XN000022-1993-07-07 — Page 41

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WEDNESDAY, JULY 7, 1993

THIS

SHOULD

NOT ONLY MAKE

THIS

USEFUL MR CARTLAND SAID PROVISION OPERATIONAL BUT WILL ALSO BRING HONG KONG PRACTICE GENERALLY INTO LINE WITH THE PROVISIONS OF SIMILAR LEGISLATION ELSEWHERE.

FLEXIBILITY FOR AN THE BILL ALSO PROPOSES TO ALLOW GREATER INSPECTOR APPOINTED FOR A FULL-SCALE INVESTIGATION TO POWER.

DELEGATE

HIS

"THIS SHOULD HELP TO SPEED UP THE PROGRESS AND TO CONTAIN COSTS," HE SAID.

OF INVESTIGATIONS

DEBATE ON THE BILL WAS ADJOURNED.

0

SECURITIES LEVY TO BE ORDERLY SUSPENDED

* * *

THE INTRODUCTION OF THE EXCHANGES (SPECIAL LEVY) (AMENDMENT) BILL 1993 TO THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) REPRESENTS THE FINAL STEP TOWARDS CLEARING UP THE LAST OUTSTANDING ISSUE LEFT OVER FROM THE 1987 STOCK MARKET CRASH.

THE COMMENT WAS MADE BY THE SECRETARY FOR FINANCIAL SERVICES, MR MICHAEL CARTLAND, WHEN HE MOVED THE SECOND READING OF THE BILL.

THE BILL AIMS AT AMENDING THE LAW FOR AN ORDERLY WINDING DOWN OF THE SPECIAL LEVY ON SECURITIES TRANSACTIONS AS WELL AS STOCK INDEX FUTURES AND OPTIONS CONTRACTS FOR REPAYING PART OF A LIFEBOAT LOAN.

THE

LOAN WAS RAISED AFTER THE MARKET CRASH TO ENABLE THE HONG KONG FUTURES GUARANTEE CORPORATION TO MEET ITS OBLIGATIONS. ANOTHER SOURCE OF REPAYMENT IS RECOVERIES FROM DEFAULTERS.

WITH THE HIGH TURNOVER OF THE STOCK MARKET CONTINUING SINCE THE BEGINNING OF THIS YEAR, IT IS ESTIMATED THAT THE PORTION OF THE LOAN ΤΟ BE RECOVERED FROM THE SPECIAL LEVY COULD BE FULLY REPAID BY AS EARLY AS AUGUST THIS YEAR, AFTER PROVISIONS HAVE BEEN MADE то MEET INTEREST AND OTHER COSTS.

"NOW IS THEREFORE THE APPROPRIATE TIME TO PROCEED ΤΟ SUSPEND THE SPECIAL LEVY, OTHERWISE A BIG SURPLUS IN THE ORDER OF $100 MILLION ΤΟ $200 MILLION COULD BE CREATED IN THE SPECIAL LEVY FUND BY THE END OF THE YEAR, MR CARTLAND SAID.

"

THE AMENDMENTS WILL ENABLE THE GOVERNMENT TO SUSPEND THE LEVY WHEN THE REMAINING BALANCE OF THE LIFEBOAT LOAN APPROXIMATES THE REMAINING OBLIGATION OF THE DEFAULTERS.

WHICH

HE SAID UPON FINAL REPAYMENT OF THE LOAN BY DEFAULTERS, EXPECTED TO BE EFFECTED BY 1996, THE SPECIAL LEVY WOULD BE FORMALLY ABOLISHED.

WAS

HOWEVER, IN THE MEANTIME, THE GOVERNOR IN COUNCIL MAY RE- INTRODUCE THE SPECIAL LEVY AFTER ITS SUSPENSION SHOULD CIRCUMSTANCES DEMAND IT, HE ADDED.

/ON THE