XN000022-1973-02-01 — Page 2

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Thursday, February 1, 1973

SECURITIES ADVISORY COUNCIL PROPOSALS

On Brokerage Fees, Placements, Stock Exchange Membership

The Securities Advisory Council held their second meeting yesterday

and submitted recommendations to the Financial Secretary which he approved.

The Commissioner for Securities met the Chairmen of the four stock exchanges

this morning and conveyed these proposals to them.

Brokerage Fees

The Council considers that it is advisable to have a recognized system

of brokerage rates applicable to all exchanges. The Chairmen were therefore

requested to agree on a common brokorage system, and to submit within a month

the details of such a scheme to the Council for approval, together with details

of how the stock exchanges intend to enforce the scheme among their members.

The minimum brokerage rate will be 1⁄2 per cent, with a minimum amount of $25.

Rebates will be allowable only to authorized clerks, authorized dealers and

licensed banks.

Placements

The method of introducing a company to a stock exchange, known as a

placement (or placing) is reasonable and acceptable in certain circumstances

and with proper administrative arrangements. However, the use of this method

in Hong Kong in recent months has been much criticized, and the Securities

Advisory Council intend to carry out a study in the near future.

In the meantime, the Chairmen of the Exchanges were asked that placements

should comply with the following:

(a)

that for assets amounting to at least 50 per cent of the issued capital there should be available accounts covering not less than three preceding years;

/(b) that ****