(1) In this section, a reference to the transmission by a futures broker of
instructions to deal in a class of futures contracts is a reference:
- (a)
- where the broker has direct access to the futures market on which the
instructions are to be executed—to the transmission of the instructions
to that futures market; or
- (b)
- where the broker has access to the futures market on which the
instructions are to be executed only through another futures broker—to
the transmission of the instructions to that other futures broker.
(2) Subject to subsection (3), a futures broker must transmit in the
sequence in which they are received by the broker all instructions to deal in
a class of futures contracts at or near the market price for a
futures contract of that class prevailing immediately before execution of the
instructions.
(3) Where a futures broker proposes to deal in a class of futures contracts on
the broker's own account and the person by whom or on whose instructions the
instructions for the dealing are to be transmitted is aware of instructions of
a client of the broker to deal in that class of futures contracts at or near
the market price for a futures contract of that class prevailing at that time
(being instructions that have not been transmitted), that person must not
transmit, and must not give instructions to any other person to transmit, the
instructions to give effect to the proposal of the broker to deal in that
class of futures contracts before the instructions of the client are
transmitted.
(4) A futures broker, or a director, partner, officer or employee of a futures
broker, must not, except:
- (a)
- to the extent necessary to execute the
instructions concerned; or
- (b)
- as required by this Act or any other law; or
- (c)
- as required by the business rules of a futures organisation of which the
broker is a member;
disclose to any other futures broker, or to a person engaged or employed in
the business of the first-mentioned broker or of any other futures broker,
instructions of a client to deal in a class of futures contracts.
(5) A member of a futures exchange who is concerned in the execution, on a
trading floor of the futures exchange, of instructions to deal in futures
contracts must execute in the order in which they are received by the member
all instructions to deal in a class of futures contracts at or near the market
price for a futures contract of that class prevailing immediately before
execution of the instructions.
(6) Where:
- (a)
- during a particular period, a futures broker transmits
instructions (whether or not those instructions consist of, or include,
instructions giving effect to a proposal of the broker to deal in the class of
contracts concerned on the broker's own account) to deal in a class of
futures contracts at or near the market price for a futures contract of that
class prevailing immediately before execution of the instructions; and
- (b)
- dealings in that class of futures contracts are effected pursuant to those
instructions;
the broker must, except so far as the business rules of a futures organisation
of which the broker is a member otherwise provide, allocate the dealings to
those instructions:
- (c)
- in the sequence in which the dealings were effected; and
- (d)
- in the sequence in which the broker transmitted those instructions.
(7) A futures broker must maintain, in accordance with the regulations,
records that set out the prescribed particulars of:
- (a)
- instructions by a
client to deal in futures contracts; and
- (b)
- the date and time of receipt, transmission and execution of those
instructions; and
- (c)
- the person by whom those instructions are received, the person by whom
they are transmitted and the person by whom they are executed; and
- (d)
- the date and time of receipt, transmission and execution of instructions
to deal in futures contracts on the broker's own account; and
- (e)
- the person by whom instructions of the kind referred to in
paragraph (d) are received, the person by whom they are transmitted and
the person by whom they are executed;
and must retain those records for the prescribed period.
(8) Where:
- (a)
- a futures broker transmits for execution on a futures market
outside Australia and the external Territories instructions to deal in futures
contracts; and
- (b)
- it is not reasonably practicable for the broker to set out in the records
maintained by the broker pursuant to subsection (7) the prescribed
particulars of the date and time of execution of those instructions;
the broker must so set out those particulars as precisely as is reasonably
practicable.
Commonwealth Numbered Acts