Parliament passed three securities statutes in 2015 as a package: the Central Depositories Act (No 63), the Securities Commission Act (No 64) and the Capital Market Act (No 66). They replaced a single 1997 Act that had grown out of date. Anyone dealing with a unit trust will meet all three, but the second and third do most of the work.
The Securities Commission Act 2015
The Securities Commission Act 2015 is about the regulator itself. Its Parts are:
- Part I — preliminary and definitions, which mostly borrow from the Capital Market Act.
- Part II — the Securities Commission: establishment as a body corporate (section 4), independence (section 6), objectives (section 7), functions (section 8), and the Board, Chairman, Chief Executive Officer and staff.
- Part III — powers: the general power in section 38, the power to exempt any person from any provision of the three Acts (section 39), the power to direct banks to freeze accounts and hand over records (section 40), and agreements with other regulators (section 42).
- Part IV — finance: the Commission’s fund, levies, accounts and annual report.
- Part V — investigations, examinations under oath and public or private inquiries, with offences for obstruction.
- Parts VI and VII — notices to auditors and to produce books; prosecutions, general penalty, secrecy (section 113), review of decisions (section 111) and appeals to the National Court on questions of law (section 114).
- Parts VIII and IX — repeal of the Securities Act 1997, the Securities Regulation 1998 and the Takeovers Code 1998 (section 117), and transitional provisions preserving existing licences, approvals and proceedings (sections 118–123).
The Commission shall “be responsible for the administration of the relevant Acts” and shall “license, regulate, monitor and supervise the conduct of business activities in the securities and derivatives market”.
The 2023 amendment
The Securities Commission (Amendment) Act 2023 (No 28 of 2023, certified 16 May 2024) replaced Part II entirely. The original Act placed executive power in a full-time Chairman supported by Commissioners chosen by a Securities Appointment Committee; a dispute over who lawfully held the chair reached the National Court in Oil Search Ltd v Tongayu [2021] PGNC 22; N8785. The amended Part II separates governance from management. A Board of seven—the Governor of the Bank of Papua New Guinea, the Secretaries for Treasury and for Commerce and Industry, a lawyer and three capital market experts—sets policy, and a Chief Executive Officer appointed for up to four years runs the Commission. The amendment also widened section 38, let investigating officers act under all three securities Acts (section 55), repealed the Commission’s power to compound offences under section 105, and reworked the review and appeal route so that a person aggrieved applies to the Board within 30 days (section 111) and may then appeal to the National Court on a question of law (section 114). See how the Commission is governed and challenging a Commission decision.
The Capital Market Act 2015
The Capital Market Act 2015 (No 66 of 2015) has 470 sections and nine Schedules. It commenced on 15 December 2017 by Gazette notice.
| Part | Subject | Sections |
|---|---|---|
| I | Definitions; prescription of securities and derivatives | 1–7 |
| II | Stock and derivatives exchanges, clearing houses | 8–33 |
| III | Capital market licences, conduct of business, client assets, audit | 34–115 |
| IV | Issues of securities: approvals, prospectuses, debentures | 116–182 |
| V | Unit trusts and managed investment schemes | 183–275 |
| VI | Takeovers and mergers | 276–297 |
| VII | Market misconduct: manipulation, false statements, insider trading | 298–335 |
| VIII–IX | Systemic risk; Compensation Fund | 336–373 |
| X–XII | Disclosure of interests and substantial holdings | 374–417 |
| XIII–XIV | Self-regulatory organisations; Capital Market Development Fund | 418–442 |
| XV–XVI | Administrative and civil actions; general, regulations, guidelines | 443–470 |
For a unit trust, Part V is the core, but Part III governs the trustee’s licence, Part IV governs the prospectus, Part VII protects unit holders against manipulation and insider trading, and Part XV gives the Commission administrative penalties and civil remedies. Most serious offences carry a fine of up to K10 million or ten years’ imprisonment, or both. See offences and penalties.
The Central Depositories Act 2015
The Central Depositories Act 2015 (No 63 of 2015) provides for a central depository approved by the Commission (section 5) to hold securities electronically so that trades settle by book entry rather than paper certificates. It covers securities accounts, a register of depositors, authorised depository agents, secrecy, a Guarantee Fund (section 56), investigations and offences. Section 28 applies the Act to unit trust schemes, so units in a listed scheme can be held and transferred through the depository. See what a central depository is.
How the three Acts fit together
Section 2 of the Securities Commission Act, as amended, defines “securities law” as the three 2015 Acts together, and section 38(4) requires the Commission to act independently under all of them. The Commission draws its existence and investigative powers from its own Act, enforces the substantive rules in the Capital Market Act, and supervises the depository under the third. Rules, guidelines and orders made under any of them count as part of the Act (Capital Market Act section 2(2)).
Both Acts came into operation by notice in the National Gazette. The Capital Market Act commenced on 15 December 2017. The Securities Commission Act is in force, but its commencement date is not readily confirmed from public sources; where the date matters—for example, in deciding whether a 2017 approval was given under the old or new Act—check the Gazette or ask the Commission.
Sources
- Securities Commission Act 2015 — ss 2, 4–8, 38–40, 42, 55, 105, 111, 113, 114, 117–123; Securities Commission (Amendment) Act 2023
- Capital Market Act 2015 — s 2(2); Parts I–XVI
- Central Depositories Act 2015 — ss 5, 28, 56
- Oil Search Ltd v Tongayu [2021] PGNC 22; N8785
Before relying on anything here, read the current text of the Capital Market Act 2015 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.