(1) Subject to the section and any guidelines made by die Commission, a person shall not sell securities to a purchaser unless, at the time when the securities are sold that person

(a) has or, where selling as an agent, the principal has; or

(b) believes on reasonable grounds as having or when selling as an agent, that the principal has an existing exercisable and unconditional right to vest the securities in the purchaser.

(2) A person who contravenes subsection (1) commits an offence and is liable on summary conviction to a fine of not less than one hundred penalty units and not more than one hundred and fifty penalty units or to a term of imprisonment of not less than six months and not more than one year or to both.

(3) For the purposes of this section, a person sells securities where that person

(a) implies die sale of securities;

(b) offers to sell securities;

(c) poses as entitled to sell securities; or

(d) instructs a broker-dealer to sell securities.