CO129-598-2 Tai Lam Chung Reservoir Project 24-6-1948 - 3-3-1949 — Page 24

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prefer registration or deposit, but are

willing to agree to suggested alternative,

which seems a reasonable compromise. Point

of alternative is that if issue were

restricted to persons "resident" (for

purposes of exchange control) in Hong Kong

and transfer except to other such residents

forbidden, consequence would be that

payment could in fact be made only in

Hong Kong dollars, but resulting

discrimination, in sofar as it existed

at all would not (repeat not) be of a type

prohibited by agreements.

6.

Subject to legal advice, conditions

of issue and transfer to residents only could

be embodied in terms of issue and on face

of bonds themselves.

an a point of detail,

it is thought that it would be necessary

to require that resident to whom interest

and redemption monies payable should be

"beneficial owner", otherwise resident banks

and other agents could accept payment for

non-resident clients.

7. I appreciate that these requirements might

tend to scare off certain class of potential

investor, but it is not considered necessary

to require such details of, or unduly formal

proof of, "residence" etc. as would in fact

scare off bona fide investors. Subject to

your views it is suggested that exact nature

or extent of proof required could either be

assumption by authorities of residence,(unless

authorities have proof to contrary) on

presentation of bonds and coupons from

Hong Kong address, or acceptance of verbal

statement