FINANCIAL STRUCTURE
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Until the late 1960s, Hong Kong kept its official external reserves in the form of sterling. Holdings were then progressively diversified and, by late 1975, only about
40
per cent was held in sterling, and the balance in several other currencies.
Since the beginning of 1973, transactions between Hong Kong and overseas. countries have been free of all exchange control restrictions.
Banking
Bank deposits increased during 1975 to $36,343 million at December 31, which represents a net increase of 17 per cent over the previous year. Loans and advances increased by 19 per cent to reach $35,075 million at December 31. Monthly bank clearings averaged $32,793 million. Banking statistics for the past three years are shown in Appendix 12.
At the end of 1975 there were 74 licensed banks in Hong Kong with a total of 703 banking offices—an increase of 72 offices during the year. In addition, there were 80 representative offices of foreign banks. Banks in Hong Kong have branches and correspondents throughout the world and offer a comprehensive service of the highest order.
Securities
Under the Securities Ordinance and the Securities (Dealers, Investment Advisers and Representatives) Regulations 1974, anyone wishing to carry on a business of dealing in securities is required to register first with the Commissioner for Securities. At the end of 1975 there were registered: 79 corporate dealers; 1,019 individual dealers including 951 stockbrokers on the four stock exchanges; 38 corporate investment advisers; 66 individual investment advisers; 977 dealers' representatives; and 60 investment representatives. During the year 14 corporations were declared exempt dealers and three corporations were declared exempt investment advisers.
The combined Stock Exchanges Compensation Fund-established for the pur- pose of compensating those who suffer pecuniary loss as a result of default by stockbrokers-amounted to $24.5 million at the end of the year. No calls have yet been made on the fund. As regards dealers other than stockbrokers, the Commissioner for Securities has received a sum of $4.5 million by way of deposit. Like the Compensation Fund, the deposits aim at protecting the investor against any default by dealers. But unlike the Compensation Fund, the deposits are not pooled.
The turnovers for 1975 reported on the four exchanges were: Hong Kong Stock Exchange $2,503.53 million; Far East Exchange $4,724.90 million; Kam Ngan Stock Exchange $2,807.73 million; and Kowloon Stock Exchange $299.02 million. The total of $10,335.18 million is a decrease of 8.1 per cent as compared with the previous year.
One company came to the market by way of introduction. There were no public offers or private placements. At the end of the year the shares of 307 companies, in- cluding 23 overseas companies, were listed on the four stock exchanges.
Early in 1975 the issue of additional shares by companies which had not sought the authority of their shareholders was becoming increasingly prevalent and was