XN000022-1985-07-10 — Page 15

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NERY, JULY 10, 1985

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CORPORATIONS INCORPORATED IN HONG KONG AND ENGAGED IN TRADING IN COMMODITY FUTURES CONTRACTS ON THE FUTURES EXCHANGE WOULD BE ELIGIBLE FOR MEMBERSHIP AND BANKS AND DTCS WOULD BE ABLE TO PARTICIPATE IN THE EXCHANGE THROUGH SUBSIDIARIES INCORPORATED FOR THE PURPOSE, HE SAID.

TO SAFEGUARD THE INTERESTS OF INVESTORS, HE SAID, THE BILL PROVIDED FOR THE SETTING UP OF A NEW AND SELF-SUSTAINING COMPENSATION FUND AND FOR STREAMLINING THE PROCEDURES IN CONNECTION WITH THE LODGING, DETERMINING AND SETTLING OF CLAIMS.

HE SAID THAT THE EXCHANGE WOULD CONTRIBUTE A MAXIMUM OF $100 000 TO THE FUND ON BEHALF OF EACH OF ITS MEMBERS.

+TO PROVIDE REGULAR INJECTIONS INTO THE FUND, A LEVY, THE RATE OF WHICH WILL BE FIXED BY THE COMMODITIES TRADING COMMISSION, WILL BE CHARGED ON EVERY CONTRACT TRADED ON THE EXCHANGE,+ MR HIGGINSON SAID.

THE MAXIMUM PAYOUT FROM THE COMPENSATION FUND PER DEFAULTING SHAREHOLDER, HE SAID, WAS TO BE RAISED FROM THE EXISTING $1 MILLION TO $2 MILLION.

+CLAIMS WILL BE DETERMINED BY THE EXCHANGE, BUT PERSONS AGGRIEVED BY THE EXCHANGE'S DECISIONS WILL HAVE A RIGHT OF APPEAL TO THE APPEALS COMMITTEE OF THE COMMISSION, IN ADDITION TO THE IR EXISTING RIGHT TO ESTABLISHING THEIR CLAIMS IN COURT.

+THE NEW COMPENSATION FUND WILL BE ESTABLISHED WHEN THE EXCHANGE COMPANY HAS COMPLETED ITS INTERNAL REORGANISATION AND IS READY TO ADMIT NEW MEMBERS, HE SAID.

THE CONSIDERABLE INCREASE IN THE SCOPE AND THE COMPLEXITY OF THE COMMISSION'S ACTIVITIES HAD GIVEN RISE TO THE NEED TO BE ABLE TO ENLARGE THE MEMBERSHIP OF THE COMMODITIES TRADING COMMISSION.

CLAUSE 3, THEREFORE, PROVIDED THAT THE COMMISSION SHOULD CONSIST OF NOT LESS THAN SEVEN MEMBERS, MR HIGGINSON SAID.

HE SAID THAT THE BILL ALSO PROVIDED FOR THE ESTABLISHMENT OF A FIVE-MEMBER COMMODITIES TRADING COMMISSION APPEALS COMMITTEE FOR HEARING ANY APPEALS UNDER THE ORDINANCE.

HE SAID THAT TRADING IN HANG SENG INDEX FUTURES CONTRACTS, THE FIRST NEW CONTRACT PROPOSED TO BE INTRODUCED IN THE EXCHANGE WOULD NOT COMMENCE UNTIL THE GOVERNOR IN COUNCIL WAS ADVISED BY THE SECURITIES AND COMMODITIES TRADING COMMISSIONS THAT TWO IMPORTANT CONDITIONS HAD BEEN MET.

+FIRST, THAT THE EXCHANGE HAS BEEN PROPERLY REORGANISED: SECOND, THAT THE COMMISSIONS ARE SATISFIED WITH THE SAFEGUARDS INTRODUCED TO DETER, DETECT AND PREVENT MANIPULATION IN RESPECT OF TRADING IN THE HANG SENG INDEX AND TO PROTECT THE INVESTING PUBLIC, HE SAID.

/+IT CONTINUES