CHAPTER
363
SECURITIES INDUSTRY |
ARRANGEMENT OF
SECTIONS |
SECTION |
PART I
PRELIMINARY |
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PART I
SECURITIES COMMISSION |
Establishment of Commission. |
Functions of the Commission. |
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Funds and resources of the Commission. |
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Advances and guarantee of borrowings. |
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Balancing of revenue account and surplus
revenue. |
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Appointment of secretary. |
Appointment of Executive Director. |
PART III
REGULATION OF SECURITIES EXCHANGES AND MARKET PARTICIPANTS |
Registration of Securities Exchanges. |
Recognition of foreign securities exchanges. |
Trading in listed securities restricted to a
Securities Exchange. |
Clearing and settlement, depository and custody
facilities. |
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Application for registration as a broker-dealer. |
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At least one director must be stockbroker. |
Alteration of Memorandum and Articles of a
broker-dealer. |
Notice to the Commission. |
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Stockbroker, etc., registration and associated
person approval. |
PART IV
REGULATORY AUTHORITY OF THE COMMISSION |
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Delegated regulatory authority. |
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Compliance with decisions of the Commission. |
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Applicability of the Companies Act. |
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PART V
FINANCIAL REQUIREMENTS:
BROKER-DEALERS |
Minimum capital requirements. |
Records and books of accounts. |
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Withdrawals from trust account. |
Claims and liens not affected. |
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PART VI
THE ISSUE OF SECURITIES TO THE PUBLIC:
PROSPECTUS |
No issue to public without an approved
prospectus. |
Expert's consent to issue of prospectus
containing statement by him. |
Registration of prospectus. |
Civil liability for mis-statements in a
prospectus. |
Criminal liability for misstatements. |
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Interpretation of prospectuses. |
Application of sections 54 to 60. |
Definition of private company. |
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PART VII
REPORTING REQUIREMENTS |
Company to file material change with Commission. |
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PART VIII
CONDUCT OF SECURITY BUSINESS |
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Beneficial ownership of listed securities. |
Broker-dealer may act in dual capacity. |
Prohibition of false markets. |
Market rigging transactions. |
Inducement to purchase or sell securities by
circulation of information. |
Employment of deceptive devices. |
Prohibition of use of confidential information. |
Insider trading definitions. |
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Limitation and application. |
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Offences under Part VIII. |
PART IX
INTEREST IN SECURITIES OF PUBLIC AND LISTED COMPANIES |
Notification of acquisition and change of
interest. |
Notification of interest of directors' officers
or substantial share-holders. |
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Extension to spouses and children. |
Register of interests of directors, officers and
substantial share-holders. |
Obligation to notify listed company of
acquisition of substantial shareholding. |
Register of interest in voting shares. |
Disclosure or beneficial interest in share
capital. |
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PART X
MISCELLANEOUS |
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SCHEDULE - The Commission, its Members and its Staff. |
CHAPTER 363 |
SECURITIES
INDUSTRY |
An Act to
provide for the establishment of a Securities Commission, to provide for the
regulation of securities exchanges and the securities industry and for
connected purposes. | 1 of 1999
13 of 2001 |
[Assent 16th
February, 1999]
[Commencement 1st May, 1999] |
PART I
PRELIMINARY |
1. This Act may be cited as the Securities Industry
Act, 1999. | Short title. |
2. (1) In this Act- | Interpretation. |
"associated
person" means any employee of a broker-dealer or of a facility regulated
by the Commission who meets the requirements set forth in section 29(2); |
"bank"
means any institution licensed under the Banks and Trust Companies
Regulation Act whether as a bank or a trust company or both; |
"the Board"
means the Board of Directors of a Securities Exchange registered by the
Commission under this Act; |
"broker"
or "stockbroker" means a person employed by a broker-dealer or the
broke-dealer itself who or which offers to provide or provides securities investment
advice to the public including institutions for a fee or other reward, or
trades or supervises any of the aforementioned activities and is registered as
such by a Securities Exchange or the Commission, as the case may be, for the
purposes under any regulations and rules made pursuant to this Act; |
"broker-dealer"
means a person providing the services of- |
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(b) a
dealer; or |
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"the
Commission" means the Securities Commission of The Bahamas established by
section 3; |
"company"
includes a body corporate, or other incorporated organisation, wherever
incorporated; |
"contract
note" means the trade confirmation required to be made and issued under
section 78; |
"day"
includes every day other than a Saturday, a Sunday or a public holiday; |
"dealer"
means a person employed by a broker-dealer or the broker-dealer itself who or
which trades on a Securities Exchange for the account of or on behalf of such
broker-dealer or deals in securities and who or which is registered as such by
a Securities Exchange or the Commission, as the case may be, for that purpose
under any regulations and rules made pursuant to this Act; |
"dealing in
securities" means, whether as principal or agent- |
(a) acquiring,
disposing of, subscribing for or underwriting, securities; or |
(b) making or
offering to make with any person, or inducing or attempting to induce any
person to enter into or to offer to enter into- |
(i) any
agreement for or with a view to acquiring, disposing of, subscribing for, or
underwriting securities, or |
(ii) any
agreement, the purpose of which is to secure a profit to any of the parties
from the yield of securities or by reference to fluctuations in the value of
securities; |
"Executive
Director" means the person appointed pursuant to section 16; |
"facility"
means a company registered pursuant to section 20; |
"issuer"
means a company, corporation, trust, partnership, limited liability
partnership, association, joint venture, syndicate or other entity which issues
its own security or securities; |
"licence"
means a licence granted by the Commission or a Securities Exchange to a person
regulated under this Act; |
"listed
company" means a public company whose securities are listed and quoted on
a Securities Exchange and "listed security" shall bear a like
meaning; |
"material
change" when used in relation to the affairs of an issuer, means a change
in the ownership, operations or capital of the issuer that would reasonably be
expected to have a significant effect on the market price or value of any of
the securities of the issuer and includes a decision to implement such a change
made by the board of directors or by senior management of the issuer who
believe that confirmation of the decision by the board of directors is
probable; |
"Minister"
means the Minister of Finance; |
"official
register" means the register required by section 28 to be maintained by a
Securities Exchange; |
"private
company" has the meaning assigned to it by section 62; |
"promoter"
means a person who acting alone or in conjunction with one or more other
persons, procures the formation or establishment of an entity whose shares or
other securities are offered for sale to the public, or is a party to the
offering of securities by an issuer but does not include any person only by
reason of his acting in a professional capacity for persons engaged in
procuring the formation of an entity the securities of which are offered for
sale or are sold to the public; |
"prospectus"
means prospectus, notice, circular, advertisement or other communication or
invitation, offering to the public for subscription or purchase any securities; |
"public
company" means a company which does not conform to the definition of a
private company contained in section 62; |
"recognized
foreign securities exchange" means any securities exchange specified by
the Commission pursuant to section 18; |
"repealed
Act" means the Securities Board Act, 1995 repealed by section 98 of this
Act; |
"Securities
Exchange" means a company operating in a market or other place in The
Bahamas at or on which securities are offered for sale, purchase or exchange
and which is registered by the Commission in accordance with this Act; |
"securities
exchange transaction" means a sale and purchase of securities in which
each of the parties is a broker-dealer or trader acting in the ordinary course
of business as such, or is acting through the agency of such a broker-dealer or
dealer or trader; |
"securities
investment advisor" shall include any of the following if the said
services are performed for a fee or other reward- |
(a) "investment
advisor" that is, a person or persons who advises others as to the
investing in or the selling of securities or who are primarily engaged in
giving advice regarding the investment of funds; |
(b) "portfolio
manager" that is, a person or persons who manage securities portfolios for
clients on a discretionary or non-discretionary basis with regard to
investments therein; |
"securities
market" means any organisation, association or group of persons whether
incorporated or unincorporated which constitutes, maintains or provides a market
place or facilities for bringing together buyers and sellers of securities,
including an automated or linked quotation or transaction system in securities
or which otherwise provides or performs with respect to securities the
functions commonly performed by a securities market and includes any market
place and the market facilities maintained by such market; |
"security"
or "securities" has the meaning assigned to it in subsection (2); |
"substantial
shareholder" means a person who- |
(a) exercises
beneficial ownership of ten per cent or more of the issued and outstanding
share capital of a company; |
(b) is entitled
to exercise or control in the future any options, rights, warrants or any other
interest of a company which amounts to beneficial ownership of ten per cent or
more of the issued outstanding share capital of a company; or |
(c) exercises
direct or indirect control over the management or affairs of a company, |
and
"substantial shareholding" shall have a like meaning; |
"trade"
or "trading" includes- |
(a) any sale or
disposition of or other dealing or any solicitation in respect of a security
for valuable consideration, whether the terms of payment be on margin,
instalment or otherwise or any attempt to do any of the foregoing; |
(b) any
participation as a trader in any transaction in a security occurring upon a
Securities Exchange; |
(c) any receipt
by a broker-dealer of an order to buy or sell a security which is executed; |
"trader"
means any person registered as such by a Securities Exchange and employed by a
broker-dealer which trades or deals in securities; |
"trading
day" means any day when trading is authorized by a Securities Exchange; |
"underwriter"
means a person who as principal agrees to purchase securities with a view to
distribution or who as agent offers for sale or sells securities in connection
with a distribution and includes a person who has a direct or indirect
participation in any such distribution, but does not include- |
(a) a person
whose interest in the transaction is limited to receiving the usual and
customary distributor's or seller's commission payable by an underwriter or
issuer; |
(b) a mutual
fund that under the laws of the jurisdiction to which it is subject purchases
its shares and resells them; |
(c) a company
that under the laws of the jurisdiction to which it is subject purchases its
shares and resells them. |
(2) For the
purposes of this Act, "security" or "securities" means any
share, stock, debenture, loan stock, fund, bond, or note issued by any person
or body, whether incorporated or unincorporated, or of any government or local
government authority, or government agency, or quasi-government agency, or
foreign government agency, or foreign quasi-government agency, or international
governmental organization, and includes, but is not limited to- |
(a) an
obligation secured by a mortgage and its derivatives; |
(b) an
obligation secured by an asset and its derivatives; |
(c) rights;
options, futures, contracts or other interest (whether described as units or
otherwise) in or in respect of any of the securities hereinbefore mentioned in
this subsection; |
(d) certificates
of interest or participation in, or temporary or interim certificates for,
receipts for, or warrants to subscribe to or purchase, any of the foregoing; |
(e) derivatives
including options, futures, contracts or other rights with respect to
commodities, currencies, indices or other tangible or intangible personal
property or rights therein, |
but does not
include- |
(i) any
securities of any company which is a private company and which has not taken
steps to become a public company; |
(ii) any
interest arising under a partnership agreement or proposed partnership
agreement (other than an agreement creating a limited partnership), unless the
agreement or proposed agreement relates to an undertaking, scheme, enterprise,
or investment contract promoted by or on behalf of a person whose ordinary
business is or includes the promotion of similar undertakings, schemes, enterprises,
or investment contracts, whether or not that person is, or is to become a party
to the agreement or proposed agreement, or unless the agreement is or would be
an agreement, or is or would be within a class of agreements, prescribed by
regulations for the purpose of this subsection; |
(iii) any
negotiable receipt or other negotiable certificate or document evidencing the
deposit of a sum of money, or any rights, or interest arising under any such
receipt, certificate, or document; |
(iv) any bill
of exchange and any promissory note within the meaning of the Bills of Exchange Act; |
(v) any
debenture that specifically provides that it is not negotiable or transferable; |
(vi) bank
contracts for spot or forward foreign exchange transactions in currencies,
excluding currency options. |
(3)
Notwithstanding subsection (2), the Commission shall have the authority to
designate or to exempt any financial instrument from the definition of a
security under this Act. |
PART II
SECURITIES COMMISSION |
3. (1) The body corporate established under section 3
of the repealed Act and known as the Securities Board is preserved and shall
continue in existence by virtue of and for the purposes of this Act but shall
be known after the commencement of this section as the Securities Commission of
The Bahamas. | Establishment of Commission. |
(2) The
Schedule shall have effect with respect to the Commission, its members and
staff. |
4. (1) The functions of the Commission shall be- | Functions of the Commission. |
(a) to
formulate principles to regulate and govern mutual funds, securities and
capital markets; |
(b) to maintain
surveillance over mutual funds, securities and capital markets ensuring
orderly, fair and equitable dealings; |
(c) to create
and promote conditions to ensure the orderly growth and development of the
capital markets; |
(d) to advise
the Minister generally regarding mutual funds, securities and capital markets;
and |
(e) to do such
other things as may be prescribed by this Act or by any other written law. |
(2) The Commission
shall have power to do anything which is calculated to facilitate or is
incidental or conducive to the proper discharge of its functions under
subsection (1). |
(3)
In the exercise of its functions under this Act the Commission shall satisfy
itself that the provisions of the Financial Transactions Reporting
Act, 2000 are being complied with. |
5. (1) The Minister may give the Commission directions
in writing for the discharge of its functions and the Commission shall give
effect to such directions. | Powers of Minister. |
(2) The Commission
shall furnish the Minister with any returns, accounts and other information as
he may from time to time require with respect to the property and activities of
the Commission and shall afford to him facilities for verifying the information
in any manner and at such time as he may reasonably require. |
6. The funds and resources of the Commission shall
consist of- | Funds and resources of the Commission. |
(a) any moneys
as from time to time are provided by Parliament; |
(b) any moneys
as from time to time may accrue to the Commission from its operations; |
(c) any moneys
as from time to time are borrowed by the Commission pursuant to section 7; |
(d) any moneys
as from time to time are advanced to the Commission pursuant to section 8; |
(e) any moneys
or other property as from time to time may in any manner be lawfully paid to or
vested in the Commission whether or not in respect of any matter incidental to
its functions. |
7. (1) Subject to this section, the Commission may
borrow sums required by it for meeting any of its obligations or discharging
any of its functions and may in respect of any borrowing, issue debentures in
such forms as the Commission may determine. | Borrowing powers. |
(2) Any borrowing
of the Commission pursuant to subsection (1) shall be subject to the approval
of the Minister as to the amount to be borrowed, the source of the borrowing
and the terms on which the borrowing may be effected. |
(3) An approval
given for the purposes of this section may be either general or limited to a
particular borrowing or otherwise and may be either unconditional or subject to
conditions. |
8. (1) Subject to subsection (3), the Minister may at
the request of the Commission make advances to the Commission for the purposes
of enabling the Commission to defray expenditure properly chargeable to its
capital account, including provision of working capital. | Advances and guarantee of borrowings. |
(2) Subject to
subsection (3), the Minister may at the request of the Commission guarantee, in
any such manner and on any such conditions as he thinks fit, the repayment of
the principal of, and the payment of interest and other charges on, any
authorised borrowings of the Commission made under section 7. |
(3) No guarantees
shall be given under this section unless prior approval thereof has been
signified by the House of Assembly in accordance with section 17 of the
Financial Administration and Audit Act. |
(4) Where any sum
is paid pursuant to a guarantee given under this section, the Minister shall as
soon as practicable after the end of each financial year beginning with that in
which the sum is issued and ending with that in which all liability in respect
of the principal of the sum and in respect of interest thereof is finally
discharged, lay before the House of Assembly a statement relating to that sum. |
(5) Any sums
required by the Minister for making, advancing and discharging any guarantees
under this section shall be charged on and issued out of the Consolidated Fund. |
(6) In this
section and in this Part "financial year" means the period of twelve
months beginning on 1st January in any year. |
9. (1) The Commission shall make to the Minister at
such times and in such manner as the Minister may direct, payments on any
amount as may be so directed in or towards repayment of any sums issued in
fulfilment of any guarantee given under section 8 and payments of interest on
what is outstanding for the time being in respect of any sums so issued at such
rate as the Minister may direct, and different rates of interest may be
directed as respects different periods. | Repayment of interest. |
(2) The Minister
shall lay before the House of Assembly a statement of any payment due from the
Commission under subsection (1) that is not duly paid to him as required
thereunder. |
10. (1) Subject to subsection (2), any moneys standing
to the credit of the Commission and not required for any current purpose (in
this section referred to as "surplus funds") may from time to time
either be carried to any reserve fund established under section 11 or be
invested by the Commission in securities approved by the Minister; and the
Commission may from time to time, with the approval of the Minister, sell any
or all of such securities. | Surplus funds. |
(2) No surplus
funds are to be carried to the reserve fund or invested in securities under
subsection'(1) without the consent of the Minister and the Minister may direct
that the whole or any part of any surplus funds be paid into the Consolidated
Fund. |
11. (1) The Commission shall establish a reserve fund. | Reserve fund. |
(2) Subject to
subsection (5), the Commission may determine the management of the fund, the
sum to be carried from time to time to the credit of the fund and the
application of the fund. |
(3) No part of the
reserve fund shall be applied otherwise than for the purposes of the
Commission. |
(4) The power of
the Minister to give directions to the Commission pursuant to section 5 shall
extend to the giving of directions to the Commission as to any matter relating
to the establishment or management of the reserve fund, the carrying of sums to
the credit of the fund or the application of the fund. |
(5) The Minister
may at any time direct that any part of the reserve fund established under
subsection (1) be paid into the Consolidated Fund. |
12. (1) The Commission shall discharge its functions
to ensure that its revenues are not less than sufficient to meet all sums
properly chargeable to its revenue accounts and its funds under sections 10 and
11 taking one year with another. | Balancing of revenue account and surplus revenue. |
(2) Any excess of
the revenue of the Commission for any financial year over the sum properly
chargeable to its revenue account and its funds under sections 10 and 11 for
that year shall be applied by the Commission for the purposes of the
Commission. |
13. (1) The Commission shall keep proper accounts of
all transactions and shall prepare in respect of each financial year a
statement of accounts in such form as the Minister may direct. | Accounts and audit. |
(2) Such accounts
shall be audited annually by an auditor appointed by the Commission with the
approval of the Minister. |
14. (1) The Commission shall, as soon as practicable
after the expiration of each financial year and in any event not later than
30th June in any year submit to the Minister a report containing- | Annual report. |
(a) an account
of its transactions throughout the preceding financial year in such detail as
the Minister may direct; and |
(b) a statement
of the accounts of the Commission audited in accordance with section 13. |
(2) The Minister
shall cause a copy of the report together with a copy of the audited financial
statements and the auditor's report to be laid on the table of both Houses of
Parliament. |
15. (1) The Minister shall appoint and may dismiss a
secretary to the Commission. | Appointment of Secretary. |
(2) The secretary
shall- |
(a) receive and
process administratively all matters relating to the Commission, and |
(b) perform any
other duties assigned to him by the Commission and by the Executive Director. |
16. The Minister shall appoint and may dismiss an
Executive Director as he considers necessary for the purpose of performing the
duties assigned to such officer by the Commission or by any written law. | Appointment of Executive Director. |
PART III
REGULATION OF SECURITIES EXCHANGES AND MARKET PARTICIPANTS |
17. (1) The Commission shall have the authority to
approve and register any company subject to subsection (2) as a Securities
Exchange pursuant to this Act. | Registration of Securities Exchanges. |
(2) Application by
a company for registration as a Securities Exchange shall be made only by a
company incorporated under the Companies Act and shall be made to the
Commission in the prescribed form accompanied by the prescribed application fee
and shall include a certified copy of its Memorandum and Articles of
Association together with any other documentation as the Commission may
require. |
(3) No person may
in The Bahamas establish or maintain or assist in establishing or maintaining a
Securities Exchange, or conduct the business of trading on a Securities
Exchange other than one registered in accordance with this Act. |
(4) Any person who
contravenes subsection (3) is guilty of an offence and shall be liable on
summary conviction to a fine of one hundred and fifty thousand dollars or to
imprisonment for two years or to both. |
(5) Any company
desiring to be registered as a Securities Exchange pursuant to this Act shall
make arrangements acceptable to the Commission for a compensation fund for the
protection of broker-dealers and customers of broker-dealers who may suffer
loss as a result of the bankruptcy, insolvency or winding up of a
broker-dealer. |
18. (1) The Commission may recognize and specify
foreign securities exchanges established and operated elsewhere than in The
Bahamas whose listed securities may become eligible for trading on a Securities
Exchange pursuant to this Act. | Recognition of foreign securities exchanges. |
(2) For the
purposes of subsection (1), the Commission may prescribe jurisdictions other
than The Bahamas whose securities laws are equivalent to those of The Bahamas. |
19. (1) Notwithstanding anything contained in any
other law but subject to subsection (2), no trading in a listed security shall
take place in The Bahamas except on the Securities Exchange on which it is
listed in accordance with this Act and any regulations or rules made
thereunder. | Trading in listed securities restricted to a
Securities Exchange. |
(2) Subsection (1)
shall not apply to individuals who are trading in securities for his, her, or
their own account or for the account of his or her spouse and children (or his
or her spouse or children) under eighteen years of age. |
20. (1) A company desiring to provide clearing,
settlement, depository, custody or other services which facilitate or are
ancillary to the operations of a Securities Exchange may not do so until it has
been approved and registered by the Commission which shall have the exclusive
authority to approve and register companies engaged in such services, and such
company shall be referred to individually as a "facility". | Clearing, settlement, depository and custody
facilities. |
(2) Application by
a company for registration as a facility shall be made only by a company
incorporated or registered under the Companies Act and shall
be made to the Commission in the prescribed form accompanied by the prescribed
application fee and shall include a certified copy of its Memorandum and
Articles of Association together with any other documentation as the Commission
may require. |
(3) No person may
establish or maintain or assist in establishing or maintaining a facility, or
conduct business with any facility other than one registered in accordance with
this Act. |
(4) Any person who
contravenes subsection (1) or (3) is guilty of an offence and shall be liable
on summary conviction to a fine of one hundred and fifty thousand dollars or to
imprisonment for two years or to both. |
21. (1) No person other than a broker-dealer which has
obtained membership to trade on a Securities Exchange may trade on such
exchange. | Broker-dealer. |
(2) Any company
(whether acting as a dealer for its own account as principal or as a broker for
the account of another) which wishes to effect or attempts to effect any
transaction or otherwise to engage in any dealing in any securities listed on a
Securities Exchange with the public including institutions, or induces or
attempts to induce the public including institutions to purchase, sell or
otherwise deal in securities shall be registered as a broker-dealer by the
Commission. |
(3) Registration
under subsection (2) as a broker-dealer shall be a requirement to application
to a Securities Exchange for membership for the purpose of trading securities
on that Exchange. |
22. (1) A broker-dealer shall be a company
incorporated or registered under the Companies Act and an
application by a company for registration as a broker-dealer shall be made to
the Commission in the prescribed form and shall be accompanied by the
prescribed application fee together with- | Application for registration as a broker-dealer. |
(a) a written
statement containing the name and description of the applicant, the address of
its registered office in The Bahamas, the names, addresses, nationalities and
background details of its substantial shareholders, officers and directors
together with their character and financial references, police certificate and
curriculum vitae; |
(b) a certified
copy of its Memorandum and Articles of Association together with a certified
copy of its certificate of incorporation or certificate of registration, as the
case may be; |
(c) a
declaration signed by the chief executive officer and the chief financial
officer that the company is in compliance with the financial requirements
pursuant to section 45; |
(d) the
following documents- |
(i) financial
statements for the last two fiscal periods together with the report of the
auditor's thereon prepared in accordance with standards promulgated by The
Bahamas Institute of Chartered Accountants or the International Federation of
Accountants, |
(ii) management
accounts up to a date not more than three months prior to submission and
certified by the chief executive officer and chief financial officer to be true
and complete: |
Provided
that a company incorporated less than six months prior to the date of
application shall provide an audited opening balance sheet; |
(e) a written
statement of the applicant's operational capabilities; |
(f) any such
other information or documentation which the Commission considers important or
appropriate. |
(2) Before
registering the applicant as a broker-dealer the Commission shall- |
(a) be
satisfied that the applicant and its principals are fit and proper persons who
have and maintain a good reputation; |
(b) consider
and if satisfied of their appropriateness taking into account the intent and
purposes of this Act approve the Memorandum and Articles of Association
referred to in subsection (1)(b); |
(c) be
satisfied that the applicant's principal business will be stockbroking and
dealing in securities; |
(d) be
satisfied that the applicant's operational capabilities and the qualifications
of the applicant, its directors, substantial shareholders and officers meet all
the standards set by the Commission. |
(3) The Commission
shall not approve or register as a broker-dealer any company which has issued
bearer shares and shall require an undertaking from every broker-dealer that it
shall not issue bearer shares. |
(4) The Commission
shall have the authority to approve or deny any application for registration or
may delay its decision and request additional information or documentation from
the applicant as it may deem necessary or desirable. |
23. (1) Upon being satisfied that the provisions of
this Act and the regulations have been complied with, the Commission shall
register the applicant as a broker-dealer. | Registration. |
(2) Where the
Commission refuses an application for registration, it shall notify the
applicant in writing of the reasons for so doing and the applicant may file an
appeal in accordance with section 42. |
(3) Upon the
registration of the applicant as a broker-dealer, the Commission shall issue a
certificate of registration in the prescribed form certifying that the
applicant is registered as a broker-dealer and such certificate shall be prima
facie evidence of compliance with all the requirements of registration of
this Act and the regulations made thereunder. |
24. At least one director of a broker-dealer shall be
a stockbroker and not less than two directors, one of whom shall be a
stockbroker director, shall be actively engaged in the securities business of
the broker-dealer. | At least one director must be stock-broker. |
25. (1) No broker-dealer may alter its Memorandum or
Articles of Association without the prior consent in writing of the Commission. | Alteration of Memorandum and Articles of a
broker-dealer. |
(2)
Notwithstanding the provisions of the Memorandum and Articles of Association of
the broker-dealer and of the Companies Act, notice in writing shall be
given to the Commission of any meeting at least fourteen days prior to the
meeting at which it is proposed to effect any alteration of the broker-dealer's
Memorandum or Articles of Association together with a copy of the proposed
resolution. |
26. (1) A broker-dealer shall give immediate notice in
writing to the Commission upon- | Notice to the Commission. |
(a) the death,
retirement, bankruptcy or resignation of any of its substantial shareholders,
officers or directors; or |
(b) any
material change requiring an amendment to its initial application for
registration as a broker-dealer or any other material change. |
(2) Upon any
occurrence of the matters mentioned in subsection (1), the Commission shall
have the authority to review the broker-dealer's licence and may revoke it or
impose conditions upon it after conducting a regulatory hearing therefor
pursuant to the powers contained in section 33. |
27. A broker-dealer shall not go into voluntary
liquidation without the prior approval of the Commission and if proceedings for
an involuntary liquidation are commenced against a broker-dealer the Commission
shall be immediately notified in writing by the affected broker-dealer or by a
director or officer thereof. | Voluntary liquidation. |
28. (1) A Securities Exchange shall maintain a
register (to be known as "the Official Register") which shall
contain- | Official Register. |
(a) the names
of current and former broker-dealers, traders, facilities and associated
persons; |
(b) information
which the broker-dealers, traders, facilities and associated persons are
required to furnish to the Commission or to a Securities Exchange; |
(c) disciplinary
records of each broker-dealer; trader, facility and associated person; and |
(d) any other
information which the Commission or the appropriate Securities Exchange may
require. |
(2) Each
broker-dealer, trader, facility or associated person shall keep current all the
information required in the Official Register and any changes shall be made by
notifying the appropriate Securities Exchange in writing. |
(3) The Commission
may authorize the public disclosure and publication of any or all of the
information contained in the Official Register. |
29. (1) No individual shall engage in any of the
following activities in The Bahamas unless he is registered as a stock-broker,
dealer or trader by the Commission and employed by a broker-dealer- | Stock-broker, etc., registration and associated person
approval. |
(a) offering to
provide or providing securities investment advice to the public including
institutions for a fee or other reward; |
(b) underwriting
of securities offerings; |
(c) trading in
securities; |
(d) dealing in
securities; |
(e) supervising
any of the aforementioned activities: |
Provided that the
provisions of this subsection shall not apply to individuals who are trading in
securities for his, her or their own account or for the account of his or her
spouse and children (or his or her spouse or children) under eighteen years of
age. |
(2) Any person,
other than one mentioned in subsection (1) or performing clerical or non
securities related functions, and employed by a broker-dealer or a facility,
must be registered by the Commission as an associated person. |
(3) The powers
exercisable by the Commission under this section shall be exercisable by the
Commission until the Commission has delegated such powers to the relevant
Securities Exchange and notice thereof has been published by the Commission in
the Gazette. |
(4) No
broker-dealer, without the consent of the Commission, may employ any individual
as a stockbroker, a dealer, a trader, or an associated person unless that
person's registration, licence or approval, as the case may be, is current and
in good standing. |
(5)
Notwithstanding the foregoing or any other provision of this Act, no company or
individual whether self employed or otherwise employed by a person who or which
is not a broker-dealer which has obtained membership to trade on a Securities
Exchange shall- |
(a) engage in
offering to provide or providing securities investment advice to the public
including institutions; |
(b) deal or
trade in securities; |
(c) supervise
any of the aforementioned activities, for a fee or other reward unless that
company or individual has been registered and licensed in that behalf with the
Commission as a securities investment advisor. |
(6) Any person or
broker-dealer who contravenes the provisions of subsection (1), (2), (3), (4)
or (5) is guilty of an offence and shall be liable on summary conviction to a
fine of one hundred and fifty thousand dollars or to imprisonment for two years
or to both. |
(7) Subsection
(5)(a) shall not apply to- |
(a) financial
institutions including banks and trust companies licensed under the Banks and Trust Companies Regulation Act
and insurance companies registered under the Insurance Act; |
(b) mutual fund
administrators licensed or exempt under the provisions of the Mutual Funds Act, 1995; |
(c) counsel and
attorneys and accountants qualified to practice in The Bahamas; |
(d) publishers
and writers of newspapers and other publications in general circulation in The
Bahamas or elsewhere who give advice only through such publications and have no
interest either directly or indirectly in any of the securities upon which the
advice is given and receives no commission or other consideration for giving
the advice, |
where
engaging in offering to provide or providing securities investment advice is
only incidental to their principal business or occupation. |
PART IV
REGULATORY AUTHORITY OF THE COMMISSION |
30. (1) In carrying out its responsibilities under this
Act the Commission may make rules providing for such matters as may be
necessary or expedient for giving effect to such responsibilities. | Rules. |
(2) Without
prejudice to the generality of subsection (1) the Commission may also make
rules for- |
(a) tender offers,
mergers and other issues of corporate control and acquisition involving any
public company; |
(b) the
solicitation of proxies by shareholders of public companies, including but not
limited to their need, form and content. |
31. (1) The Commission shall have the authority to
supervise and regulate the securities market and the operations and duties
specifically delegated or otherwise conferred upon, a Securities Exchange or
any other body registered under this Act. | Authority. |
(2) Without
prejudice to the generality of the foregoing, the Commission shall have the
authority to- |
(a) review,
approve, reverse or vary any rules, regulations, interpretations, decisions,
actions or orders of a Securities Exchange or any other body registered under
this Act; |
(b) establish
by rules the educational criteria or standards, if any, which govern the
eligibility of an individual to engage in any of the activities regulated by
this Act; |
(c) entertain
appeals from any rulings, decisions or orders of a Securities Exchange or any
other body registered under this Act and for any of these purposes the
Commission shall have the power to establish and promulgate its own procedures
pursuant to which such proceedings shall be brought, heard and determined. |
32. (1) The Commission shall have the authority to
delegate to a Securities Exchange or any other body registered under this Act
and regulated by the Commission, any of the powers conferred on it by this Act,
including the authority to adopt and enforce rules for the conduct of their
members and the responsibility to regulate their members compliance with the
provisions of those rules and of this Act. | Delegated regulatory authority. |
(2) The Commission
shall have supervisory authority pursuant to section 31 and it may withdraw,
add or vary any powers delegated pursuant to subsection (1) as it deems
necessary. |
33. The Commission shall have the authority- | Regulatory process. |
(a) to conduct
investigations and regulatory hearings to determine whether there has been or
whether there is or is likely to be because of changed circumstances by reason
of the matters set out in section 26 or otherwise a failure to comply with the
provisions of- |
(i) this
Act or with any regulations or rules made thereunder; or |
(ii) any
of the regulations and rules of a Securities Exchange or any other body
registered under this Act and regulated by the Commission; |
(b) to impose
one or more of the following sanctions, remedies or other relief as the result
of any settlements of disputes by persons registered, licensed or approved
under this Act or by decisions of the Commission as a result of regulatory
hearings- |
|
(ii) fine,
not to exceed three hundred thousand dollars; |
(iii) disgorgement
of profits or other unjust enrichment plus a penalty not to exceed twice the
amount of such profits or unjust enrichment; |
|
(v) suspension
of licence, registration or approval; |
(vi) revocation
of licence, registration or approval; or |
(vii) any
other sanctions or remedies as the justice of the case may require; |
(c) to
establish and promulgate procedures to be used in carrying out any of the
functions conferred by this section upon the Commission. |
34. (1) In carrying out an investigation under this
Part, the Executive Director is empowered to require the production of any
document or other information he deems relevant to the investigation. | Investigation. |
(2) In carrying
out his functions under this Part, the Executive Director is empowered to
summon witnesses to give evidence or produce any documents or other materials
to enable him to carry out his investigation subject to the right of either the
Executive Director or the witness to apply to the Supreme Court for an order
compelling the co-operation of the witness or excusing the witness from
complying with the summons, as the case may be. |
(3) To assist the
Commission and the Executive Director in carrying out the functions hereby
required, the Commission shall establish a Disciplinary Committee comprising
five persons including not more than two persons who are members of the
Commission. |
(4) Upon
completion of his investigation, the Executive Director shall report his
findings to the Disciplinary Committee for any appropriate action and the
Disciplinary Committee may recommend to the Commission- |
(a) dismissal
of the matter; |
(b) the issue
of a letter of caution or some other informal remedial action; |
(c) the filing
of a formal complaint and proceeding with a regulatory hearing before the
Commission; or |
(d) the
reference of the matter to the Attorney-General, |
and in every
case the recommendation of the Disciplinary Committee shall be approved or
ratified by the Commission before being executed. |
35. (1) Where a dispute has arisen out of or in
connection with any dealings in a listed security between any person regulated
by the Commission or by a Securities Exchange and another party and that
dispute has been settled between the parties, the person so regulated shall,
within twenty-one days after the settlement has been effected provide to the
Commission a written report of the dispute together with copies of all
documentation relating to the settlement. | Sanctions and remedies. |
(2) The Commission
shall as soon as practicable after receipt of the said report consider the
matter and may either make a finding as to whether or not a violation of any
provision of this Act or of any regulations or rules made thereunder has
occurred or require that a regulatory hearing be held to so determine. |
(3) In either
case, should the Commission decide that a violation has occurred, it may
dismiss the matter or impose one or more of the sanctions or remedies specified
in section 33(b) as it deems fit. |
36. Except where the Commission had made an order or
ruling in the terms of section 33(b)(v) and (vi), where any person or entity
against whom a decision has been rendered has not fully complied with the terms
of such decision within the prescribed time, that person or entity shall be in
contempt of the Commission, and shall have its registration, licence or
approval suspended until further order of the Commission. | Compliance with decisions of the Commission. |
37. (1) The Commission may subject any person
regulated under this Act to an order to prevent or restrain the breach of or
any non-compliance with, any provision of this Act or the regulations or rules
made thereunder by any person or entity, and such order shall be subject to
appeal to the Supreme Court. | Order. |
(2) In addition to
all the rights or remedies which are exercisable by the Commission or the
Board, they or either of them, shall have the power to make an application to
the Supreme Court for an order to prevent the dissipation of any assets owned
or standing to the credit of any broker-dealer or other person regulated by
this Act. |
(3) The Board
shall have the power to suspend a broker-dealer or a trader or a facility or an
associated person or to impose an order upon any of the foregoing persons to
prevent or restrain the breach of or non-compliance with any provision of this
Act or the regulations or rules made thereunder by any of the foregoing
persons, who may appeal such suspension or imposition to the Commission with a
right of appeal to the Supreme Court. |
38. Where it is provided in this Act that a register
be established and maintained or kept, or a book of accounts be kept, or a list
be prepared or published, any entry in such register, book of account or list,
or the production of any licence or certificate issued under this Act shall be prima
facie evidence of the contents thereof. | Register as evidence. |
39. No proceedings against any person or body
corporate for a breach of any of the provisions of this Act, or for a failure
to comply with any of its provisions may be commenced after the expiration of
four years from the day upon which the breach or non-compliance is or ought to
have been discovered. | Time limits. |
40. In any proceedings for an offence under this Act,
it shall be a good defence for the person charged to prove that he took all
reasonable precautions and exercised all due diligence to avoid the commission
of the offence by himself or by any person under his supervision or control. | Defence. |
41. In the absence of any specific provision in this
Act governing the operations of a Securities Exchange, the appropriate
provision of the Companies Act relating to companies generally shall apply. | Applicability of the Companies Act. |
42. (1) Any person aggrieved by a decision, refusal,
ruling or order of the Commission may appeal to the Supreme Court in accordance
with rules of court. | Appeals. |
(2) On an appeal
pursuant to subsection (1), the Commission shall be entitled to appear and be
heard in the proceedings on the appeal. |
43. (1) Where a broker-dealer, trader, securities
investment advisor, facility or associated person is convicted in The Bahamas
or elsewhere of a criminal offence involving fraud or dishonesty under Bahamian
or any other law, such person shall cease to be registered, licensed or
approved under this Act with effect from the date of the conviction. | Criminal conviction. |
(2) Where a
broker-dealer, trader, securities investment advisor, facility or associated
person is convicted in The Bahamas of any criminal offence other than fraud or
dishonesty under Bahamian law or is convicted of any like criminal offence
under any foreign law in any foreign jurisdiction, such person's licence,
registration or approval shall be reviewed by the Commission and may be subject
to revocation, suspension or other remedial action. |
(3) Where a
broker-dealer, trader, securities investment advisor facility or associated
person has been the subject of any disciplinary action by any Bahamian or
foreign regulatory organization, such person's registration, licence or
approval shall be reviewed by the Commission and may be subject to revocation,
suspension or other remedial action. |
44. The Commission shall have the power to suspend
trading for a period of time of all or any securities on a Securities Exchange
if it deems it to be in the public interest to do so. | Suspension of trading. |
PART V
FINANCIAL REQUIREMENTS:
BROKER-DEALERS |
45. (1) All broker-dealers, upon being registered under
this Act, shall have and maintain an issued and paid up capital of not
less than the sum prescribed by regulations made under this Act, provided that
the Commission may from time to time vary such minimum capital sums in
particular instances. | Minimum capital requirements. |
(2) In addition to
the provisions of subsection (1), every broker-dealer shall maintain the
financial standards relating to capital and liquidity at levels fixed by the
Commission from time to time. |
46. A broker-dealer shall keep such books, accounts,
registers and other records as may be necessary- | Records and books of accounts. |
(a) to show the
nature and details of all dealings and transactions entered into by it; |
(b) to explain
transactions and the financial status of its business at any time; |
(c) to enable a
true profit and loss account and balance sheet to be prepared from time to
time, |
and such
other books and records as the Commission may from time to time require. |
47. (1) A broker-dealer shall establish and keep in
one or more banks which hold an unrestricted licence issued pursuant to section
4 of the
Banks and Trust Companies Regulation Act (or such other bank or trust company
outside The Bahamas as may be approved by the Commission for the purposes of
this section) one or more trust accounts designated as such into which it shall
pay- | Trust accounts. |
(a) all moneys
(less any commission and proper charges) that are received from or on account
of any person, other than another broker-dealer, for the purchase of securities
not delivered to the broker-dealer within five trading days after receipt of
such moneys; |
(b) moneys
(less any commission and other proper charges) that are received on account of
any person, other than a broker-dealer, from the sale of securities and not
paid to that person or as that person directs within five trading days after
receipt of such moneys. |
(2) Save as
otherwise provided in this Part, moneys held in trust accounts in accordance
with this section shall not be used for payment of the debts or expenses of a
broker-dealer. |
48. A broker-dealer may not withdraw any moneys from a
trust account established under section 47 except for the purpose of making payment
on behalf of or to the person lawfully entitled thereto, or for any other
purpose duly authorized by law. | Withdrawals from trust account. |
49. Nothing in this Part shall affect in any way any
lawful claim or lien which a person may have against or upon moneys held in a
trust account, or against or upon moneys received for the purchase of
securities, or from the sale of securities, before such moneys are paid into a
trust account. | Claims and liens not affected. |
50. Any person who fails to comply with or contravenes
any of the provisions of section 45, 46, 47 or 48 is guilty of an offence and
shall be liable on summary conviction to a fine of seventy-five thousand
dollars or to imprisonment for one year or to both. | Contravention. |
51. (1) A broker-dealer shall appoint an auditor who
is a public accountant licensed under the Public Accountants
Act, 1991, and approved by the Commission. | Audit of broker-dealers. |
(2) The
broker-dealer shall- |
(a) within four
months after its financial year file with the Commission- |
(i) financial
statements in respect of that year along with the report of the auditor thereon
required pursuant to the provisions of subsection (3)(a), |
(ii) a
copy of the report of the auditors on results of the procedures performed by
him pursuant to the provisions of subsection (3)(b); |
(b) within
forty-five days following every third month of its financial year (other than
the year end), prepare and submit to the Commission on the prescribed forms,
financial and other information as may be prescribed covering the previous
three month period: |
Provided
that such financial and other information need not be audited or otherwise
subject to verification or attestation by the auditor, but shall be attested to
by the broker-dealer's chief executive officer and chief financial officer to
be true and complete. |
(3) The auditor
shall issue- |
(a) a report on
his audit of the financial statements stating whether or not the financial
statements present fairly (or present a true and fair view of), in all material
respects, the financial position of the broker-dealer and the results of its
operations and its cash flows in accordance with standards promulgated by The
Bahamas Institute of Chartered Accountants or the International Federation of
Accountants; and |
(b) a report on
whether or not the business of the broker-dealer has been conducted in
accordance with the provisions of this Act and the regulations and rules
prescribed thereunder relating to the record keeping, reserve requirements,
filing requirements, segregation of customers' funds and the financial affairs
of broker-dealers. |
(4) Where
the report of the auditor required by subsection (3)(a) is qualified in any
respect or the report required by subsection (3)(b) discloses that there are
any material weaknesses or deficiencies in or non-compliance with any of the
provisions of this Act and the regulations and rules made thereunder relating
to the record keeping, reserve requirements, filing requirements, segregation
of customers' funds and the financial affairs of broker-dealers, the Commission
shall, if deemed necessary, suspend the broker dealer from trading on a
Securities Exchange, and such suspension shall not be removed until, the matter
giving rise to the qualified audit report is rectified or otherwise resolved or
the matters giving rise to the weaknesses or deficiencies in or non-compliance
with the aforementioned provisions of the Act and the regulations and rules
made thereunder are rectified. |
(5) Where in the
course of performing the duties required by subsection (3) the auditor comes to
the view that a matter that could give rise to a qualification in the audit
report on the financial statements or that a major deficiency, weakness or
non-compliance should be reported to the Commission, he shall request the
broker-dealer to notify the Commission accordingly and, if the broker-dealer
fails or refuses to do so, the auditor shall notify the Commission forthwith on
the prescribed form with a copy of such notification being supplied to the
broker-dealer. |
52. (1) Every broker-dealer shall, to the satisfaction
of the Commission, effect and maintain appropriate policies of insurance for
the purpose of indemnifying itself against any liability that may be
incurred as a result of any act or omission of any of its directors, officers
or employees. | Indemnity insurance. |
(2) Failure to
comply with this section shall render the registration of the broker-dealer
revocable by the Commission. |
53. (1) A broker-dealer may not- | Prohibition. |
(a) acquire any
substantial shareholdings in any company or any substantial interest in the
undertakings of any company which is not a broker-dealer other than in the
usual course of the business of trading in securities; |
(b) acquire any
shares, debentures or other interest in any other broker-dealer, except where
such acquisition involves the take-over of all the shares, debentures and other
interests of the other broker-dealer, |
without the
approval of the Commission. |
(2) Failure
to comply with this section shall render the registration of the broker-dealer
revocable by the Commission. |
PART VI
THE ISSUE OF SECURITIES TO THE PUBLIC:
PROSPECTUS |
54. (1) Subject as hereinafter appears it shall not be
lawful to publish to the public any invitation to subscribe for securities or
to issue to the public any form of application to subscribe for or to purchase
securities- | No issue to public without an approved prospectus. |
(a) unless
before the date of such publication or issue, as the case may be, the
prospectus required by and complying with the requirements of this Act and
regulations made thereunder, has been lodged with the Commission and has been
registered as provided herein; |
(b) unless in
the case of the issue of any form of application for securities such form of
application is accompanied by a copy of the prospectus as so registered with
the Commission. |
(2) A prospectus- |
|
(b) shall be
signed, in the case of a company or intended company by the chief executive
officer and the chief financial officer and by every director or proposed
director or his agent, and in the case of a partnership by every general
partner or proposed general partner or his agent, and in the case of a trust by
every trustee and in the case of a syndicate or of a joint venture by every
manager or proposed manager or his agent. |
(3) Every
prospectus shall state on its face that the original has been registered with
the Commission, but the publication of the prospectus shall not be deemed to
mean approval of the contents thereof by the Commission nor create any
liability of the Commission nor of the Government in respect thereof or in respect
of any statement contained therein and every published prospectus shall contain
a statement to such effect prominently displayed therein. |
(4) The provisions
of subsection (1) shall not apply if it is shown to the reasonable satisfaction
of the Commission- |
(a) that the
form of application was issued either in connection with a bona fide
invitation to a person or persons or company to enter into an underwriting
agreement with respect to the securities which are to be offered to the public
in the future; or |
(b) that the
issue was in relation to securities which were not offered to the public and
that issuers have fifty members or less and are prima facie exempt as
regards dealings in their securities and the issue of invitations in respect
thereof which will not result in their having more than fifty members. |
(5) If any person
acts in contravention of the provisions of subsection (1), he is guilty of an
offence and shall be liable on summary conviction to a fine of thirty thousand
dollars, or to imprisonment for six months or to both. |
(6) In the event
of non-compliance with or contravention of any of the requirements of this
section, any person responsible for the publication or issue of the prospectus
shall not incur any liability by reason of the non compliance or contravention
if- |
(a) as regards
any matter not disclosed, he proves that he was not cognizant thereof; |
(b) he proves
that the non-compliance or contravention arose from an honest mistake of fact
on his part; or |
(c) the
non-compliance or contravention was in respect of matters which in the opinion
of the court dealing with the case were immaterial and were otherwise such as
ought, in the opinion of the court, having regard to all the circumstances of
the case, reasonably to be excused: |
Provided that, in
the event of failure to include in a prospectus a statement with respect to
matters relating to share capital, no such responsible person shall incur any
liability in respect of the failure unless it be proved that he had knowledge
of the matters not disclosed; and provided that nothing in this subsection
shall limit or diminish any liability which the responsible person or the
issuer of the securities may incur under the Common Law or this Act apart from
this subsection. |
(7) This section
shall not apply- |
(a) to
securities issued by the Government of The Bahamas; |
(b) to exempt
securities pursuant to subsection (8); |
(c) to an issue
of securities exempt from the provisions of this section by the Commission in
writing; or |
(d) to any such
class of securities which the Commission designates as exempt from the
requirements of this section. |
(8) For the
purposes of paragraph (b) of subsection (7), "exempt securities"
shall mean- |
(a) securities
which are regulated under the Mutual Funds Act, 1995 or are "exempt mutual
funds" pursuant to subsection (4) or (6) of section 3 of that Act; |
(b) securities
quoted on and dealt in on a recognized foreign securities exchange specified by
the Commission pursuant to section 18 of this Act and currently in good
standing in its relevant jurisdiction; |
(c) subject to
approval by the Commission, securities authorized by a national or local
government, its agencies or any other quasi-governmental entity. |
(9) Every company
incorporated in The Bahamas and every partnership or joint venture or syndicate
or trust or other issuer established in The Bahamas that issues securities to
the public in any other jurisdiction shall comply with the provisions of this section
and any regulations made thereunder: |
Provided that
securities issued in jurisdictions prescribed by the Commission pursuant to
section 18 are exempt from complying with this subsection. |
(10) In any
particular class of securities or issuers, the Commission shall have the
authority- |
(a) to require
any additional information to be included in the prospectus; or |
(b) to permit
the omission of any items of information. |
(11) Upon written
application by an issuer, the Commission shall have the authority to exempt
such issuer from any of the requirements of this section. |
55. (1) A prospectus inviting persons to subscribe for
securities and which includes a statement purporting to be made by an expert
shall not be published unless | Expert's consent to issue of prospectus containing
statement by him. |
(a) such expert
has given his consent in writing and has not, before delivery of the prospectus
for registration, withdrawn his written consent to the publication thereof with
the statement included in the form and context in which it is included; and |
(b) a statement
that he has given and has not withdrawn his consent as aforesaid appears in the
prospectus. |
(2) If any
prospectus is published in contravention of this section, the issuer and every
person who is knowingly a party to the publication thereof is guilty of an
offence and shall be liable on summary conviction to a fine of ten thousand
dollars. |
(3) In this Part
the expression "expert" includes engineer, valuer, accountant,
counsel and attorney and any other person whose profession gives authority to a
statement made by him. |
56. (1) No prospectus shall be registered by the
Commission unless there has been delivered to the Commission a copy there-of
dated and signed by such persons as are required by subsection (2) of section
54 or by their agent authorized in writing, and having endorsed thereon or
attached thereto- | Registration of prospectus. |
(a) any consent
to the publication of the prospectus required by section 55 from any person as
an expert; |
(b) a copy of
any contract required by regulations to be stated in the prospectus, or, in the
case of a contract not reduced into writing, a memorandum giving full
particulars thereof; and |
(c) where the
person making any report required by any regulations made under this Act has
made therein, or has without giving the reasons indicated therein, any
adjustments to his report, a written statement signed by that person setting
out the adjustments made and the reasons therefor. |
(2) The references
in subsection (1)(b) to the copy of a contract required thereby to be endorsed
on or attached to a copy of the prospectus shall, in the case of a contract
wholly or partly in a foreign language, be taken as references to a copy of a
translation of the contract in English or a copy embodying a translation in
English of the parts in a foreign language, as the case may be, being a
translation certified by the translator before a notary public and authenticated
to be a correct translation, and the reference to a copy of a contract required
to be available for inspection shall include a reference to a copy of a
translation thereof or a copy embodying a translation of parts thereof all
similarly certified as aforesaid. |
(3) Every
prospectus shall, on the face of it- |
(a) state that
a copy has been lodged for registration as required by section 54 and that
publication of the prospectus or allocation or trading in the securities
described in the prospectus as being offered can commence only after the
registration of the prospectus by the Commission; and |
(b) specify, or
refer to statements included in the prospectus which specify, any documents
required by this section to be endorsed on or attached to the copy so delivered. |
(4) Where a copy
of a prospectus has been lodged for registration, the Commission shall issue a
receipt for the prospectus and shall- |
(a) register
the prospectus expeditiously; or |
(b) refuse to
register the prospectus and notify the issuer immediately in writing of the
reason for so doing. |
(5) The Commission
shall not register a prospectus unless it is dated and the copy thereof signed
in the manner required by this section and section 54 and unless it has
endorsed thereon or attached thereto such financial statements, reports or
other documents as are required by this Act or any regulations or rules made
thereunder. |
(6) The Commission
shall refuse to register a prospectus if it appears to the Commission |
(a) that the
prospectus or any other document required to be filed therewith- |
(i) fails
to comply in any substantial respect with any of the requirements of this Act
or any regulations or rules made thereunder, or |
(ii) contains
any statement that is misleading, false or deceptive; |
(b) that an
unconscionable consideration has been or is intended to be paid for promotional
purposes or for the acquisition of a security; |
(c) that the
proceeds from the sale of securities together with other resources of the
issuer will be insufficient to accomplish the purpose of the issue as stated in
the prospectus; |
(d) that the
financial condition or past conduct of the issuer or any officer, director,
promoter or person connected with the issuer affords reasonable grounds for
believing that the business of the issuer will not be conducted in a manner
that is financially responsible or is in the best interest of the holders of
its securities; or |
(e) that a
person who has prepared or certified any part of the prospectus or is named as
having prepared or certified a report or valuation used in or in connection
with the prospectus is not a fit and proper person to do so. |
(7) If a
prospectus is published without its having been registered by the Commission
under this Act, the issuer and every person who is knowingly a party to the
publication of the prospectus is guilty of an offence and shall be liable to a
fine of one thousand dollars for every day, or part thereof, from the date of
the publication of the prospectus until the prospectus is in compliance with
all the requirements of this Act and the regulations and shall be further
liable- |
(a) on summary
conviction to a fine of thirty thousand dollar |