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FRIDAY, JUNE 17, 1994
GOVERNMENT CONSULTS ON LIST OF TRUSTEE INVESTMENTS
*
THE GOVERNMENT TODAY (FRIDAY) ISSUED A LIST OF AUTHORISED
PROPOSALS TO REVISE THE TRUSTEE ORDINANCE.
CONSULTATIVE PAPER ON INVESTMENTS UNDER THE
VIEWS AND COMMENTS ARE INVITED ON THE PROPOSALS UNTIL THE END OF NEXT MONTH (JULY}.
"THE STATUTORY LIST OF INVESTMENTS IS IMPORTANT FOR TRUSTEES WHO DO NOT HAVE SPECIFIC INVESTMENT POWERS UNDER A TRUST INSTRUMENT, OR WHERE THERE IS NO TRUST INSTRUMENT, A GOVERNMENT SPOKESMAN EXPLAINED.
"THE EXISTING LIST IS OUT OF DATE. THE LIST OF OVERSEAS INVESTMENTS, FOR EXAMPLE, RELIES VERY HEAVILY ON A LIMITED RANGE OF UK AND COMMONWEALTH INVESTMENT PRODUCTS.
"THERE HAVE BEEN CONSIDERABLE
DEVELOPMENTS IN FINANCIAL
MARKETS GENERALLY, AND IN THE INVESTMENT CLIMATE IN HONG KONG SINCE THE LIST WAS LAST REVISED IN 1984.
"THE CURRENT LIST IS ALSO IN NEED OF SIMPLIFICATION AND RATIONALISATION," THE SPOKESMAN ADDED.
THE PERMITTED INVESTMENTS ARE SPECIFIED IN THE SECOND SCHEDULE
TO THE TRUSTEE ORDINANCE.
A WORKING PARTY WAS SET UP UNDER THE FINANCIAL SERVICES BRANCH TO REVIEW ASPECTS OF THE TRUSTEE ORDINANCE.
THE WORKING PARTY IS PROPOSING TO REPLACE THE EXISTING LIST OF INVESTMENTS WITH A REVISED LIST WHICH IDENTIFIES VARIOUS BROAD CATEGORIES OF INVESTMENTS.
THE CATEGORIES ARE: CORPORATE SECURITIES, DEBT GOVERNMENTS AND MULTILATERAL AGENCIES, MUTUAL FUNDS AND CASH AND MONEY MARKET INVESTMENTS, FIRST LEGAL MORTGAGE AND ALSO DERIVATIVES FOR HEDGING PURPOSES ONLY.
SECURITIES OF
UNIT TRUSTS, OF PROPERTY,
"GENERALLY SPEAKING, INVESTMENTS IN PROPERTY AND DERIVATIVES WOULD BE CONSIDERED ΤΟ BE LESS SECURE THAN THE OTHER TYPES OF INVESTMENTS.
"THE INCLUSION OF THESE CATEGORIES IS TENTATIVE AT THIS WE WOULD LIKE TO RECEIVE FEEDBACK FROM THE PRIVATE SECTOR DESIRABILITY OF INCLUDING THESE ITEMS, THE SPOKESMAN SAID.
"I
1
STAGE.
ON THE
'THE PROPOSED REVISED LIST HAS RETAINED THOSE ELEMENTS OF THE EXISTING SCHEDULE THAT ARE STILL RELEVANT, BUT HAS BEEN RATIONALISED CONSIDERABLY.
IT
"IT IS ALSO CAPABLE OF BEING UPDATED AUTOMATICALLY, BECAUSE REFERS TO OTHER SOURCES OF INFORMATION THAT ARE UPDATED ON A REGULAR BASIS," HE ADDED.
UNDER THE PROPOSED REVISIONS, CREDIT RATINGS WILL BE AN ESSENTIAL CRITERION USED TO DETERMINE THE QUALITY OF AN INVESTMENT.
/LISTED CORPORATE
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