XN000022-1988-04-27 — Page 5

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WEDNESDAY, APRIL 27, 1988

MEMBERS OF THE SECURITIES

SECURITIES AND HIS STAFF, AND

COMMISSION, THE COMMISSIONER FOR INSPECTORS APPOINTED UNDER THE SECURITIES ORDINANCE WERE REQUIRED TO OBSERVE THE SECRECY PROVISION IN SECTION 19.

"THE RESTRICTIVE NATURE OF THIS SECTION HAS MEANT THAT THE COMMISSION AND THE COMMISSIONER HAVE BEEN UNABLE TO OFFER THEIR FULL ASSISTANCE TO LAW ENFORCEMENT AGENCIES IN HONG KONG AND ΤΟ OVERSEAS REGULATORY AUTHORITIES," MR JACOBS SAID.

"NOR HAS IT BEEN POSSIBLE FOR THE COMMISSION ΤΟ RELEASE INFORMATION OBTAINED BY INSPECTORS TO LAW ENFORCEMENT AGENCIES IN HONG KONG,

"THIS SITUATION IS UNSATISFACTORY.

"AS THE FINANCIAL SERVICES INDUSTRY BECOMES INCREASINGLY INTEGRATED, IT IS ESSENTIAL THAT THE COMMISSIONER AND ANY INSPECTORS APPOINTED UNDER THE ORDINANCE SHOULD BE ABLE TO CO-OPERATE FULLY WITH LAW ENFORCEMENT AGENCIES.

**MOREOVER, WITH THE INCREASING INTERNATIONALISATION OF SECURITIES MARKETS, IT IS BECOMING ESSENTIAL FOR REGULATORY AUTHORITIES IN DIFFERENT JURISDICTIONS TO BE ABLE TO CO-OPERATE FULLY WITH EACH OTHER IN THE GENERAL INTEREST OF INVESTORS."

MR JACOBS SAID THAT THESE CHANGES IN THE MARKET HAD LED TO THE RELAXATION OF THE SECRECY PROVISIONS IN THE BANKING ORDINANCE IN 1986, WHICH ALLOWED THE COMMISSIONER OF BANKING TO CO-OPERATE WITH AND OVERSEAS AGENCIES.

DOMESTIC

HE PROPOSED THAT THE RELEVANT PROVISIONS IN THE SECURITIES ORDINANCE BE BROUGHT INTO LINE WITH THOSE IN THE BANKING ORDINANCE So AS TO PERMIT GREATER DISCRETION IN THE DISCLOSURE OF INFORMATION IN SPECIFIED CIRCUMSTANCES, WHILE PRESERVING THE GENERAL OBLIGATION OF SECRECY.

THE BILL WOULD SPECIFY THE PERSONS TO WHOM AND, IN SOME CASES, THE PURPOSES FOR WHICH SUCH INFORMATION MIGHT BE DISCLOSED BY THE COMMISSIONER FOR SECURITIES.

SUCH PURPOSES WOULD INCLUDE ANY INVESTIGATION OR CRIMINAL PROCEEDINGS IN HONG KONG, OR CIVIL PROCEEDINGS UNDER THE ORDINANCE.

INFORMATION MIGHT ALSO BE DISCLOSED TO THE INSIDER DEALING TRIBUNAL AND TO THE FINANCIAL SECRETARY, THE SECRETARY FOR MONETARY AFFAIRS, AND THE REGISTRAR GENERAL.

/IT MIGHT