XN000022-1980-07-18 — Page 9

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FRIDAY, JULY 18, 1980

THIS WOULD BE DONE BY :

* ADDING A SPECIAL DEFINITION OF +FUTURES

CONTRACT+ TO SECTION 26 OF THE ORDINANCE WHICH WOULD INCORPORATE THE KIND OF 'FRINGE' DEALINGS NOW BEING PRACTISED. THE EFFECT OF THIS ADDITION WOULD BE THAT ANYONE WHO TRADED IN THE MANNER DEFINED WOULD HAVE TO REGISTER AS A DEALER.

*

AMENDING THE ORDINANCE SO THAT A PERSON WHO RECEIVED ORDERS FROM MEMBERS OF THE PUBLIC, AND WHO PLACED THOSE ORDERS ONLY THROUGH A REGISTERED DEALER, WOULD BE REGARDED AS AN AGENT AND THEREFORE, WOULD NOT BE EXEMPTED FROM REGISTRATION.

* CONFERRING EXEMPTION ONLY TO MEMBERS OF THE

CHINESE GOLD AND SILVER EXCHANGE SOCIETY WHO TRADE IN THEIR CAPACITY AS MEMBERS.

THE SPOKESMAN POINTED OUT THAT THESE AMENDMENTS WOULD REQUIRE ALL DEALERS TO BE REGISTERED.

EXCEPTIONS WOULD BE MEMBERS OF THE PUBLIC WHO DEALT, ON THEIR OWN BEHALF, THROUGH REGISTERED DEALERS, AND MEMBERS OF THE SOCIETY WHO DEALT AS MEMBERS.

+REGISTRATION OF 'FRINGE OPERATORS, EVEN IF THEY COMPLIED WITH THE PROPOSED ADDITIONAL PROVISIONS, WOULD NOT BE AUTOMATIC,+ HE SAID.

THE COMMISSIONER FOR COMMODITIES TRADING WOULD REFUSE TO REGISTER AN APPLICANT AS A DEALER UNLESS HE FULFILLED A NUMBER OF CONDITIONS, INCLUDING #

*

HE MUST BE SHAREHOLDER OF AN EXCHANGE COMPANY (EITHER THE HONG KONG COMMODITY EXCHANGE OR ANY OF THE RECOGNISED OVERSEAS EXCHANGES SPECIFIED IN THE ORDINANCE) -

* HE PAID A DEPOSIT OF $100 000 IN CASH.

+ANYONE WHO DID NOT MEET THESE CONDITIONS COULD NOT REGISTER AND WOULD HAVE TO CEASE HIS TRADING ACTIVITIES,→ SAID THE SPOKESMAN.

THE ALTERNATIVE, HE SAID, WOULD BE PROSECUTION AS AN UNREGISTERED DEALER, CARRYING A MAXIMUM PENALTY OF A FINE OF $50 000.

THE BILL ALSO INTRODUCES NEW PROVISIONS WHICH ENSURED A CLIENT WOULD HAVE FULL KNOWLEDGE OF EVERY TRANSACTION UNDERTAKEN ON HIS BEHALF.

+THEY ARE SIMILAR TO THOSE CONTAINED IN SECTIONS 75 AND 77 OF THE SECURITIES ORDINANCE, AND ARE AIMED AT FACILITATING

A CUSTOMER'S ACCESS OF COPIES OF CONTRACT NOTES AND HIS ACCOUNTS WITH THE DEALER,+ HE SAID.

/ANYONE ac