XN000022-1983-12-07 — Page 4

WEDNESDAY, DECEMBER 7, 1983

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THE SECOND AMENDMENT CONCERNS THE DUTY OF CERTAIN STATED PARTIES TO PRODUCE ALL BOOKS, PAPERS OR INFORMATION RELEVANT TO THE INVESTIGATIONS TO AN INSPECTOR APPOINTED BY THE FINANCIAL

SECRETARY UNDER SECTION 39 AND 57B RESPECTIVELY OF THE AMENDMENT BILLS.

THE STATED PARTIES INCLUDE ANY AGENT OF A COMPANY UNDER INVESTIGATION, AND THE TERM AGENT IS SUBSEQUENTLY DEFINED AS INCLUDING SOLICITORS.

MR BROWN SAID, WHILE IT IS QUITE PROPER THAT A SOLICITOR SHOULD BE REQUIRED TO PRODUCE BOOKS AND PAPERS WHICH HAVE BEEN PREPARED IN THE COURSE OF THE BUSINESS OF THE FINANCIAL INSTITUTION, IT IS THOUGHT THIS SHOULD NOT EXTEND TO INSTRUCTIONS GIVEN TO THE SOLICITOR BY HIS CLIENT.+

HE SAID THAT HE WOULD THEREFORE MOVE AMENDMENTS TO INCORPORATE IN THE BILLS A PROVISION SIMILAR TO SECTION 131(1) OF THE SECURITIES ORDINANCE WHICH READS 1

+AN INSPECTOR SHALL NOT REQUIRE DISCLOSURE BY A SOLICITOR OR COUNSEL OF ANY PRIVILEGED COMMUNICATION, WHETHER ORAL OR WRITTEN, MADE TO OR BY HIM IN THAT CAPACITY, EXCEPT AS REGARDS THE NAME AND ADDRESS OF HIS CLIENT.+

THE THIRD AMENDMENT DEALS WITH THE DEFINITION OF +RELATIVE+.

MR BROWN SAID WHILE HE WELCOMED THE ATTEMPT TO DEFINE THE TERM IN THE AMENDMENT BILLS, THE DEFINITION AS PROPOSED WAS TOO WIDE AND WOULD REQUIRE FINANCIAL INSTITUTIONS TO ENQUIRE INTO THE PERSONAL AFFAIRS OF THE IR CUSTOMERS BEYOND WHAT WAS EITHER REASONABLE OR PRACTICABLE.

HE WOULD THEREFORE PROPOSE TO DELETE SUB-SECTION (C)

(+ANY RELATIVE BY AFFINITY OR CONSANGUINITY WHO IS ONE OF

THE HOUSEHOLD+) IN THE DEFINITION OF RELATIVE APPEARING IN CLAUSES 11(D) AND 8(B) RESPECTIVELY OF THE AMENDMENT BILLS.

MR BROWN ADDED THAT UNOFFICIAL MEMBERS HAD ACCEPTED THE ADMINISTRATION'S VIEW THAT IT WAS NECESSARY FOR THE DEFINITION OF +RELATIVE TO INCLUDE ANY ASCENDANT OR DESCENDANT AND THE SPOUSE AND THE PARENTS, BROTHERS AND SISTERS OF THE SPOUSE OF ANY SUCH ASCENDANT OR DESCENDANT AND ON THE BASIS THE ORDINANCES PROVIDED THAT DUE DILIGENCE SHOULD BE A GOOD DEFENCE IN THE EVENT FINANCIAL INSTITUTIONS CONTRAVENED THIS RESTRICTION.

IN CONNECTION WITH LIMITATION ON ADVANCE TO DIRECTORS AND THE IR ASSOCIATED INTERESTS, MR BROWN SAID THAT HE WOULD PROPOSE AMENDMENTS SO THAT ADVANCES COVERED BY BANK GUARANTEES WOULD NOT BE SUBJECTED TO LIMITATION.

REFERRING TO THE CONCERN THAT TRANSITIONAL ARRANGEMENTS SHOULD BE PRESCRIBED UNDER CLAUSES 11 AND 8 OF THE RESPECTIVE AMENDMENT BILLS, MR BROWN SAID, +AMENDMENTS WILL BE PROPOSED, ACCORDINGLY, TO MAKE IT CLEAR THAT THE PROVISIONS OF THESE CLAUSES WILL NOT APPLY TO PRE-EXISTING CONTRACTUAL OBLIGATIONS ENTERED INTO PRIOR TO THE BILLS'

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COMMENCEMENT.+