Section 126 Investments and Securities Act

Section 126 of the Investments and Securities Act 2025 is about Disclosure of certain interests in securities by securities dealers. It is under Part X (Conduct of Securities Business) of the Act. It provides as follows:

(1) Where a securities dealer, fund manager, investment adviser, underwriter or a person associated with any of them, issues circulars or other similar written communications with respect to securities or a class of securities in which he has interest, he shall disclose in legible form, the nature of that interest.

(2) For the purposes of subsection (1), interest shall include any financial benefit or advantage which will, or is likely to, accrue directly or indirectly on or arising out of dealings in the securities.

(3) Where a securities dealer, fund manager, investment adviser, underwriter or an associated person of any of them —
(a) has purchased securities for the purpose of offering all or any of the securities to the public; and
(b) offers to sell any of the securities to any person, he shall not make a recommendation with respect to the securities offered for the purpose unless he has informed each person to whom the recommendation is made that he purchased the securities for that purpose.

(4) Where securities have been offered for subscription or purchase, and a person has subscribed for or purchased or is or will or may be required to subscribe for or purchase, any of those securities under an underwriting or subunderwriting agreement by reason that some or all of the securities have not been subscribed for or purchased, he shall not, during the period of 90 days after the close of the offer, make an offer to sell those securities, other than in the ordinary course of trading on a securities exchange, or make a recommendation with respect to those securities within a period to be prescribed by the Commission, unless the offer or recommendation complies with the provisions of subsection (5).

(5) An offer or recommendation shall not be made under subsection (4) unless it contains or is accompanied by a statement to the effect that the offer or recommendation relates to securities which he has acquired, or may be required to acquire under an underwriting or sub-underwriting agreement by reason that some or all of the securities have not been subscribed for or purchased.

(6) A securities dealer, fund manager, investment adviser, or any of their representative shall not issue to any person any circular, other communication, written offer or recommendation to which subsections (1), (3) or (4) apply unless the circular or other communication or the written offer or recommendation is signed by a director, executive officer or secretary in the case of a body corporate, and that individual in the case of a natural person.

(7) Where a securities dealer, fund manager, investment adviser, or any of their representative issues to any person a circular, other communication, written offer or recommendation to which subsections (1), (3), (4) or (5) apply, the first mentioned person shall preserve for a period of seven years a copy of the circular or other communication or of the written offer or recommendation, duly signed by any of the persons mentioned in subsection (6).

(8) Reference in this section to an offer of securities shall be construed to include a reference to a statement that is not an offer but expressly or impliedly invites a person to whom it is made, to offer or acquire securities.

(9) A person who contravenes the provisions of this section commits an offence and is liable on conviction to a fine of not less than ¦ 5,000,000, or to imprisonment for a term not more than three years or both.