XN000022-1993-07-07 — Page 37

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WEDNESDAY, JULY 7, 1993

MORE LEGAL MUSCLES PROPOSED TO REGULATE LISTED COMPANIES

LEGISLATIVE PROPOSALS DESIGNED TO BETTER EQUIP THE SECURITIES AND FUTURES COMMISSION TO FULFIL ITS ROLE AS THE LEAD REGULATOR ON LISTED COMPANIES WERE TABLED AT THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

MOVING THE SECOND READING OF THE SECURITIES AND FUTURES COMMISSION (AMENDMENT) BILL 1993, THE SECRETARY FOR FINANCIAL SERVICES, MR MICHAEL CARTLAND, SAID THESE PROPOSALS WOULD SUPPLEMENT THE INVESTIGATORY POWER OF THE COMMISSION WHILE MINIMISING POSSIBLE OVERLAP OF RESPONSIBILITIES OF DIFFERENT REGULATORS.

UNDER THE BILL, THE COMMISSION WILL BE PROVIDED WITH THE POWER TO CONDUCT PRELIMINARY INSPECTIONS ON RECORDS AND DOCUMENTS OF LISTED COMPANIES.

AS A REGULATOR OF LISTED COMPANIES, THE COMMISSION ENCOUNTERS FROM TIME TO TIME CIRCUMSTANCES SUGGESTING FRAUD, MISFEASANCE OR MISCONDUCT IN THE MANAGEMENT OF THE AFFAIRS OF THESE COMPANIES AS WELL AS FAILURE BY THEM TO DISCLOSE INFORMATION TO THEIR SHAREHOLDERS.

AT PRESENT, THE COMMISSION DOES NOT HAVE THE STATUTORY AUTHORITY TO INVESTIGATE SUCH CASES.

"THIS IS CONSIDERED UNDESIRABLE SINCE THE COMMISSION IS DENIED OPPORTUNITY TO TAKE PROMPT INVESTIGATORY ACTIONS AT THE EARLIEST OPPORTUNITY," HE SAID.

THE

IT

TO FACILITATE THE EFFECTIVE REGULATION OF LISTED COMPANIES, IS PROPOSED THAT THE COMMISSION BE PROVIDED WITH THE POWER TO INITIATE PRELIMINARY INSPECTIONS ON RECORDS AND DOCUMENTS OF LISTED COMPANIES.

IT IS ALSO PROPOSED THAT THE COMMISSION BE ALLOWED TO APPLY ΤΟ THE COURTS FOR ORDERS TO PROTECT THE INTERESTS OF SHAREHOLDERS OF LISTED COMPANIES.

MR CARTLAND SAID IN ANY EVENT, THE COMMISSION MUST CONSULT THE MONETARY AUTHORITY BEFORE ANY AUTHORISED INSTITUTIONS OR THEIR RELATED COMPANIES COULD BE REQUIRED TO PRODUCE RECORDS AND

FOR INSPECTION.

DOCUMENTS

FURTHERMORE,

THE POWER TO APPLY FOR COURT ORDERS

WOULD NOT

APPLY TO AUTHORISED INSTITUTIONS.

AS REGARDS AUTHORISED INSURERS UNDER THE INSURANCE COMPANIES ORDINANCE, NO EXEMPTION WILL BE GIVEN BUT THE COMMISSION WILL NEED TO CONSULT THE INSURANCE AUTHORITY BEFORE REQUIRING SUCH PRODUCE THEIR RECORDS AND DOCUMENTS.

COMPANIES

то

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