29
WEDNESDAY, JULY 25, 1990
"IT WOULD
BE UTTERLY
UNFAIR TO EXEMPT INSIDER DEALING BY MAJOR SHAREHOLDERS SIMPLY FOR THE SAKE OF MARKET LIQUIDITY.
"THIS WOULD NOT BE IN THE INTEREST OF THE INVESTING PUBLIC AND WOULD TARNISH THE IMAGE OF HONG KONG AS AN INTERNATIONAL FINANCIAL CENTRE.
"IF THE BILL IS TO HAVE ANY REAL DETERRENT EFFECT, IT MUST APPLY EQUALLY TO ALL INVESTORS.
**
MR NENDICK SAID A NUMBER OF MEASURES WERE CURRENTLY BEING DEVELOPED WHICH WOULD SIGNIFICANTLY IMPROVE THE LIQUIDITY OF THE MARKET.
THESE INCLUDED PROPOSALS TO ALLOW THE BUYBACK OF SHARES BY LISTED COMPANIES, STOCK LENDING AND BORROWING FREE OF STAMP DUTY AND
SHORT-SELLING.
"THE FIRST TWO OF THESE PROPOSALS ARE IN FACT CLOSE TO BEING FINALISED AND IN RECOGNITION OF THE CONCERN OF THE SECURITIES INDUSTRY THE AD HOC GROUP, WE HAVE AGREED NOT TO BRING THIS BILL INTO OPERATION UNTIL THEY HAVE BEEN IMPLEMENTED.
AND
"DRAFT LEGISLATION IS CURRENTLY UNDER PREPARATION IN RESPECT OF THE BUYBACK OF SHARES BY LISTED COMPANIES; IF EVERYTHING GOES ACCORDING TO PLAN, WILL BE ENACTED BY END OF THE YEAR, HE SAID.
++
AS REGARDS STOCK BORROWING AND LENDING, THE STAMP DUTY (AMENDMENT) ORDINANCE 1989 HAD ALREADY BEEN ENACTED AND WOULD BE BROUGHT INTO EFFECT ONCE A PROPER RISK MANAGEMENT SYSTEM FOR STOCK BORROWING AND LENDING WAS IN PLACE, MR NENDICK SAID, ADDING THAT GOOD PROGRESS WAS BEING MADE AND THERE WAS A GOOD PROSPECT OF BRINGING THE ORDINANCE INTO FORCE IN ABOUT THREE MONTHS' TIME.
MOVING A NUMBER OF AMENDMENTS TO THE BILL AT THE COMMITTEE STAGE, MR NENDICK SAID CLAUSE 1(2) PROVIDED THAT THE ORDINANCE SHALL COME INTO OPERATION ON A DATE TO BE APPOINTED BY THE GOVERNOR TO ENABLE THE BRINGING INTO FORCE OF THE BILL AT A LATER DATE WHEN THE BUYBACK OF SHARES BY LISTED COMPANIES AND STOCK BORROWING AND LENDING FREE OF STAMP DUTY WERE IN PLACE.
CLAUSE 2(1) SET OUT A NEW DEFINITION OF INSIDER DEALER BY REFERENCE то A PERSON WHO PERPETRATED ANY ACT WHICH WAS AN INSIDER DEALING WITHIN THE MEANING OF CLAUSE 8.
**THIS AVOIDS DIFFICULTIES 'INVOLVEMENT' IN AN INSIDER DEALING.
IN DETERMINING A PERSON'S
"IT ALSO REFERS TO A PERSON WHO IS TO BE REGARDED AS AN INSIDER DEALER UNDER THE NEW CLAUSE 13(6)," MR NENDICK SAID.
IT
CLAUSE 13 WAS AMENDED BY DELETING SUB-CLAUSE (4) AND REPLACING BY A NEW SUB-CLAUSE TO DRAW A CLEAR DISTINCTION BETWEEN "NEGLIGENT OFFICER" AND A "TRUE" INSIDER DEALER.
A
/"A NEGLIGENT