XN000022-1990-07-03 — Page 6

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TUESDAY, JULY 3, 1990

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BILLS SEEK TO STANDARDISE TIME LIMITS TO APPROVE EXCHANGE RULES

THE SECRETARY FOR MONETARY AFFAIRS, MR DAVID NENDICK, ANNOU CED TODAY (TUESDAY) THAT PROPOSED LEGISLATIVE AMENDMENTS TO STANDARDISE EXISTING TIME LIMITS FOR THE SECURITIES AND FUTURES COMMISSION (SFC) TO APPROVE RULES PROPOSED BY THE STOCK AND FUTURES EXCHANGES AND CLEARING HOUSES WOULD BE INTRODUCED INTO THE LEGISLATIVE COUNCIL ON JULY 18.

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HE SAID LEGISLATIVE PROPOSALS TO ALLOW FOR EXTENSION OF SUCH TIME LIMITS AND TO ENABLE THE SFC TO RECOGNISE A CLEARING HOUSE FOR SECURITIES TRANSACTIONS WOULD ALSO BE INTRODUCED INTO THE LEGISLATIVE COUNCIL ON THE SAME DAY.

THESE PROPOSED AMENDMENTS ARE ENSHRINED IN THE STOCK EXCHANGES UNIFICATION (AMENDMENT) BILL

1990, COMMODITIES TRADING (AMENDMENT) BILL 1990 AND SECURITIES AND FUTURES COMMISSION (AMENDMENT) (NO. 2) BILL 1990.

"THE AMENDMENTS ARE A RESPONSE TO PRACTICAL DIFFICULTIES ENCOUNTERED IN THE COURSE OF DEALINGS WITH THE EXCHANGES AND CLEARING HOUSES," MR NENDICK SAID.

THE AMENDMENTS AIM TO STANDARDISE THE STATUTORY TIME LIMITS FOR THE SFC TO APPROVE RULES PROPOSED BY THE EXCHANGES AND CLEARING HOUSES AT SIX WEEKS. THEY ALSO ALLOW FOR EXTENSION OF THE TIME LIMITS BY MUTUAL AGREEMENT BETWEEN THE SFC AND THE EXCHANGE OR THE CLEARING HOUSE CONCERNED.

"ALTHOUGH THE SFC WILL ALWAYS AIM TO EXAMINE AND PRONOUNCE UPON PROPOSED RULE CHANGES AS QUICKLY AS POSSIBLE, THE PRESENT TIME LIMIT IN RELATION TO THE HONG KONG FUTURES EXCHANGE IS ONLY TWO WEEKS AND THIS HAS BEEN GENERALLY FOUND TO BE INADEQUATE.

"MOREOVER, THERE IS NO

EXTENSION BY MUTUAL AGREEMENT.

STATUTORY PROVISION ALLOWING FOR

"THE BILLS AIM TO REMOVE SOME INCONSISTENCIES AND RIGIDITIES IN EXISTING LEGISLATION, MR NENDICK SAID.

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TO TIE IN WITH THE DEVELOPMENT OF CENTRAL CLEARING AND SETTLEMENT ARRANGEMENTS IN RESPECT OF TRANSACTIONS RECORDED ON THE STOCK EXCHANGE OF HONG KONG, THE BILLS ALSO PROVIDE FOR THE SFC TO BE ABLE TO RECOGNISE A CLEARING HOUSE AND APPROVE ITS RULES AND CONSTITUTION,

THIS WILL BRING IN LINE THE RELEVANT LEGISLATIVE PROVISIONS FOR THE CLEARING FACILITIES ON BOTH THE FUTURES AND SECURITIES MARKETS.

"IN VIEW OF THE IMPORTANCE OF CLEARING ARRANGEMENTS то THE MARKET IT IS PROPOSED THAT BEFORE EXERCISING THIS POWER THE SFC SHOULD CONSULT THE FINANCIAL SECRETARY, MR NENDICK SAID.

THE BILLS WILL BE GAZETTED THIS FRIDAY (JULY 6).

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