XN000022-1991-11-14 — Page 10

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THURSDAY, NOVEMBER 14, 1991

"WE

BELIEVE THAT AUDITORS SHOULD BE ABLE TO REPORT TO THE OF MATTERS

MATERIAL

THE CONCERN IN ORDER TO PROTECT

INTERESTS INVESTORS AND PRESERVE THE INTEGRITY OF THE MARKETS, SAID.

3FC OF

" THE SPOKESMAN

AUDITORS

SHOULD BE

IT IS ALSO CONSIDERED DESIRABLE THAT PROTECTED AGAINST ANY POSSIBLE LIABILITY THEY MIGHT INCUR IN RESPECT OF BREACH OF DUTY OF CONFIDENTIALITY TO CLIENTS WHEN COMMUNICATING GOOD FAITH TO THE SECURITIES AND FUTURES COMMISSION (SFC).

IN

SUCH PROTECTION IS ALREADY AVAILABLE IN RESPECT OF THE

BANKING

ORDINANCE.

"A CHANGE OR

MAY PROSPECTIVE CHANGE OF AN AUDITOR POSSIBLE IRREGULARITIES IN THE OPERATION OF A DEALER'S AFFAIRS COULD GIVE RISE TO PRUDENTIAL CONCERNS.

SIGNIFY WHICH

"IT IS THEREFORE PROPOSED THAT THE SFC SHOULD BE NOTIFIED OF THE SPOKESMAN SAID, ADDING ANY SUCH CHANGE BY THE DEALER CONCERNED, THAT FOR SIMILAR REASONS, AUDITORS SHOULD ALSO BE REQUIRED THE SFC OF THEIR INTENTION TO RESIGN OR TO QUALIFY ACCOUNTS.

TO INFORM

(NO.2)

THE SECURITIES AND FUTURES COMMISSION (AMENDMENT) 1991 ALSO SEEKS TO ALLOW MORE SPECIFICALLY FOR THE DISCLOSURE BY SFC OF INFORMATION RELATING TO AN AUDITOR TO THE HONG KONG SOCIETY ACCOUNTANTS FOR THE PURPOSE OF ANY DISCIPLINARY PROCEEDINGS.

THE BILLS ALSO SEEK TO EMPOWER THE COMMISSION TO REGISTRATION OF PERSONS WHO HAVE NEVER TRADED BEFORE.

BILL THE

OF

REVOKE

THE

THE

OF

THE SPOKESMAN EXPLAINED THAT UNDER THE EXISTING PROVISIONS COMMISSION CAN ROUTINELY SUSPEND OR REVOKE REGISTRATION ON GROUNDS CESSATION OF BUSINESS SO THAT THE COMMISSION MAY LIMIT REGISTRATION TO PERSONS ACTUALLY CONDUCTING A BUSINESS OR DEALING IN SECURITIES.

HOWEVER, BECAUSE OF THE WORDING OF THE EXISTING PROVISION, WHILE THE COMMISSION CAN REVOKE THE LICENCE OF PERSONS WHO HAVE CEASED

WHO PERSONS BUSINESS,

IS UNABLE TO REVOKE THE LICENCES OF NEVER COMMENCED BUSINESS.

IT

HAVE

OF DEALERS HAVE NEVER

IT WOULD NOT BE CONSISTENT WITH THE

POLICY EXISTING REVOCATION OF LICENCES OF INACTIVE DEALERS IF THE LICENCE OF WHO HAVE CEASED BUSINESS CAN BE REVOKED WHILE THOSE WHO CONDUCTED BUSINESS CANNOT BE REVOKED.

THE BILLS SEEK TO REDRESS THIS SHORTCOMING.

0

T

/10

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