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A
BILL
To
Ensure Market Integrity
The people of the Commonwealth of Redmont, through their elected Representatives in the Congress and the force of law ordained to that Congress by the people through the constitution, do hereby enact the following provisions into law:BILL
To
Ensure Market Integrity
1 - Short Title and Enactment
(1) This Act may be cited as the 'Securities Exchange Integrity and Transparency Act.'
(2) This Act shall be enacted immediately upon its signage.
(3) This Act has been authored by Representative Nim.
(4) This Act has been co-sponsored by Speaker Omegabiebel.
2 - Reasons
(1) To enhance investor protection and market integrity within the Commonwealth of Redmont's securities exchanges.
(2) To address loopholes in existing legislation that allow for manipulative trading practices.
(3) There is an ongoing situation where a single entity or group holds a significant majority of a company's stock and is artificially inflating its price through large purchase orders, demonstrating a need for stronger regulations against manipulative practices.
3 - Amendments to the Commercial Standards Act
(1) Amend Section 8 (Securities Fraud) of the Commercial Standards Act to include the following:
“(a) Market Manipulation:
The act of fraudulently inflating or deflating the value of a company or asset of which you have a responsibility for. Any public company which values its own total market value over $500,000 is expected to have a publicly available, detailed explanation, of how they reached that evaluation. Failure to do so may be considered evidence in a market manipulation case.
Any activity, regardless of a direct responsibility for a public company or asset, which is undertaken with the primary intention to artificially influence the price or trading volume of a security for personal gain. Any public company which values its own total market value over $500,000 is expected to have a publicly available, detailed explanation of how they reached that evaluation. Failure to do so may be considered evidence in a market manipulation case.
Individual Fine: Up to $10,000 + Damages + up to 10 mins Jail
(b) Insider Trading:
Buying or selling a stock based on non-public information that would substantially impact a trader’s decision to buy or sell. The act of any use of non-public information obtained through privileged access for personal gain in the purchase or sale of a stock. The act of leaking such information is also included. Any individual partaking in insider trading by use of information obtained through a leak is liable. Any owner of a business that sells stocks of their own company has an obligation to make a reasonable attempt to disclose this information to the shareholders, failure to do so may be considered evidence in an insider trading case.
Individual Fine: Up to $10,000 + Damages + up to 10 mins Jail”
The act of fraudulently inflating or deflating the value of a company or asset of which you have a responsibility for. Any public company which values its own total market value over $500,000 is expected to have a publicly available, detailed explanation, of how they reached that evaluation. Failure to do so may be considered evidence in a market manipulation case.
Any activity, regardless of a direct responsibility for a public company or asset, which is undertaken with the primary intention to artificially influence the price or trading volume of a security for personal gain. Any public company which values its own total market value over $500,000 is expected to have a publicly available, detailed explanation of how they reached that evaluation. Failure to do so may be considered evidence in a market manipulation case.
Individual Fine: Up to $10,000 + Damages + up to 10 mins Jail
(b) Insider Trading:
Buying or selling a stock based on non-public information that would substantially impact a trader’s decision to buy or sell. The act of any use of non-public information obtained through privileged access for personal gain in the purchase or sale of a stock. The act of leaking such information is also included. Any individual partaking in insider trading by use of information obtained through a leak is liable. Any owner of a business that sells stocks of their own company has an obligation to make a reasonable attempt to disclose this information to the shareholders, failure to do so may be considered evidence in an insider trading case.
Individual Fine: Up to $10,000 + Damages + up to 10 mins Jail”
(2) Amend Section 4 (Powers of the Commerce Department) of the Commercial Standards Act to include the following:
“4 - Powers of the Commerce Department
(1) The Department of Commerce is authorized to monitor financial transactions and may publish generalized reporting on transaction statistics.
(2) The Department of Commerce is afforded access to financial institution accounts on request for the purposes of monitoring them for compliance.
(3) The Department of Commerce is empowered to conduct random spot-checks of gaming machines to ensure compliance with the advertised odds. Failure to comply is considered fraudulent trading.
(4) The Department of Commerce is authorized to disband any companies in game which do not meet the requirements to be a company.
(5) The Department of Commerce is authorized to create additional regulations for Securities Exchanges in order to prevent or investigate any suspected illicit activity that could be in violation of regulations.
(6) The Department of Commerce is charged with investigating commerce-related white-collar crimes.
(a) Findings are referred to the Department of Justice for prosecution.
(b) Where it is unclear which department should investigate the crime, the matter will be referred to the Department of Justice.”
4 - Amendments to the Substantial Holdings Act
(1) Amend Section 4 (Disclosure Criteria) with the following:
“4 - Disclosure Criteria
(1) Stock exchanges are required to publish the following shareholding changes:
(a) New Substantial Holding: When a shareholder purchases or receives shares, and becomes a substantial shareholder by doing so.
(b) Change in Substantial Holding: When a substantial shareholder purchases, or sells, transfers, or receives shares, while remaining a substantial shareholder.
(c) Exiting Substantial Holding: When a substantial shareholder sells or transfers shares, and is no longer a substantial shareholder afterwards.”
5 - Severability
(1) If one part of this law is found to be unenforceable or unconstitutional, only the offending part shall be struck, and the remaining parts shall remain in effect.
