XN000022-1988-05-27 — Page 7

FRIDAY, MAY 27, 1988

FEES FOR AUTHORISATION AND MONITORING OF MUTUAL FUNDS, UNIT TRUSTS

THE EXECUTIVE COUNCIL HAS APPROVED THE INTRODUCTION OF APPLICATION, AUTHORISATION AND ANNUAL FEES FOR UNIT TRUSTS AND MUTUAL

FUNDS.

DETAILS WERE CONTAINED IN THE SECURITIES (MISCELLANEOUS) (AMENDMENT) REGULATIONS 1988 GAZETTED TODAY (FRIDAY).

A GOVERNMENT SPOKESMAN SAID FROM JUNE 1 THIS YEAR, AN INITIAL FEE OF $10,000 WOULD BE PAYABLE BY EACH OF THESE FUNDS UPON APPLICATION. A FURTHER FEE OF $5,000 WOULD BE CHARGED UPON AUTHORISATION AND AN ANNUAL FEE OF $2,700 PAYABLE AT THE SAME TIME.

HE POINTED OUT THAT THE DECISION TO LEVY FEES FOR THE AUTHORISATION AND MONITORING OF MUTUAL FUNDS AND UNIT TRUSTS WAS IN KEEPING WITH THE GOVERNMENT'S POLICY OF RECOVERING ADMINISTRATIVE COSTS FOR SERVICES PROVIDED WHEREVER APPROPRIATE.

FOR

EXPLAINING THE PROCEDURES INVOLVED, THE SPOKESMAN SAID THAT UNIT TRUSTS AND MUTUAL FUNDS WERE AUTHORISED BY THE COMMISSIONER SECURITIES UNDER THE PROVISIONS OF THE SECURITIES ORDINANCE.

"AUTHORISATION IS GRANTED ON THE BASIS OF RECOMMENDATIONS

BY THE COMMITTEE ON UNIT TRUSTS," HE SAID.

MADE

OFFICE WHICH

"THE UNIT TRUST SECTION OF THE COMMISSIONER'S REPORTS TO THE COMMITTEE EXAMINES ALL APPLICATIONS FOR AUTHORISATION TO ENSURE THAT THEY COMPLY WITH THE HONG KONG CODE ON UNIT TRUSTS AND MUTUAL FUNDS AND MONITORS ADVERTISEMENTS MADE BY ALL AUTHORISED FUNDS.

"THE FEES WILL RECOVER THE COST OF PROVIDING THESE SERVICES,

HE ADDED.

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ON THE SYSTEM OF FEES, THE SPOKESMAN SAID FEES WOULD BE PAYABLE AT THREE STAGES: UPON APPLICATION, BEFORE AN AUTHORISATION CAN TAKE EFFECT AND ANNUALLY THEREAFTER.

"EACH CONSTITUENT SUB-FUND OF AN UMBRELLA FUND TOGETHER WITH THE PARENT FUND WILL BE TREATED AS A SEPARATE FUND AND WILL ATTRACT THE APPROPRIATE FEE, HE SAID.

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APPLIED AND TO PAY THE

UNIT TRUSTS AND MUTUAL FUNDS WHICH HAVE ALREADY ARE NOW IN THE QUEUE FOR PROCESSING WILL NOT BE REQUIRED APPLICATION FEE. HOWEVER THE AUTHORISATION AND ANNUAL FEES WOULD BE CHARGED.

"THOSE FUNDS WHICH HAVE ALREADY BERN AUTHORISED BY THE COMMISSIONER FOR SECURITIES WILL ONLY BE REQUIRED TO PAY THE ANNUAL

FEES.'

**

THE SPOKESMAN