FRIDAY, JANUARY 27, 1984
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SCOPE OF TRUSTEE INVESTMENTS WIDENED
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TRUSTEES HAVE BEEN GIVEN A SLIGHTLY WIDER CHOICE OF INVESTMENTS AS A RESULT OF AN ORDER MADE BY THE GOVERNOR IN COUNCIL AND PUBLISHED IN THE GAZETTE TODAY.
THE CLASSES OF INVESTMENT WHICH THE ORDER NOW ADDS BY AMENDING THE SECOND SCHEDULE TO THE TRUSTEE ORDINANCE, INCLUDE ADDITIONAL HONG KONG AND UNITED KINGDOM STOCKS AND SECURITIES, AS WELL AS BILLS, NOTES AND BONDS ISSUED BY THE UNITED STATES TREASURY.
COMMENTING ON THE ORDER, A GOVERNMENT SPOKESMAN EXPLAINED THAT SINCE TRUST INSTRUMENTS WERE GENERALLY DRAFTED TO PROVIDE WIDER INVESTMENT POWERS, PROBABLY ONLY A FEW TRUSTS WERE IN PRACTICE BOUND BY THE SECOND SCHEDULE.
THE AMENDMENTS, HE ADDED, HAD BEEN PROPOSED AFTER A THOROUGH REVIEW WHICH TOOK INTO ACCOUNT THE VIEWS OF INTERESTED PROFESSIONAL BODIES.
+THE AIM WAS TO CONTINUE TO PROVIDE A SATISFACTORY RANGE OF INVESTMENTS BUT WITHOUT, SO FAR AS COULD REASONABLY BE EXPECTED, ALLOWING EXPOSURE TO UNDUE RISK, + HE SAID.
THE SCHEDULE, HE INDICATED, WOULD BE REVIEWED FROM TIME TO TIME, AS CIRCUMSTANCES REQUIRED.
HE ALSO SAID THAT IN CASES WHERE INVESTMENTS BY A GOVERNMENT-SUBVENTED ORGANISATION WERE SUBJECT TO THE APPROVAL OF THE FINANCIAL SECRETARY, THE FINANCIAL SECRETARY WOULD CONTINUE, AS A MATTER OF ADMINISTRATIVE PRACTICE TO CONFINE HIS APPROVAL TO INVESTMENTS LISTED IN THE SECOND SCHEDULE TO THE TRUSTEE ORDINANCE, UNLESS THERE WERE SPECIAL AND COMPELLING REASONS FOR ACTING DIFFERENTLY.
AT THE SAME TIME, THE ORDER RAISES FROM $30 MILLION TO $100 MILLION THE MINIMUM SHARE CAPITAL REQUIREMENT FOR HONG KONG COMPANIES WHOSE SECURITIES MAY QUALIFY AS TRUSTEE INVESTMENTS.
ALSO, THE QUALIFYING CRITERION REQUIRING SUCH A COMPANY TO HAVE A FIVE-YEAR RECORD OF DIVIDEND PAYMENTS HAS BEEN MODIFIED BY STIPULATING THAT EACH SUCH PAYMENT MUST HAVE BEEN IN CASH, EXCEPT TO THE EXTENT THAT SHAREHOLDERS MAY THEMSELVES HAVE OPTED TO ACCEPT IT OTHER THAN IN CASH.
THE CLASSES OF INVESTMENT ADDED TO THE SECOND SCHEDULE MAY BE SUMMARISED AS FOLLOWS1
* VARIABLE-INTEREST UK GOVERNMENT STOCKS AND CERTAIN
OTHER VARIABLE-INTEREST SECURITIES IN THE UK;
* CERTAIN QUOTED UK COMPANY SECURITIES:
*
*
BILLS, NOTES AND BONDS ISSUED BY THE UNITED STATES TREASURY;
UNIT TRUSTS AND MUTUAL FUNDS THAT ARE AUTHORISED BY THE SECURITIES COMMISSION IN HONG KONG :
* DEPOSITS WITH LICENSED DEPOSIT-TAKING COMPANIES.
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