XN000022-1991-05-01 — Page 11

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WEDNESDAY, MAY 1, 1991

HOWEVER, IT HAD ALWAYS BEEN THE INTENTION THAT THE DISCLOSURE OBLIGATIONS UNDER THE ORDINANCE SHOULD ALSO APPLY TO OFFICERS AND SUBSTANTIAL SHAREHOLDERS OF OVERSEAS COMPANIES LISTED IN HONG KONG IN ORDER TO PROTECT LOCAL INVESTORS, HE NOTED.

"WE PROPOSE, THEREFORE, TO EXTEND THE ORDINANCE ΤΟ OVERSEAS COMPANIES LISTED IN HONG KONG, SUBJECT TO CERTAIN OTHER AMENDMENTS то THE ORDINANCE ΤΟ RECOGNISE THE NEED FOR POSSIBLE EXEMPTIONS, THE PROBLEMS OF ENFORCEMENT IN RELATION TO OVERSEAS COMPANIES AND THE NEED FOR EQUAL TREATMENT IN LOCAL AND FOREIGN COMPANIES LISTED IN HONG KONG, MR MACLEOD SAID.

HE SAID ALTHOUGH THE GOVERNMENT BELIEVED THAT, AS A GENERAL RULE, THE ORDINANCE SHOULD APPLY TO ALL COMPANIES LISTED IN HONG KONG, IT ACCEPTED, HOWEVER, THAT RELIEF MIGHT BE JUSTIFIED IN CERTAIN CASES.

THE INTENTION WAS TO EASE THE ADMINISTRATIVE BURDEN ON LISTED COMPANIES OF DUPLICATE FILING REQUIREMENTS WITHOUT COMPROMISING THE NEED FOR ADEQUATE INVESTOR PROTECTION, HE EXPLAINED, ADDING THAT MUCH WOULD DEPEND UPON THE CIRCUMSTANCES OF EACH CASE.

"WE PROPOSE, THEREFORE, THAT THE SECURITIES AND FUTURES

COMMISSION BE GIVEN A GENERAL POWER TO EXEMPT COMPANIES FROM SOME ALL OF THE PROVISIONS OF THE ORDINANCE.

OR

"HOWEVER, FOR THE SAKE OF TRANSPARENCY, THIS DISCRETION WILL NEED TO BE EXERCISED IN THE LIGHT OF GUIDELINES TO BE PUBLISHED BY THE COMMISSION AFTER CONSULTING THE FINANCIAL SECRETARY, MR MACLEOD SAID.

HE POINTED OUT THAT THE COMMISSION HAD ISSUED DRAFT GUIDELINES FOR PUBLIC CONSULTATION IN ADVANCE OF THEIR SUBMISSION ΤΟ THE

FINANCIAL SECRETARY.

"THESE GUIDELINES ENVISAGE TWO BROAD CLASSES OF EXEMPTION, UPON APPLICATION, FOR ELIGIBLE COMPANIES LISTED OR INTENDING TO LIST IN HONG KONG," HE SAID.

FIRST, A COMPLETE EXEMPTION MIGHT BE GIVEN ΤΟ A LARGE MULTINATIONAL COMPANY WHERE THE MAIN MARKETS IN ITS SECURITIES WERE ON MAJOR INTERNATIONAL STOCK EXCHANGES OTHER THAN HONG KONG, AND WHERE THE PROPORTION OF THE COMPANY'S WORLDWIDE SHARE TURNOVER TAKING PLACE IN HONG KONG WAS OR WAS LIKELY TO BE ONLY NOMINAL.

SECONDLY, MR MACLEOD SAID AN EXEMPTION FROM THE REPORTING REQUIREMENTS UNDER THE ORDINANCE MIGHT BE GIVEN TO A COMPANY WHERE THE PROPORTION OF THE COMPANY'S WORLDWIDE SHARE TURNOVER TAKING PLACE IN HONG KONG WAS NOT OR WAS NOT LIKELY TO BE SIGNIFICANT, AND WHERE THE COMPANY WAS SUBJECT TO COMPARABLE STATUTORY DISCLOSURE PROVISIONS ELSEWHERE.

CONDITIONAL

"SUCH EXEMPTION WOULD BE

UPON THE REGULATORY AUTHORITIES IN HONG KONG RECEIVING COPIES OF NOTIFICATIONS REQUIRED TO BE FILED IN THAT OTHER JURISDICTION," HE ADDED.

MR MACLEOD SAID THE DRAFT GUIDELINES WOULD BE REVIEWED IN THE LIGHT OF PUBLIC COMMENT.

/"WE AIM

J