23
TUESDAY, JULY 24, 1984
MEMBERSHIP CRITERIA CHANGE ENDORSED
******
THE EXECUTIVE COUNCIL TODAY ENDORSED THE SECURITIES COMMISSION'S RECOMMENDATIONS FOR CHANGING THE MEMBERSHIP CRITERIA OF THE STOCK EXCHANGE OF HONG KONG LTD (UNIFIED EXCHANGE). IT ALSO DIRECTED THAT LEGISLATION TO GIVE EFFECT TO THE RECOMMENDATIONS SHOULD BE INTRODUCED IN TIME FOR THE OPENING OF THE UNIFIED EXCHANGE NEXT YEAR.
A GOVERNMENT SPOKESMAN EXPLAINED THAT UNDER THE STOCK EXCHANGES UN IF ICATION ORDINANCE, CORPORATIONS AND FIRMS ARE DISQUALIFIED FROM MEMBERSHIP. DIRECTORS AND EMPLOYEES OF A LICENSED BANK OR DTC ARE ALSO DISQUALIFIED, AS ARE PRACTISING LEGAL PROFESSIONALS AND ACCOUNTANTS UNLESS THEY WERE MEMBERS OR ASSOCIATE MEMBERS OF ONE OF THE FOUR EXCHANGES BEFORE THE COMMENCEMENT OF THE STOCK EXCHANGES UN IF ICATION ORDINANCE.
IN RESPONSE TO THE REQUEST FROM THE COMMITTEE OF THE UNIFIED EXCHANGE, THE SECURITIES COMMISSION SET UP A SPECIAL COMMITTEE IN FEBRUARY 1983 TO REVIEW THE MEMBERSHIP ISSUE. THE COMMITTEE FOUND THE MEMBERSHIP CRITERIA IN THE ORDINANCE AT VARIANCE WITH THE EXISTING MEMBERSHIP SITUATION. THE COMMISSION, AFTER HAVING WIDE CONSULTATION WITH THE FINANCIAL SECTOR AND OTHER INTERESTED PARTIES, RECOMMENDED THE REMOVAL OF THE EXISTING DISQUALIFICATIONS AND THE INTRODUCTION OF NEW MEMBERSHIP CRITERIA MORE IN LINE WITH THE PRESENT DAY NEEDS OF THE SECURITIES INDUSTRY.
THE SPOKESMAN SAID THAT IN FUTURE THERE WILL BE THREE TYPES
-- INDIVIDUAL MEMBERS, OF TRADING ENTITIES FOR THE UNIFIED EXCHANGE - CORPORATE MEMBERS AND PARTNERSHIPS, AND TWO TYPES OF MEMBERSHIP INDIVIDUAL AND CORPORATE.
THE CRITERIA FOR INDIVIDUAL MEMBERS WILL REMAIN UNCHANGED THOUGH A THREE-YEARS' EXPERIENCE REQUIREMENT WILL BE IMPOSED. ANY HONG KONG CORPORATION WHOSE ONLY BUSINESS IS STOCK BROKING MAY BE ELIGIBLE FOR MEMBERSHIP. SUBSIDIARIES OF CORPORATIONS, INCLUDING THOSE OF BANKS AND DTCS, SET UP FOR THE PURPOSE OF STOCK BROKING BUSINESS WILL BE REQUIRED TO HAVE SEPARATE MANAGEMENT AND SEPARATE OFFICES.
STRINGENT FINANCIAL REQUIREMENTS AND DETAILS OF ADMISSION WILL BE SET OUT IN THE ARTICLES OF ASSOCIATION OF THE UNIFIED EXCHANGE.
ANOTHER SIGNIFICANT CHANGE IS THAT MEMBERS OF THE UNIFIED EXCHANGE WILL IN FUTURE BE ALLOWED TO FORM PARTNERSHIPS WITH OTHER MEMBERS OF THE EXCHANGE OR LIMITED PARTNERSHIPS WITH
NON-MEMBERS.
/THE SPOKESMAN ................