XN000022-1974-03-14 — Page 19

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Thursday, March 14, 1974

COMPULSORY REGISTRATION FOR FINANCE COMPANIES URGED

Need To Abolish Interest Tax On Foreign Currency Deposits

***

All finance companies in Hong Kong should be required to register

with the government, after which licences can be issued subject to minimum requirements being met as to capital and the observance of the minimum

deposit concept, the Hon. Guy Sayer suggested today.

Speaking during the resumed Budget debate, Mr. Sayer said a

first step towards controlling the operation of finance companies would be to establish a list of those concerns that do or wish to actively seek

deposits from the public, including corporate bodies.

Hong Kong, he went on, should have some idea of the extent of the activities of finance companies and the impact they have or might have on its financial structuring. At present the actual number of finance

companies operating here is unknown as no definitive records are kept.

"One has only to look to the United Kingdom to see the effects on a monetary system of the uncontrolled proliferation of finance companies

and secondary banks," observed Mr. Sayer.

He was sceptical of the effectiveness of self-discipline as a

means of regulating the activities of deposit taking finance companies. Likewise, he questioned the feasibility of leaving the finance companies

to set their house in order without any governmental intervention.

He thought that while some sort of association might be formed to maintain rules and standards, the government should take a positive lead

in the matter.

/As regards