XN000022-1985-07-10 — Page 14

WEDNESDAY, JULY 10, 1985

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FINANCIAL FUTURES MARKET WELCOMED

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THE GOVERNMENT WELCOMED THE SETTING UP OF A FINANCIAL FUTURES MARKET IN HONG KONG, THE SECRETARY FOR ECONOMIC SERVICES, THE HON GERRY HIGGINSON, TOLD THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

MOVING THE SECOND READING OF THE COMMODITIES TRADING (AMENDMENT) BILL 1985, HE SAID THIS WAS BASED ON THE GROWING MATURITY OF THE FUTURES INDUSTRY IN HONG KONG, THE BENEFITS TO BE GAINED FROM DEVELOPING HONG KONG'S POSITION AS A MAJOR FINANCIAL CENTRE, AND THE EXPERIENCE GAINED FROM THE SUCCESSFUL OPERATION OF FINANCIAL FUTURES TRADING IN THE USA, SYDNEY, TORONTO, LONDON AND SINGAPORE.

THE GOVERNMENT WAS ALSO AWARE OF THE NEED FOR AN OVERALL REVIEW OF THE PRINCIPAL ORDINANCE IN THE LIGHT OF THE RAPIDLY CHANGING CHARACTERISTICS OF THE FUTURES INDUSTRY AND FURTHER AMENDING LEGISLATION WOULD BE PRESENTED AFTER COMPLETION OF THE REVIEW, HE SAID.

THE BILL, MR HIGGINSON SAID, HAD THREE MAIN OBJECTIVES,

+FIRST, TO FACILITATE THE REORGANISATION OF THE HONG KONG FUTURES EXCHANGE- SECOND, TO MAKE PROVISION FOR TRADING FINANCIAL FUTURES AND THIRD, TO IMPROVE THE OPERATION OF AND THE PROTECTION TO BE AFFORDED BY THE EXCHANGE COMPANY'S COMPENSATION FUND.

+NEW DEFINITIONS OF COMMODITY' AND 'FUTURES CONTRACTS' ARE PROVIDED IN ORDER TO ALLOW FINANCIAL FUTURES CONTRACTS, IN GENERAL, TO BE BROUGHT WITHIN THE AMBIT OF THE ORDINANCE.+

MR HIGGINSON SAID THAT THE BILL PROPOSED CERTAIN IMPORTANT CHANGES TO THE STRUCTURE OF THE EXCHANGE COMPANY.

+THE MANAGEMENT OF THE EXCHANGE WILL BE VESTED IN A PROPERLY CONSTITUTED BOARD OF DIRECTORS.

+ IN ADDITION, THE EXCHANGE WILL BE ABLE TO USE MORE THAN ONE CLEARING HOUSE AND GUARANTEE CORPORATION IN RESPECT OF DIFFERENT MARKETS IN THE FUTURE, IF IT SO WISHES,

+HOWEVER, THE CLEARING HOUSES AND THE GUARANTEE CORPORATIONS WILL BE SUBJECT TO THE PRIOR APPROVAL OF THE COMMODITIES TRADING COMMISSION, HE SAID.

THE BILL ALSO REMOVED THE PRESENT DISQUALIFICATION AGAINST LICENSED BANKS AND DEPOSIT TAKING COMPANIES OR THEIR DIRECTORS AND EMPLOYEES, PRACTISING SOLICITORS AND PROFESSIONAL ACCOUNTANTS FROM BECOMING SHAREHOLDERS OF THE EXCHANGE COMPANY, MR HIGGINSON SAID.

/CORPORATIONS