XN000022-1977-10-06 — Page 6

1

5

Thursday, October 6, 1977

Background

Section 140 of the Securities Ordinance (passed in 1974) made

insider dealing a criminal offence, carrying a penalty of a $50,000 fine

-

and two years' imprisonment.

This section was never brought into effect, however, as at that

time a new companies bill was under consideration in the United Kingdom

which contained provisions for covering insider dealing, and the Hong Kong

authorities wished to profit from U.K. experience before effecting

legislation in Hong Kong.

In the event, the Conservative Government (whose bill it was)

lost the election and the bill automatically lapsed.

The Labour Government subsequently enacted a companies bill,

but it contained no provisions relating to insider dealing. It is understood

that a draft companies bill, including provisions in respect of insider

dealing, is shortly to be published.

Ordinance.

It is proposed to repeal section 140 of the 1974 Securities

I

16....