§ 216 After Clause 45 insert the following new clause: "Prohibition on abuse of information obtained in official capacity.
§ .—(1) This section applies to any information which—
- (a) is held by a Crown servant or former Crown servant by virtue of his position or former position as a Crown servant or is knowingly
1136 obtained by an individual (directly or indirectly) from a Crown servant or former Crown servant who he knows or has reasonable cause to believe held the information by virtue of any such position; - (b) it would be reasonable to expect an individual in the position of the Crown servant or former position of the former Crown servant not to disclose except for the proper performance of the functions attaching to that position; and
- (c) the individual holding it knows is unpublished price sensitive information in relation to securities of a particular company (relevant securities).
§ (2) This section applies to a Crown servant or former Crown servant holding information to which this section applies and to any individual who knowingly obtained any such information (directly or indirectly) from a Crown servant or former Crown servant who that individual knows or has reasonable cause to believe held the information by virtue of his position or former position as a Crown servant.
§ (3) An individual to whom this section applies—
- (a) shall not deal on a recognised stock exchange in any relevant securities;
- (b) shall not counsel or procure any other person to deal in any such securities, knowing or having reasonable cause to believe that that other person would deal in them on a recognised stock exchange; and
- (c) shall not communicate to any other person the information held or, as the case may be, obtained by him as mentioned in subsection (2) above if he knows or has reasonable cause to believe that that or some other person will make use of that information for the purpose of dealing, or of counselling or procuring any other person to deal, on a recognised stock exchange in any such securities.
§ (4) Section (Prohibition on stock exchange deals by insiders, etc.) (8) and (11) above shall apply for the purposes of this section as they apply for the purposes of that section.
§ (5) An individual shall not, by reason only of having information relating to a particular transaction, be prohibited by any provision of this section from doing anything if he does that thing in order to facilitate the completion or carrying out of the transaction.
§ 217 After Clause 45 insert the following new clause:
§ Off-market deals
§ (1) Subject to section (International bonds) below, sections (Prohibition on 1137 stock exchange deals by insiders, etc.) and (Prohibition on abuse of information obtained in official capcity) above shall apply in relation to—
§ (a) dealing otherwise than on a recognised stock exchange in the advertised securities of any company—
§ (i) through an off-market dealer who is making a market in those securities, in the knowledge that he is an off-market dealer, that he is making a market in those securities and that the securities are advertised securities; or
§ (ii) as an off-market dealer who is making a market in those securities or as an officer, employee or agent of such a dealer acting in the course of the dealer's business;
§ (b) counselling or procuring a person to deal in 'advertised securities in the knowledge or with reasonable cause to believe that he would deal in them as mentioned in paragraph (a) above;
§ (c) communicating any information in the knowledge or with reasonable cause to believe that it would be used for such dealing or for such counselling or procuring,
§ as they apply in relation to dealing in securities on a recognised stock exchange and to counselling or procuring or communicating any information in connection with such dealing.
§ (2) An individual who, by reason of his having any information, is for the time being prohibited by any provision of section (Prohibition on stock exchange deals by insiders, etc.) or (Prohibition on abuse of information obtained in official capacity) above from dealing in any securities shall not—
- (a) counsel or procure any other person to deal in those securities in the knowledge or with reasonable cause to believe that that person would deal in the securities outside Great Britain on any stock exchange other than a recognised stock exchange; or
- (b) communicate that information to any other person in a knowledge or with reasonable cause to believe that that or some other person will make use of the information for the purpose of dealing or of counselling or procuring any other person to deal in the securities outside Great Britain on any stock exchange other than a recognised stock exchange.
§ Sections (Prohibition on stock exchange deals by insiders, etc.) (8) and (11) and (Prohibition on abuse of information obtained in official capacity) (5) shall have effect as if any reference therein to either of those sections included a reference to this subsection.
§ (3) In this section—
§ "advertised securities", in relation to 1138 a particular occurrence, means listed securities or securities in respect of which, not more than six months before that occurrence, information indicating the prices at which persons have dealt or were willing to deal in those securities has been published for the purpose of facilitating deals in those securities
§ "off-market dealer" means a person who—
- (a) holds a licence under section 3 of the Prevention of Fraud (Investments) Act 1958 (principals' and representatives' licences for dealers in securities); or
- (b) is a member of a recognised stock exchange or recognised association of dealers in securities within the meaning of that Act; or
- (c) is an exempted dealer within the meaning of that Act.
§ (4) For the purposes of this section an off-market dealer shall be taken to deal in advertised securities if he deals in such securities or acts as an intermediary in connection with deals made by other persons in such securities; and references in this section to such a dealer's officer, employee or agent dealing in such securities shall be construed accordingly.
§ (5) For those, purposes an individual shall be taken to deal through an off-market dealer if the latter is a party to the transaction, is an agent for either party to the transaction or is acting as an intermediary in connection with the transaction."
§ Viscount TRENCHARDMy Lords, I do not know whether I may move these two amendments formally. I have spoken very briefly to them. If noble Lords wish me to expand I will, but otherwise I beg to move that this House doth agree with the Commons in their Amendments Nos. 216 and 217.
§ Moved, That this House doth agree with the Commons in the said amendments.—(Viscount Trenchard.)
§ On Question, Motion agreed to.