1974-HKRS28-16-22_Part02 — Page 14

Replenish-

ment of fund in

certain casca.

(2) If-

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(2) any money or guarantee has been delivered to a stock

exchange pursuant to subsection (1); and

(b) the exchange obtained the guarantee by means of a direct levy imposed on the stockbroker in respect of whom the monty or guarantee was deposited,

the exchange shall, if that stockbroker has satisfied all financial obligations due from him to the exchange and is otherwise in good standing with the exchange and is not bankrupt or insolvent, deliver the money or guarantee to him or, if he has died, to his personal representative.

107. (1) Subject to subsection (4), if at any time resort has to be made to any money or guarantee deposited under section 104 in order to satisfy any claim made against the compensation fund in relation to a stockbroker, or to a member firm or cor- porate member of a stock exchange, the exchange to which the stockbroker, member firm, or corporate member belongs, or be- longed at the time of the default giving rise to the claim, shall, on being required to do so by the Commission, replenish the fund by depositing with the Commission an amount that is equal to that paid in connexion with the satisfaction of the claim, includ- ing any legal and other expenses paid or incurred in relation to the claim.

(2) Subject to subsections (3) and (4), if any stock exchange, whether because of insolvency or any other reason, is unable to deposit the amount required under subsection (1), each remaining stock exchange shall, if required to do so by the Commission, replenish the compensation fund by depositing in respect of each stockbroker belonging to the exchange a sum equal to that pro- portion which the amount not deposited in accordance with sub- section (1) bears to the total number of stockbrokers belonging to the remaining exchanges.

(3) A stock exchange may not be required, pursuant to sub- section (2), to deposit any sum or sums representing an amount exceeding $50,000 in respect of each stockbroker belonging to the exchange; and if on one or more occasions a stock exchange has. pursuant to that subsection, deposited a sum or sums representing that amount, the exchange shall not be liable to deposit further sums under that subsection.

(4) The Commission may not require a stock exchange-

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(a) to make a deposit under subsection (1) in respect of any payment made to satisfy a claim under this Part unless it has first exhausted all relevant rights of action and other legal remedies, conferred by section 118, against the stockbroker, member firm, or corporate member in relation to whom or to which the claim

arose; or

(b) to make a deposit under subsection (2) unless it has first exhausted all relevant rights of action and other legal remedies against the stock exchange that is primarily liable by virtue of subsection (1).

(5) Any amount required to be deposited under this section may be sued for and recovered by the Commission as a debt in any court of competent jurisdiction.

108, (1) Subject to this Part, there shall from time to time Payments be paid out of the compensation fund as required and in the out of the

fund. following order—

(a) all legal and other expenses incurred in investigating or defending claims made under this Part or incurred in relation to the fund or in the exercise by the Council of the Federation or the Commission of the rights. powers, and authorities vested in them by this Part in relation to the fund;

(b) the expenses incurred or involved in the administration

of the fund;

(c) the amounts of all claims, including costs, allowed by the Council of the Federation or established against the Federation under this Part; and

(d) all other money payable out of the fund in accordance

with this Part.

(2) If at any time the money deposited in the compensation fund is insufficient for any payment under subsection (1), the Commission may require the guarantor under any guarantee deposited with it under section 104(1) to pay to the Commission all or any part of the sum guaranteed, in which event the guarantor shall pay the amount so required.

(3) Any amount required to be paid under subsection (2) may be sued for and recovered by the Commission as a debt in any court of competent jurisdiction.