This section deals with exemptions. What is the definition of advertisements of a "private character"?
SECTION 32.
Question proposed; "That section 32 stand part of the Bill."
Section 32 allows the Central Bank to exempt certain classes of advertisement from the provisions of section 31. The bank may attach conditions to any such exemption. Subsection (1) allows the bank to exempt certain classes of advertisements from restrictions provided for in section 31. These exemptions may relate to advertisements of a private nature, to those which deal only incidentally with investments and to advertisements issued to persons expert enough to understand any risks involved; in other words, one is distinguishing between someone who is an expert in financial management and who deals in stocks, shares, etc., and someone who is a casual player of the market.
How does one cover inhouse advertisements in the context of the last person the Minister mentioned who goes into a bank, sees one of these advertisements, as stated in the Bill, and then makes an investment on the basis of such information which turns out differently from what that person anticipated it to be?
Private advertising would be on a one to one basis rather than mass advertising as such.
Is an advertisement inside a bank or a company office, which says all the obvious things without the small print classed as a private advertisement because it is in-house, as opposed to literature which comes through the mail or advertisements in a magazine?
No. As long as something is on public display and can be seen, it constitutes open advertising.
Will the Minister give me an example of something that is of a private nature?
Something of a private nature would be, for example, if the firm in question placed and advertisement for a job. That would have nothing to do with the mainstream business of the Exchange or company. It has nothing to do with the business being transacted or offering the service.
Question put and agreed to.
Question proposed: "That section 33 stand part of the Bill."
Does this section generally concern auditors, given that section 153 of the Finance Bill may or may not be included in the completed Bill? I hope it will not be included but, as ever, we will wait and see. Do those conditions have any effect on this section of this Bill?
The question of auditors is an important one. This section allows the Central Bank to require an approved stock exchange or member firm to notify it in advance of the proposed appointment or reappointment of an auditor, as well as the name of the person proposed to be appointed. The Bank may direct that the person proposed should not be appointed and reappointed. Where the Bank direction concerns the reappointment of a person as auditor, that person can appeal the Bank's direction to the High Court.
Subsection (1) for example allows the Bank to require approved stock exchange or authorised member firms to notify it in advance of notices being sent to shareholders about the proposed appointment or reappointment of a person as auditor. The Bank may also require an exchange or member firm to notify it before it fills any casual vacancy in the office of auditor. The Bank is to be notified of the name of the person who is proposed as auditor and is also to be supplied with any information which it requests regarding that person.
Subsection (2) allows the Bank in the interests of the investors or in the interests of the proper and orderly regulation of the Stock Exchange and member firms to direct the approved stock exchange or authorised member firm not to appoint or reappoint a person as auditor.
Subsection (3) provides that if the Bank gives a direction not to appoint an auditor the auditor may appeal to the High Court to have the direction set aside.
The question I asked earlier was whether you had confirmed that there is no impact from section 153. I accept that it would apply, of course.
There is no impact. It would apply but it would not impact on the provisions.
The obligations imposed by section 153 of the Finance Bill, if it goes through, would also have the same impact on the auditor's relationship with these companies, would it not?
Yes. If they apply generally to companies they also would apply here.
It was trying to establish that there are no specific provisions for the Stock Exchange or its members that exclude it.
No.
Question put and agreed to.
SECTION 34.
Amendments Nos. 49 and 50 are related and may be discussed together by agreement.
I move amendment No. 49:
In page 43, subsection (10), lines 40 to 42, to delete paragraph (c) and substitute the following:
"(c) the approved stock exchange or authorised member firm has complied with rules or requirements relating to client money and investment instruments referred to in section 52* of this Act and with the provisions of sections 52 (3)* and 52 (4)* of this Act;".
Amendments Nos. 49 and 50 are essentially drafting amendments. Subsection 10 imposes a duty on an auditor to make investigations so as to be able to form an opinion whether an approved stock exchange or authorised member firm has complied with the obligations in respect to client money, investment instruments and codes. However, as drafted, it does not specify what precisely these obligations are. These amendments clarify the position by specifying that the rules and requirements referred to in section 52, which is the section dealing with client money, and the provisions of sections 52 (3) and 52 (4) are actually meant.
Amendment agreed to.
I move amendment No. 50:
In page 43, subsection (10), line 46, after "records" to insert "or to comply with rules or requirements relating to client money and investment instruments referred to in paragraph (c) of this subsection and with the provisions of sections 52 (3) and 52 (4) of this Act".
Amendment agreed to.
Amendments Nos. 51 and 52 are related and may be discussed together by agreement.
I move amendment No. 51:
In page 44, subsection (12) (a), line 9, to delete "is" and substitute "shall be".
They are both drafting amendments to delete "is" in both cases and substitute "shall be".
Amendment agreed to.
I move amendment No. 52:
In page 44, subsection (12) (b), line 17, to delete "is" and substitute "shall be".
Amendment agreed to.
Section 34, as amended, agreed to.
Section 35 agreed to.