XN000022-1972-10-06 — Page 3

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Friday, October 6, 1972

LEGISLATION TO TIGHTEN CONTROL OVER ISSUE OF COMPANY PROSPECTUSES

The first of a number of bills giving effect to the recommendations

contained in the First Report of the Companies Law Revision Committee was

published today.

Commenting on the bill, the Companies (Amendment) Bill 1972, a

government spokesman said its principal aim was to tighten control over

prospectuses issued in Hong Kong by companies, whether local or foreign.

"When the bill is enacted," the spokesman said, "the law of Hong

Kong will be brought generally into line, as far as prospectuses are concerned,

with the Companies Act 1948 in Great Britain, but with the addition of most of the recommendations in the Jenkins Committee Report of 1962. As yet, these

have not been incorporated into British legislation."

The main features of the bill include the following:

(1) More information will have to be supplied in prospectuses than has been the practice.

(2) Prospectuses must be published in Chinese as

well as in English.

(3) Prospectuses will have to contain a notice

advising potential investors, if they are in any doubt, to consult a professional adviser.

(4) In order to give potential investors an

opportunity to digest the information in a prospectus and seek professional advice if they wish, at least two days must elapse between the issue of a prospectus and the opening of the subscription lists.

/(5) Criminal .............