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Wednesday, February 13, 1974
SECURITIES BILL PASSES WITH AMENDMENTS
Hong Kong's stock exchanges will now be required to contribute
to only one common compensation fund instead of setting up their own
individual funds for the protection of investors.
This is provided in the amended Securities Bill which passed its third
and final reading in the Legislative Council today.
The amendment to the part dealing with the compensation fund scheme
was one of many moved by the Financial Secretary, Mr. Philip Haddon-Cave.
"In principle," Mr. Haddon-Cave said, "the compensation scheme
is simply a form of insurance to protect the investor up to a stated level
in case a member of a stock exchange defaults, and the fund from which
compensation is to be paid is to be made up of a contribution from nach
of the exchanges on the basis of a uniform sum for each individual member."
Although the scheme as originally proposed in the bill was
substantially changed, the Financial Secretary emphasised "the basic
principles have boon maintained."
Under the bill, each exchange is obliged to deposit with the
compensation fund in respect of each of its members a sum equal to
$25,000 in cash and an irrevocable bank guarantee for a further $25,000.
However, in respect of this latter requirement, the Commission for
Securities may exempt an exchange from compliance if it is satisfied that
the exchange is operating a satisfactory guarantee system protecting its
own members,
/Mr. Haddon-Cave
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