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RE: NATIONAL COMPANIES AND SECURITIES LEGISLATION

OPINION

I have been asked a number of questions bearing upon the

legislative capacity of the Parliament of the Commonwealth to

pass valid laws upon the subject matters of the present .

co-operative companies and securities industry codes as well

as that of the Futures Industry Act,  1986.

I shall set out each question and my response to it.

Question 1

Does the Commonwealth Parliament have power unilaterally

to enact laws for the whole of Australia covering the

same matters as are contained in the legislation which

it has enacted for the Australian Capital Territory

Ã¢ÂÂ¢  (pursuant to the Commonwealth-State agreement on companies

and securities matters) in respect of takeovers,  the

securities industry,  fund raising by public companies

and other related Companies Act provisions and the

futures industry?

'  The related Companies Acts provisions are Divisions

1, 2, 4, 5, 6, 7 and 8 of Part IV of the Commonwealth

2.

.  Act; sections 261 and 251A and Division 2 of Part XIII

Included of course is the National Companies and

,  Securities Commission Act, 1979.

An addendum to the brief has asked me whether the

Parliament might validly enact laws relating to the

incorporation, internal management accounts,  audit,

arrangements, reconstructions,  receivership,  official

.  management and winding up of companies including those

formed for the purpose of mining, manufacturing,  Ã¢ÂÂ

holding real estate,  acting as a paid executor and

trustee.or which promote recreation, science,  education

or charity which do not also engage in trade.

I shall deal first with what may be called conventional

Companies Act matters.  By this I mean those set out in the

immediately preceding paragraph beginning with incorporation

and ending with winding up and the nominated divisions and

Parts of the Companies Act, 1981 set out in the paragraph

Ã¢ÂÂ before it. Next 1 shall consider whether the types of

companies expressly mentioned, such as mining and Â·

manufacturing companies and so on, fall within section 51(xx)

of the Constitution if they do not also engage in trade.

Thereafter I shall deal with "takeovers and fund raising by

public companies and last with the securities and futures

industry.

Conventional Companies Act matters

Section 51(xx) confers upon the Parliament power to

pass laws with respect to foreign corporations and trading Â·

or financial corporations formed within the limits of the

Commonwealth.  There are three classes of corporation within .

the power.  They are foreign corporations, local trading Â·

3 .

8 corporations and local financial corporations. The words -"formed within the limits of the Commonwealth" are necessary

because the grant already embraces all foreign corporations,  -that is, all those formed outside the limits of the

Commonwealth and because some local companies were intended

to be embraced as well. Since a foreign company is one

incorporated or formed outside the Commonwealth, a natural

description of local companies is by reference to their place

of incorporation. But such a description does not imply that the

grant excludes power to incorporate the local c o m p a n y I t is

impossible, bearing in mind that the heads of power in

section 51 must "be construed with all the generality which the

words used admit": Rg,  v. Public Vehicles Licensing Appeal

Tribunal (Tas.) (1964) 113 C.L.R. 207 at p.225, and the .

natural meaning of the paragraph to confine the word "formed"

to "formed by the force.of some other legislature".  .

It is obvious that the adjective "financial" does not

refer to economic well being but to the character of the

corporation. So with."trading".  Thus "financial",  "trading"

and "formed within the limits of the Commonwealth" are words

Ã¢ÂÂ¢  descriptive of subject matter. They are words of inclusion

not of exclusion or qualification. It necessarily follows Ã¢ÂÂ

that a law which makes provision for the incorporation within

the Commonwealth of trading and financial corporations is

valid. It is one with respect to trading or financial

corporations formed within the limits of the Commonwealth.

This conclusion is implied in the decisions of the High Court

in State Superannuation -Board v. Trade Practices Commission

(1982) 150 C.L.R. 282 at pp.304-305 and Fencott v. Muller

(1983) 152 C.L.R. 570 at pp.601-602 and was affirmatively

referred to by Murphy J. in Kathleen Investments v. Australian

Atomic Energy Commission (1977) 139 C.L.R. 117 at p.159. The

4,

significance of the first two decisions abovementioned is that

they make explicit the notion that a corporation may be a

trading or financial corporation within the Constitution when

no more has happened but its incorporation; just as it may be

when it has performed a '  significant proportion of trading acts

within its total activities. Thus neither "trading" nor

"financial" in section 51(xx) require a corporation which has

traded or has conducted financial dealings nor any activity for

that matter. See also the Jumbunna Case (1908) 6 C.L.R. 309 at

pp.334 and 355. The contrary views in Huddart Parker (1909) 8

C.L.R. 330 I shall later deal with and the observations in the

Banking Case (1948), 76 C.L.R., for example, were made before

Strickland's Case (1971) 124 C.L.R. 468. .

So understood the power necessarily extends to embrace

any conventional Companies Act. The topic is companies,

but not all companies. So internal management, accounts,

audit, arrangements, reconstructions, receivership, official-

management and winding up all fall within- the power because

laws about these things deal with characteristics -of company

life and the resolution of the consequences of and the

adjustments of rights resulting from incorporation.  Of course

section 51(xvii) would enable a law to be passed providing

for the winding up of every type of company and the

application to them of bankruptcy provisions as extensive

as those in the Bankruptcy Act.

The views I have just expressed about the corporations

power would have been those of Griffith C.J. in the Huddart

Parker Case (1908) 8 C.L.R. 330 at p.348 but for his adherance

to the reserved powers doctrine now long since exploded.

They are, I think, supported by remarks of Mason J. (see

Tasmania v. Commonwealth (1983) 57 A.L.J.R. 450 at 495-497)

5 .

and of Deane J. (Tasmania v. Commonwealth (supra) at p.549). - Ã¢ÂÂ

I incorporate in this Opinion paragraphs 5 to 7 inclusive of that

I gave as Solicitor-General on this topic on 3 January,  1974.

Those paragraphs are concerned to rebut the views expressed

by Sir Isaac Isaacs in the Huddart Parker Case (supra) by

reference to subsequent decisions. I affirm what I then '

said.

Companies Act 1981, Divisions 1, 2, 4, 5, 6, 7 and 8 of

Part IV, sections 261 and 261A, Division 2 of Part XIII

Divisions 1, 2, 3 and 4 of Part IV govern prospectuses

for share and debenture issues and their contents;  shares,

their allotment,  rights,  classes of holders and their rights

and substantial shareholdings and their consequences;

Division 5 concerns debentures;  Division 6, prescribed

interests;  Division 7, title to and transfer of shares;

Division 8, transfer of marketable securities including

securities issued by a body corporate not being a company or

by an unincorporated society or association;  (definition of

"marketable security" and "prescribed corporation" in

section 189). I confine my opinion to so much of this

Division as relates to the shares and debentures of companies.

Whether or not a body incorporated in the State which was not

a company falls within section 51(20) depends on what- it was

incorporated for or does. .(I deal later with section- 51(1) ).

Sections 261 and 261A empower companies to secure information

as to the beneficial ownership of their sharesÃ¢ÂÂ  Division 2 of

Part XIII controls the borrowing, investment and underwriting

powers of investment companies.  That is, those engaged

primarily in the business of investment in marketable

securities for revenue and profit.

Cnee the corporations power is seen to embrace the

incorporation of trading and financial corporations,  that is,

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once it is seen to apply internally as well as externally,  laws

about shares,  their creation,  transfer,  the rights they give as

to dividend, on a winding up and generally, necessarily fall

within the power,  So too do the corporation's raising of

public funds of which the issue of shares and debentures forms

one aspect,  the preservation of its capital as a fund to

satisfy its creditors and the competing rights of creditors

and shareholders.  Such laws write out the nature of the

corporation which the power enables the Parliament to create.

A recognition that the power is one about persons as both

Mason J .  and Deane J .  acknowledge (see above) and indeed as

the grant itself proclaims entails assent to the validity of

laws of the character in the various Divisions and sections

elaborated above in their'operation upon trading or

financial corporations and upon foreign companies.

(Excluding as to the latter,  initial foreign incorporation).

The power over foreign corporations while no doubt assuming

their existence has otherwise no limit but the relevance to the

power of the practical application of the law.

Subject therefore to the reservation as to Division 8

expressed above the Parliament may make laws of this type

applying to foreign,  financial and trading corporations.

Mining and Manufacturing Companies

'  If a mining company sells its product it is clearly a

trading corporation whether it makes a profit or a lossÃ¢ÂÂ  The

sole reason to mine is to sell the product.  The expression

"trading corporations formed within the limits of the

Commonwealth" does not distinguish between trade and

business any more than "financial" distinguishes between

pawn-brokers and merchant bankersÃ¢ÂÂ  Any corporation that makes

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a vendible article to sell it is a trader by whatever process

the article is produced. And as has been pointed out "a

corporation may be a financial as well as a trading corporation"

(State Superannuation Board v. Trade Practices Commissioner

(supra) at p .303); and that, for constitutional purposes trade

cannot be confined to dealing in goods and commodities .

(Rg, v. Federal Court of Australia (1979) 143 C.L.R. 190

at p .209) and has the content it is now recognized as having

(at ÃÂ Ã¢ÂÂ233).

The Hydro-Electric Commission which made and sold

electricity was held, despite its semi-governmental character,

to be a trading corporation in Tasmania v, Commonwealth

(supra).  The two types of commercial activity we are

considering make the companies which carry them trading

corporations within the Constitution as explained in the Â· Â· '

decisions I have mentioned.

Real estate and commercial trustee companies '

If the real estate company engagesÂ· in commercial

activities in relation to the estate,  such as obtaining

tenants, keeping the property in repair and so on, it is a '

trading corporation. It is impossible to say that a corporation

which stages football' matches is a trading corporation because the

players are professionals and the crowds are large and a manager of Ã¢ÂÂ

/realty is not.  So too a professional executor and trustee,  each

one of whose activities is commercial so far as he is

concerned.  See State Superannuation Board Case (supra) at

p.305.

Recreational, Scientific, Educational and Charitable

Companies Ã¢ÂÂ

If trading or commercial activities do not form a

significant part of the total activities, none of the above

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companies fall within the powerÃ¢ÂÂ  The analogy is the W .A ,

National Football League Case (supra).

Takeovers Ã¢ÂÂ

What is involved here is a trading activity by a

trading corporation. If therefore the offeror directly or

indirectly is a constitutional corporation, the takeover falls

squarely within power. If the target company is a trading or

financial corporation, the takeover may be regulated

independently of the identity of the offeror. This is

because the law is about an essential aspect of or feature of

corporate personality, namely, the purchase or dealing in

shares. The fact that individuals may own all or the

majority of the shares in the.target company is irrelevant to

the attraction of power, because that is derived from the

identity of the target company and the nature of the activity,

that is, the acquisition of shares in such a company.

The interstate communication of the offers would fall

within section 51(i) as of the acceptances: McGraw - Hinds

(Aust.) ?ty. .  Ltd. v. Smith (1979) 144 C.L.R. 633. If sent

by post section 51(v) would authorise a law regulating its

contents and the circumstances under which it might be sent.

Both these powers apply, of course, whatever the character of

the sender or recipient. The substance of Parts II, III,

IV, V and VI of the Acquisition of Shares Act could be made

to apply to all companies in relation to the making of any

take-over offer interstate by any company. The same effect

could be achieved in relation to postal or telephonic offers

under section 51(v). Section 51(xx) would sustain.like

provisions where the target company was a foreign, trading

or financial corporation whatever the identity of the offeror

and the shareholders of the target company. Where a

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constitutional corporation was the offeror,  its offers would .

be trading operations and on the narrowest present view of the

power could be regulated as the present statute provides,

whatever the identity of the target company or its shareholders.

Fund raising by public companies '  '

As to constitutional corporations 1 have already

earlier in this Opinion said that the power exists.

Where interstate communications are involved sections 51

(i) and 51(v) apply in manner 1 have described in relation to

takeovers. Where the passage of credit is involved across'

State boundaries section 51 (i) applies so as to allow the

regulation of the conditions under which that passage is

allowable. If the postal or telephonic services are resorted

to conditions of every character whether within or outside

power, may be imposed upon transmission :  Herald and Weekly

Times v. Commonwealth'  (1966) 115 C.L.R. 418 at pp.433-434. Of

course, section 51(v) may be used in the same way upon the

transmission of takeover offers, thatÂ· is, a prohibition of

transmission may be'.released upon the existence of seated

conditions, such as the presence of those in the present

legislation, being established by the offeror or others. I

should here deal with the extent to which other powers than

section 51(20) may be used to support a national Companies

Act. I shall not repeat my reference to takeover offers and

fund raising just mentioned.

Section 51(XVII) "  .

There is no doubt of the application of this

paragraph to companies :  Victoria v. Commonwealth (1957) 99

C.L.R. 575 at p.612 and the cases there cited. And the power

is exercised where measures are' taken to ensure the equitable

10.

distribution of a debtor’s estate among his creditors :

Storey v. Lane (1981) C.L.R. 549 at pp.556-557. Thus

provisions regulating receiverships to secure this end would

be authorised by the power. Such ancillary laws might

lawfully apply to every type of company. This power would

extend to like provisions relating to official management and

reconstructions and schemes of arrangement.  It would also

sanction measures to recover from directors.and servants of the

company sums appropriated by them to the detriment of creditors’

rights to equitable distribution of the company’s assets or

distributions of capital made to' shareholders under the guise

of dividends or made when the effect of a declaration of

dividend was to ensure the company’s insolvency.

While the content of the power is not determined by what

fell within the concept in 1901,  I find somewhat elusive the

notion that it extends to measures designed to prevent

bankruptcy.  A general law to be prudent in one’s financial

dealings hardly seems,  without more,  one with respect to

bankruptcy,  though if heeded it would in many cases have that

effect.  The trouble with this notion is that the paragraph

refers to the rules for determining the existence of bankruptcy,

the administration of estates and the discharge of debtors. I

don't think the power alone or read with section 51(39)

authorizes a law to secure the opposite. Certainly not one in

general terms.

Section 51(1) .

There is no longer any doubt that this paragraph extends

to the incorporation of a proposed interstate or overseas

trading corporation for such trade by the Commonwealth:  '

Australian National A.irways v. Commonwealth (1945) 71 C.L.R. 29

It would,  I think, extend to a law which required a person

11.

proposing.co or engaged in interstate or overseas trade

to do so by means of a body corporate formed,  regulated and

answerable to its creditors in accordance with company laws

of the type earlier discussed in.relation to. section 51(XX).

Such a law could validly apply to a corporation already so

engaged. In result this power could apply section 51(XX) to

companies engaged in section 51(1) trade or proposing to do so.

But since they would undoubtedly be trading corporations the

role of the paragraph could only be subsidiary.

Sections 51(XIII) and (XIV)

While the reference to incorporation of banks in the

banking power suggests that reliance on this power would

presently be unwise,  (see Actors & Announcers Equity

Association v. Fontana (1982) 150 C.L.R. 169 at p .182), the

same does not apply to the insurance power.  The subjectÂ· matter

would extend to the character of those desiring to conduct

this activity and hence laws for their incorporation and

constitution :  Insurance Commissioner v. Associated

Dominions Assurance Society ?tv.  Ltd. (1953) 89 C.L.R. 73.

Nor does the language of Fullagar J .  in this case suggest that

he really doubted that such laws could govern the winding up of

an insurer (see the report at p.88). The other constitutional

powers, for example, bills of exchange, copyright and patents

are peripheral at best.  .

The Securities Industry

The present legislation forbids persons to carry on

the business of dealing in securities unless they are licensedÃ¢ÂÂ

A dealer is one who buys or sells or underwrites securities

or offers to do so or endeavours to induce others to buy or

sell them :  Act sections 4(1) and 43. The same' prohibitions

are directed-against advisers (section 45) and representatives

12.

of dealers or adyisers (sections 44 and 46). Securities include

in addition to debentures, shares, stocks, bonds or notes issued  :  .  Ã¢ÂÂ   as those

or proposed by bodies corporate those as wellÂ·/ of governments and

unincorporated bodies and prescribed interests. (section 4(1) ),

This last phrase is very widely defined :  see "participation

interest" and "investment contract" (section 4(1) ) and option

contracts (section 4(8A) ). The Commission may conduct or

appoint inspectors to conduct investigations into matters

relating to dealings in securities if the Minister so certifies

and specifies. Setting up a stock exchange except as approved

is prohibited (sections 37 to 38B).  The Commission may prohibit

trading in particular securities to protect those buying or

selling them (section 40). Dealers must disclose their

personal interests and are not to deal as principals (sections

65 and bo). Short selling (section 68) and the use of clients' '

money (section 67) are regulated and dealers are subject to audit

and their accounts regulated (sections 71 to 79), a fidelity fund

requiring contributions by dealers and the exchange is required

(section 94A to ill). Undesirable market manipulation and

trading is prohibited. (sections 123 to 128) .  Â·

1 shall deal first with constitutional power, then with

constitutional prohibition (section 92), Ã¢ÂÂ

Section 51 (XX) Ã¢ÂÂ   '  "

1 think this power understood in the sense 1 have

explained at the outset extends to authorize laws regulating

the manner in which shares .may be sold. This comprises who may

publicly engage in their public sale and under what conditions,

provided the aim is to secure a fair market exchange. The .

dealing in shares of constitutional corporations is a step

removed from the centre of the power; Â·  hence the relationship

to the power should not be dislocated or made tenuous or

13.

doubtful by the introduction of factors extraneous to the '  s .

relationship berween trading in company shares and the

company.  That is, the fact that what is in exchange is a -

contract between the shareholder and the company. Hence the

interposition of an administrative discretion between the

.  dealer and the right to trade is a step of crucial importance,

I think the present section 48, although paragraphs (III)

(IV) and (V) leave ambiguous areas,  does not destroy that

k connexion between the power and licence (that is the prohibition)

|  and would be valid even if section 92 were raised. The same

.  applies to sections 49, 50, 51 and the remaining licensing

sections. "

Section 51(1) .

If the transaction between seller and buyer of shares

involves interstate communication, it, to that extent,  falls

within the power.  So too if it requires the interstate

movement of credit or the transfer of shares from a registry

in one State to that in another.  In each such case the'dealer

is engaged in interstate trade without more because he is

1  ’  participating in interstate commerce,  however State bound he .

may appear to be. See Haddart Parker v. Commonwealth 15 "

(1931) 44 C.L.R. 492 at 515, 528; R, v. Wright (1958) 93

C.L.R. 523. cf. Roughly v. N.S.W, (1928) 42 C.L.R. 162.

Ã¢ÂÂ   So too if his dealings require interstate negotiations or credit

flow (see above).  Ã¢ÂÂ   Ã¢ÂÂ

The same reasoning applies probably with greater Ã¢ÂÂ

liberation to overseas or ex-Australian transactions.

Unless the State securities have as to their sale an

interstate or overseas element they lie, except for Commonwealth

securities as to purchase and sale, outside this power.  The

14.

purchase by a Victorian,  for example,  of a New South Wales

security on a New South Wales register, embodies interstate

elements sufficient, I think, to attract the power. That

is, the purchase is an interstate contract the obligations

and enforcement of which are enough to attract section 51(1):

Australian Coarse C-rains Barley Case (1985) 59 A.L.J.R. 516 at

ÃÂ.527. The same is more clearly the case where the

government is an ex-Australian one or where overseas

negotiations (offers and so on) are involved.

Given the transaction that attracts the power, the Ã¢ÂÂ

method of regulation of it is also attracted. The licences,

the Fidelity Fund, the stock exchange and so on are means by

which the -buying ana selling Interstate of shares, debentures, '

Government bonds and the other interests mentioned in the

legislation are regulated to secure the safety of those who

buy and sell through dealers. The dealers when they buy and

sell themselves engage in such commerce and may be licensed

because they carry on an interstate business of a commercial

nature. The power being with respect to chat commerce may,

subject to section 92, either prohibit it or encourage it or

subject it safeguards. See R e d f e m  v, Dunlop Rubber (1964)

110 C.L.R. 194 at pp.219-220; Actors & Announcers Equity v.

Fontana (supra) at ÃÂ.183, '

Section 92 .

.  The licensing provisions are those at risk because of

the prohibitions in sections 43, 44, 45 and 46. The effect of

section 62 is to require a hearing before the grant of a

license may be refused, revoked or suspended or its conditions

varied or ones imposed or the license restricted. The

conditions of the license (section 51(2) ), the criteria for

grant or revocation seem regulatory only :  see Boyd v. Carah

15.

Coaches (1979) 145 C.L.R. 78 at p .93. The Fidelity Fund

contribution is made to meet dishonesty and, although an

exaction,  is a reasonable regulation of a trade in which

defalcations or financial collapses have occurredÃ¢ÂÂ  The

present content of section 92 is u n c e r t a i n b u t there is

no discrimination against interstate trade and provisions of

this character will,  I think, be held to be valid.

Section 51(V)

This power may be exerted.to set conditions on the

transmission of offers, sale notes and the like in the

manner indicated in relation to takeovers and public fundingÃ¢ÂÂ

The Futures Industry

The Futures Industry Act,  1986 approaches this industry

in much the same fashion as the Securities Industry Act

approaches that industry. Brokers are to be licensed,.

investigations may be carried out, conditions are sec by

reference to which a licence may be granted analogous to

those in a he Securities Industry Act.  Advisers must be Ã¢ÂÂ   .

licensed, the conditions of grant being the same as for brokers,

and representatives of brokers and advisers also on less

'  stringent conditions. Conditions for revocation are set and a

hearing required. Accounts must be audited and a Fidelity Â·

Fund constituted. Futures Exchanges,  Clearing Houses and

Associations are provided for and made subject to approval.

Futures brokers are those who as a matter of business deal in

futures contracts whether or not also on their own behalf.

Futures advisers are those who advise as a matter of business

orÂ· publish advisory literature . Ã¢ÂÂ   A futures contract is an

agreement,  or what has been such, for the sale of something

capable of delivery where under delivery obligations.are

16.

are accepted or imposed -which are not likely to be

dischanged. The various definitions elaborate this notion.

From this brief recital it is obvious that only

section 51(1) of the Constitution could wholly.support the

necessary laws. The transactions must therefore occur in

interstate or overseas trade or commerce. This requires that

the contracts must require delivery across State boundaries or

involve interstate offers or the passage of money or other

considerations across State boundaries or be made between

brokers in different States and in that sense involve the

brokers in interstate commerce as contract makers or be made on

behalf of persons in different States. The power is also

attracted if overseas offers or acceptances are made, overseas

delivery is required in the documents or overseas brokers and

local brokers are involved.

1 think the substance of the Act could be passed under

this power. The setting up of the exchanges,  clearing houses

.and so on are but means of.regulation and thus comprised in

the grant, " "

Section 51 (V) would operate in the manner I've explained

in relation to takeovers and the security industry. If

financial or trading corporations act as principals or brokers

those powers are likewise available as is the banking power

if banks act as principals or brokers and section 51(X11) if '

local or foreign currency is the subject of the futures

contract or necessary to perform it.

If the.licensing criteria are regulatory section 92

will not affect it or the audit, accounts or fidelity

provisions.

17.

I 'answer this question as above. I should add that

the Commission forms part of the regulatory processes and it

and the various fees Acts fall within the above powers.

Question 2

Does the Commonwealth Parliament have power

unilaterally to enact laws for the whole of Australia

covering the following matters in respect of which it

is proposed to legislate for the Australian Capital

Territory in 1987 pursuant to the Commonwealth-State

'  Agreement Ã¢ÂÂ

Ã¢ÂÂ   (i) the proposed Australian Stock Exchange? Ã¢ÂÂ

(ii) the proposed National Stock Exchange Ã¢ÂÂ

Ã¢ÂÂ   Guarantee Fund?

(iii) the proposed National Stock Exchange Clearing

House?

The 'main features of the proposals are outlined in the

Exposure Draft of the Companies and Securities Legislation

Amendment (Clearing Houses) Sill 1935 prepared by the

Business Affairs Division of the Commonwealth Accomey-

Generals Department in June 1986. The Draft also contains

draft legislation and a clause by clause commentary.

Australian Stock Exchange '  .

The Australian Exchange will be provided by a body

corporate, subsidiaries of which will provide the various

State stock exchanges. The proposed National Guarantee Fund

will-be the responsibility of the"Australian Exchange. '

1 think it likely that the conduct of a stock exchange

would constitute the corporation conducting it as trading or

financial corporations to which the administration of the

18.

Fund would considerably contribute,  But the power extends.

to the establishment of exchanges where shares of

constitutional corporations are traded,  If interstate

or overseas transactions are involved,  section 51(1) also

applies as would the banking and insurance powers to trade

in the shares of banking or '  insurance companies.  However

almost all companies whose shares are quoted would be

trading, financial or foreign corporations so that section

51(XX) and perhaps section 51(1), (XIII) and (XIV) would

support the contemplated law.

The.Fund and Clearing Houses Ã¢ÂÂ

The object of the Fund is the protection of those

buying or selling quoted securities ("prescribed securities"

clause 122A) as principal or broker.  This- clearly falls

within section 51(XX) where the shares are of constitutional

corporations or banking or insurance companies or where the

sales are interstate or overseas sales (sections 51(1)

(XIII) and (XIV) ). .

The clearing houses obviously aid sales of shares and

other securities of such companies and '  are within power.Â· Ã¢ÂÂ

I answer this question as above.

I have been greatly assisted by the Background Paper on

Companies and Securities Legislation.

Chambers,

22 December,  1986,

