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Power of Authority to require production of books by a securities exchange and certain persons

Securities Industry Act

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—(1) The Authority may, at any time, if it considers there is sufficient reason to do so, by notice in writing —(a)give a direction to —(i)a securities exchange;(ii)a member of the committee of a securities exchange;(iii)a person who is or has been, either alone or together with another person or other persons, a dealer or an investment adviser or is or has been a dealer’s representative or an investment representative;(iv)a nominee controlled by a person referred to in sub-paragraph (iii) or jointly controlled by two or more persons at least one of whom is a person referred to in that sub-paragraph;(v)a person who is or has been an officer or employee of, or an agent, advocate and solicitor, auditor or other person acting in any capacity for or on behalf of, a securities exchange or a person referred to in sub-paragraph (ii), (iii) or (iv); or(vi)any other person who is or has been a party to any dealing in securities,requiring the production to a person, authorised by the Authority to receive them at such time and place as are specified in the direction, of such books as are so specified, being books relating to —(A)the business or affairs of a securities exchange;(B)any dealing in securities;(C)any advice concerning securities or the issuing or publication of a report or analysis concerning securities;(D)the character or financial position of, or any business carried on by, a person referred to in sub-paragraph (iii) or (iv); or(E)an audit of, or any report of an auditor concerning a dealing in securities or any accounts or records of a dealer or of an investment adviser; or(b)give a direction to any person requiring the production, to a person authorised by the Authority to receive them, at such time and place as are specified in the direction, of any books relating to matters mentioned in sub-paragraph (A), (B), (C), (D) or (E) of paragraph (a) that are in the custody or under the control of the person except that the books shall not be required to be produced at such times and at such places as shall unduly interfere with the proper conduct of the normal daily business of that person.(2) The Authority may from time to time authorise a person, on producing, if required to do so, such evidence of his authority as is prescribed —(a)to require by notice in writing a securities exchange or a person referred to in sub-paragraph (ii), (iii), (iv), (v) or (vi) of subsection (1)(a) to produce to the authorised person forthwith such books relating to matters mentioned in sub-paragraph (A), (B), (C), (D) or (E) of subsection (1)(a) as are specified by the authorised person and are in the custody or under the control of the securities exchange or person of whom the requirement is made; or(b)to require by notice in writing a securities exchange or any other person to produce to the authorised person forthwith any books relating to matters mentioned in sub-paragraphs (A), (B), (C), (D) and (E) of subsection (1)(a) that are in the custody or under the control of the securities exchange or other person.(3) A reference in subsection (1) to a dealing in securities or to a business carried on by a person includes a reference to a dealing in securities by a person as a trustee or to a business carried on by a person as trustee, as the case may be.(4) An authorisation under subsection (2) may be of general application or may be limited to making requirements of a particular securities exchange or other person or particular securities exchanges or other persons.(5) Where the Authority, or a person authorised by the Authority, requires the production of any books under this section and a person has a lien on the books, the production of the books does not prejudice the lien.(6) Where the Authority, or a person authorised by the Authority, exercises a power under this section to require another person to produce books —(a)if the books are produced, the person to whom the books are produced —(i)may take possession of the books and make copies of, or take extracts from, the books;(ii)may require the other person or any person who was party to the compilation of the books to make a statement providing an explanation of any of the books;(iii)may retain possession of the books for as long as the Authority may consider necessary to enable the books to be inspected and copies of or extracts from the books to be made or taken by or on behalf of the Authority; and(iv)shall permit the other person, upon giving a reasonable notice and specifications of the books, to have access to such books which are in the possession of the Authority; or(b)if the books are not produced, the Authority or the authorised person may require the other person —(i)to state, to the best of his knowledge and belief, where the books may be found; and(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.(7) A person shall not be subject to any liability by reason that the person complies with a direction given or purporting to have been given under subsection (1) or a requirement made or purporting to have been made under subsection (2).(8) A power conferred by this section to make a requirement of a person extends, if the person is a body corporate, including a body corporate that is in the course of being wound up, or was a body corporate, being a body corporate that has been dissolved, to making that requirement of any person who is or has been an officer of the body corporate.(9) Whenever it appears to any magistrate, upon written information on oath, and after any enquiry he may think necessary, that there are reasonable grounds for suspecting that there are on particular premises any books the production of which has been required by virtue of this section, and which have not been produced in compliance with that requirement, the magistrate may issue a warrant authorising the Authority or any person named therein with or without assistance —(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.(10) The powers conferred under subsection (9) are in addition to, and not in derogation of, any other powers conferred by law.(11) In this section, “premises” includes any structure, building, aircraft, vehicle, vessel or place.(12) A person is not excused from making a statement providing an explanation as to any matter relating to the compilation of any books or as to any matter to which any books relate pursuant to a requirement made of him in accordance with this section on the ground that the statement might tend to incriminate him but, where the person claims before making a statement that the statement might tend to incriminate him, the statement is not admissible in evidence against him in criminal proceedings other than proceedings under this section.(13) Subject to subsection (12), a statement made by a person in compliance with a requirement made under this section may be used in evidence in any criminal or civil proceedings against the person.

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