THE CORPORATIONS LAW

CHAPTER 8 - THE FUTURES INDUSTRY

PART 8.4 - CONDUCT OF FUTURES BUSINESS

SECTION 1208   DEALINGS BY FUTURES BROKER ON OWN ACCOUNT  

1208(1)  [Broker to keep separate records]  

A futures broker shall maintain separately from other records such records as correctly record and explain dealings in futures contracts by the broker on the broker's own account including, but not limited to, records specifying:

(a)  a description of each of those dealings together with the date on which and the time at which:

(i) the instructions (if any) for each of those dealings were received by the futures broker;

(ii) the instructions (if any) for each of those dealings were transmitted to the futures market on which the dealing was effected; and

(iii) the dealing was effected; and

(b)  the source of the funds used for effecting those dealings.

1208(2)  [Compliance]  

A futures broker shall be deemed not to have maintained records in compliance with subsection (1) unless the entries in the records are made in writing in the English language or are made in such a manner as will enable them to be readily accessible and to be readily converted into writing in the English language.

1208(3)  [Broker not to take other side of client's order]  

A futures broker shall not knowingly take the other side of an order of a client of the broker in relation to a futures contract unless:

(a)  the client has consented to the broker taking the other side of the order in relation to that futures contract; or

(b)  in dealing in that futures contract on behalf of the client, the broker is to be taken, for the purposes of this Law, to be dealing in that futures contract on the broker's own account.

1208(4)  [Meaning of taking other side of order]  

For the purposes of subsection (3), a futures broker takes the other side of an order of a client of the broker in relation to a futures contract where the broker:

(a)  when dealing on the broker's own account, assumes a bought position or sold position in relation to the contract; and

(b)  when dealing on the instructions of the client, assumes the opposite sold position or bought position in relation to the contract.