XN000022-1992-03-25 — Page 10

WEDNESDAY, MARCH 25, 1992

"ON OCTOBER 31, 1991 THE CROWN SOLICITOR ACCORDINGLY DREW THE ATTENTION OF THE COMMISSIONER TO THE REQUIREMENT IN SECTION 12(6).

"FOLLOWING THIS LETTER BOTH THE COMMISSIONER OF BANKING AND THE SECRETARY FOR MONETARY AFFAIRS APPEARED BEFORE THE COMMISSIONER FOR ADMINISTRATIVE COMPLAINTS AND HAD THE OPPORTUNITY OF MAKING REPRESENTATIONS, MR MATHEWS SAID.

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REGULATION OF FRINGE FOREIGN EXCHANGE FIRMS BEING CONSIDERED

* * * * * *

AN INTER-DEPARTMENTAL WORKING GROUP IS WORKING ON A LEGISLATIVE FRAMEWORK TO REGULATE FRINGE FOREIGN EXCHANGE COMPANIES THROUGH LICENCING AND CONSIDERATION IS BEING GIVEN TO THE LEVEL AT WHICH THE LICENSING CRITERIA WOULD BE PITCHED.

THIS WAS STATED BY THE SECRETARY FOR MONETARY AFFAIRS, MR DAVID NENDICK, AT THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

IN A WRITTEN REPLY TO A QUESTION BY THE HON JAMES TO, MR NENDICK SAID THE APPROACH WAS EXPECTED TO REQUIRE CONSIDERABLE FINANCIAL RESOURCES FOR THE LICENSING, SUPERVISION AND ENFORCEMENT WORK, WHICH WOULD HAVE то BE ASSESSED AS USUAL THROUGH THE GOVERNMENT'S RESOURCE ALLOCATION SYSTEM.

HE POINTED OUT THAT THE HONG KONG FUTURES EXCHANGE WAS WORKING ON AN ALTERNATIVE APPROACH WHICH WOULD INVOLVE ESTABLISHING UNDER ITS AUSPICES A RETAIL CURRENCY MARKET AIMED AT PROVIDING A MORE PRUDENT ALTERNATIVE TO INVESTORS THAN THE EXISTING FRINGE MARKET.

"THE FUTURES EXCHANGE IS DRAWING UP THE DETAILS OF IT'S PROPOSAL AND EXPECTS TO COMPLETE THIS WORK WITHIN THE NEXT FEW MONTHS, WHEN IT WILL CONSULT THE GOVERNMENT AND THE SECURITIES AND FUTURES COMMISSION," HE SAID.

AT PRESENT, IT IS ESTIMATED THAT THERE ARE ABOUT 300 TO FRINGE FOREIGN EXCHANGE COMPANIES IN HONG KONG.

400

THEY ARE NOT SUBJECT TO LICENSING OR REGISTRATION AND FALL OUTSIDE EXISTING FIELDS OF SUPERVISION AND REGULATION.

WILL

THERE ARE THEREFORE NO SPECIFIC MEASURES ΤΟ MONITOR THEIR ACTIVITIES. ON RECEIPT OF COMPLAINTS FROM THE PUBLIC, THE POLICE TAKE APPROPRIATE INVESTIGATION ACTIONS.

ACCORDING TO THE RECORDS OF THE COMMERCIAL CRIME BUREAU OF POLICE, A TOTAL OF 80 COMPLAINTS HAVE BEEN RECEIVED IN THE PAST YEARS AGAINST SUCH COMPANIES.

THE

TWO

/THE REPORTED

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