XN000022-1984-07-24 — Page 24

TUESDAY, JULY 24, 1984

'FUTURES CONTRACT' DEFINED IN NEW BILL

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A COMMODITIES TRADING (AMENDMENT) BILL 1984, WHICH SEEKS TO FACILITATE THE REORGANISATION OF THE HONG KONG COMMOD Y EXCHANGE LTD AND THE INTRODUCTION OF A STOCK INDEX FUTURES CONTRACT IN THE REORGANISED EXCHANGE WILL BE PUBLISHED IN THE GAZETTE NEXT WEEK.

THE PROPOSAL TO ESTABLISH A FINANCIAL FUTURES MARKET, ANNOUNCED IN MAY THIS YEAR, HAS BEEN WELCOMED BY POTENTIAL MARKET USERS AND WILL BE CONTINGENT UPON THE PROPER REORGANISATION OF THE EXCHANGE.

AN OVERALL REVIEW OF THE COMMODITIES TRADING ORDINANCE IS ALSO UNDERWAY AND A MAJOR AMENDMENT BILL TO IMPROVE CONTROL OVER COMMODITIES TRADING AND FUTURES TRADING GENERALLY IS EXPECTED TO BE SUBMITTED TO THE LEGISLATIVE COUNCIL NEXT SESSION.

THE AMENDMENT BILL TO BE PUBLISHED NEXT WEEK PROVIDES NEW DEFINITIONS FOR THE TERMS 'COMMODITY' AND 'FUTURES CONTRACT' WHICH WILL ALLOW A FUTURES CONTRACT BASED ON THE HANG SENG INDEX TO BE TRADED ON THE COMMODITIES EXCHANGE WHEN BOTH THE SECURITIES COMMISSION AND THE COMMODITY TRADING COMMISSION ARE SATISFIED THAT THE NECESSARY SAFEGUARDS TO PROTECT THE INVESTING PUBLIC HAVE BEEN INSTITUTED BY THE REORGANISED EXCHANGE.

THE BILL ALSO ALLOWS THE COMMODITIES TRADING COMMISSION TO

IT HAVE MORE MEMBERS TO COPE WITH ITS ADDITIONAL ACTIVITIES. FURTHER WIDENS THE MEMBERSHIP OF THE EXCHANGE COMPANY BY LIFTING SHARE-HOLDING RESTRICTIONS ON LICENSED BANKS AND DTCS AND THEIR DIRECTORS OR EMPLOYEES, AND ON PRACTISING SOLICITORS AND PROFESSIONAL ACCOUNTANTS. HOWEVER, THE AMENDMENTS LIMIT CORPORATE MEMBERSHIP TO COMPANIES WHICH ARE INCORPORATED IN HONG KONG AND ENGAGED SOLELY IN FUTURES TRADING. BANKS AND DTCS, THE POTENTIAL MAJOR USERS OF THE FINANCIAL FUTURES MARKET, WILL THEREFORE BE ABLE TO PARTICIPATE IN THE REORGANISED EXCHANGE THROUGH THEIR SUBSIDIARIES. THE BILL WILL BE INTRODUCED INTO THE LEGISLATIVE COUNCIL

ON OCTOBER 10 AND IS EXPECTED TO RECEIVE ITS THIRD READING ON NOVEMBER 7.

ANYONE WHO WISHES TO COMMENT ON ITS PROVISIONS MAY WRITE TO UMELCO, AT SWIRE HOUSE, 12TH FLOOR, CHATER ROAD, OR TO

THE SECRETARY FOR ECONOMIC SERVICES, AT THE CENTRAL GOVERNMENT OFFICES, LOWER ALBERT ROAD, HONG KONG.

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