WEDNESDAY, AUGUST 7, 1985
13
+NOTWITHSTANDING THE VALIDITY OF THIS ARGUMENT, WE HAVE TO ACKNOWLEDGE THAT THE PROVISION OF SUCH A COMPENSATION FUND IS MEANT TO ACT AS A ROPE TO RESCUE THOSE WHO WERE DROWNING IN A SEA OF RISK AND UNCERTAINTIES.
+THEREFORE, CARE SHOULD BE TAKEN THAT THE ROPE WOULD NOT TURN AROUND TO TIE OUR OWN NECKS, HE SAID.
MR CHEUNG SAID WITH REFERENCE TO THE MAXIMUM TOTAL PAYMENT PER DEFAULTING SHAREHOLDER WHICH HAD BEEN INCREASED FROM $1 MILLION TO $2 MILLION, THE IMPORTANT QUESTION TO ASK WAS HOW LARGE SHOULD THE FUND BE FÖR ITS PURPOSE?
+ IT IS NOT UNCOMMON AMONG MANY TRADERS NOW THAT THEIR TRANSACTIONS HAVE REACHED A LEVEL OF MULTI-MILLION DOLLARS OF CONTRACT WORTH, IN SPITE OF THEIR RELATIVELY LOW REGISTERED CAPITAL.
+AS THE MARKET GROWS, WE DO NOT NEED TOO MANY CASES TO OCCUR TO WIPE OUT THE FUND AND DEFEAT THE INTENTION OF THE PROPOSED AMENDMENT.
*ONE MAY BEGIN TO WONDER IF THERE IS AS YET ANOTHER NECESSITY TO CREATE ANOTHER NEW FUND.
+WHERE IS THE END OF THIS?
+ONE MAY ALSO WONDER WHAT SHOULD BE DONE ON A MORE POSITIVE BASIS TO PREVENT DEFAULT IN ADDITION TO AFTERMATH TREATMENT.
+I BELIEVE THAT THOSE IN THE COMMODITIES TRADING BUSINESS WOULD NOT OBJECT TO MORE STRINGENT SCRUTINY AND CONTROL PROCEDURES IF COMPENSATION CLAIMS CAN THEREBY BE REALISTICALLY AVOIDED.
+INDEED, I WOULD ADVOCATE SELF-REGULATION BY THE INDUSTRY
WHICH IS WELL-ACQUAINTED WITH TRADE PRACTICES.
*THIS WOULD BE IN-LINE WITH INTERNATIONAL PRACTICE THAT THE TRADE IS MOST EFFECTIVELY REGULATED BY PROFESSIONALS IN THE INDUSTRY,+ MR CHEUNG SAID.
HE SAID WHILE SMALL INVESTORS SHOULD BE PROTECTED TO AN ACCEPTABLE LEVEL, WHICH WAS THE AIM OF THE COMPOSITE AMENDMENT BILL. SHAREHOLDERS SHOULD ALSO BE PROVIDED WITH AN ACCEPTABLE LEVEL OF ASSURANCE SO THAT MORE SHAREHOLDERS WOULD BE ATTRACTED TO JOIN THE COMPANY AND TOGETHER MAKE THE ENTERPRISE MORE PROSPEROUS.
ON THE PROPOSED LEVY SYSTEM, MR CHEUNG SAID HE AGREED IN PRINCIPLE THAT A LEVY WOULD PROVIDE SELF-GENERATING RESOURCES TO THE COMPENSATION FUND, BUT WHEN THE COMMISSION DECIDED THE RATE OF LEVY, IT SHOULD BE AT A LEVEL WHICH COULD YIELD SUBSTANTIAL BENEFIT TO THE FUND BUT WHICH WOULD NOT AT THE SAME TIME CAUSE UNNECESSARY OPERATIONAL BURDEN TO SHAREHOLDERS.
THE GOVERNMENT