a sale of securities by the holder of a dealers licence who is a
        member of a securities exchange and specialises in transactions
        relating to odd lots of securities, being a sale made by the holder as
        principal solely for the purpose of:

        (i)    accepting an offer to buy an odd lot of securities; or

        (ii)   disposing of a parcel of securities that is less than one
               marketable parcel of securities by means of a sale of one
               marketable parcel of those securities;

   (b)  a sale of securities as part of an arbitrage transaction;

   (c)  a sale of securities by a person who before the time of sale has
        entered into a contract to buy those securities and who has a right to
        have those securities vested in the person that is conditional only
        upon all or any of the following:

        (i)    payment of the consideration in respect of the purchase;

        (ii)   the receipt by the person of a proper instrument of transfer in
               respect of the securities;

        (iii)  the receipt by the person of the documents that are, or are
               documents of title to, the securities;

   (d)  a sale of securities where:

        (i)    the person who sold the securities is not an associate of the
               body corporate that issued or made available the securities;

        (ii)   arrangements are made before the time of the sale that will
               enable delivery of securities of the class sold to be made to
               the buyer within 3 business days after the date of the
               transaction effecting the sale; and

        (iii)  if the sale is made on the stock market of a securities
               exchange:

                (A)  the price per unit in respect of the sale is not below
                     the price at which the immediately preceding ordinary
                     sale was effected; and

                (B)  the price per unit is above the price at which the
                     immediately preceding ordinary sale was made unless the
                     price at which the immediately preceding ordinary sale
                     was made was higher than the next preceding different
                     price at which an ordinary sale had been made;
and the securities exchange is informed as soon as practicable that the sale
has been made short in accordance with this subparagraph; or

   (e)  a sale of securities where:

        (i)    the securities are included in a class of securities in
               relation to which there is in force a declaration, made by the
               board of a securities exchange as provided by the business
               rules of the securities exchange, to the effect that the class
               is a class of securities to which this paragraph applies;

        (ii)   the sale is made as provided by the business rules of the
               securities exchange; and

        (iii)  at the time of the sale, neither the person who sold the
               securities, nor any person on behalf of whom the
               first-mentioned person sold the securities, was an associate,
               in relation to the sale, of the body corporate that issued or
               made available the securities.

(4) A person who requests a holder of a dealers licence to make a sale of
securities that would contravene subsection (1) but for paragraph (3) (b), (d)
or (e) shall, when making the request, inform the holder of the licence that
the sale is a short sale.

(5) A person who, on a stock market of a securities exchange, makes, whether
as principal or agent, a sale of securities that would contravene subsection
(1) but for paragraph (3)(d) shall endorse on any document evidencing the sale
that is given to the person who, whether as principal or agent, buys the
securities a statement that the sale was a short sale.

(6) For the purposes of this section, a person who:

   (a)  purports to sell securities;

   (b)  offers to sell securities;

   (c)  holds himself, herself or itself out as entitled to sell securities;
        or

   (d)  instructs a dealer to sell securities; shall be deemed to sell the
        securities.