XN000022-1994-10-11 — Page 8

7

-

TUESDAY, OCTOBER 11, 1994

AT PRESENT, THE SFC CAN DISCLOSE TO OVERSEAS REGULATORS NON- PUBLIC INFORMATION IN ITS POSSESSION PURSUANT TO THE SFC ORDINANCE AND THE LEVERAGED FOREIGN EXCHANGE TRADING ORDINANCE, SUBJECT

TO PUBLIC INTEREST CONSIDERATIONS.

HOWEVER, IT CANNOT ENTERTAIN REQUESTS FROM OVERSEAS AUTHORITIES FOR INVESTIGATORY ASSISTANCE UNLESS THE CASE ALSO INVOLVES A BREACH OF RELEVANT HONG KONG LAWS.

"THE GRADUAL INTERNATIONALISATION OF THE LOCAL MARKET HOWEVER MAKES IT INCREASINGLY IMPORTANT FOR THE SFC TO BE ABLE TO PROVIDE SUCH ASSISTANCE ON A RECIPROCAL BASIS, MR CARTLAND EXPLAINED.

HE SAID THE INTERNATIONAL REGULATORY COMMUNITY WAS PUTTING HEAVIER EMPHASIS ON CROSS-BORDER REGULATORY CO-OPERATION.

"THE INTERNATIONAL ORGANISATION OF SECURITIES COMMISSION

ADOPTED IN 1991 10 PRINCIPLES FOR CONCLUDING A (IOSCO)

BILATERAL OR MULTILATERAL MEMORANDUM OF UNDERSTANDING AMONG REGULATORS IN DIFFERENT JURISDICTIONS.

TO

"THE FIRST OF SUCH PRINCIPLES URGES REGULATORS WHO ARE NOT ABLE PROVIDE INVESTIGATORY ASSISTANCE TO OVERSEAS COUNTERPARTS TO CONSIDER RECOMMENDING APPROPRIATE LEGISLATIVE AMENDMENTS TO ENABLE SUCH ASSISTANCE TO BE GIVEN, MR CARTLAND SAID.

*T

THIS YEAR,

THE TECHNICAL COMMITTEE OF IOSCO CALLS FOR SELF- EVALUATION REPORTS FROM MEMBERS REGARDING THEIR ABILITY TO PROVIDE MUTUAL ASSISTANCE TO FOREIGN SECURITIES AND FUTURES REGULATORS.

"IT WOULD BE INAPPROPRIATE FOR OUR REGULATORY FRAMEWORK TO LAG BEHIND WORLD STANDARD.

MARKETS LEGISLATION IN MAJOR INTERNATIONAL ALREADY ALLOWS THEIR REGULATORS TO PROVIDE INVESTIGATORY ASSISTANCE TO THEIR

KONG COUNTERPARTS ELSEWHERE. THE RELEVANT LEGISLATION IN HONG SHOULD BE AMENDED ALONG SIMILAR LINES, MR CARTLAND SAID.

"THE

NEED

ADMINISTRATION IS NEVERTHELESS MINDFUL OF THE SUITABLY TO CIRCUMSCRIBE THE NEW PROVISIONS. FIRST, IT WILL NOT BE AN OBLIGATION FOR THE SFC AUTOMATICALLY TO PROVIDE ASSISTANCE ON REQUEST. IT WILL

AND OWN HAVE TO CONSIDER INDIVIDUAL CASES ON THEIR AGAINST CERTAIN CRITERIA," HE ADDED.

CRITERIA THE

MERITS

TO BE MET BEFORE ASSISTANCE CAN BE PROVIDED SIMILAR THAT THE FUNCTIONS OF THE REQUESTING PARTY SHOULD BE INCLUDE TO THOSE OF THE HONG KONG REGULATORY AUTHORITY AND THAT IT SHOULD SUBJECT TO ADEQUATE SECRECY PROVISIONS.

BE

FOR

THE CASES SHOULD INVOLVE SITUATIONS SIMILAR TO THE THE SFC TO INVOKE ITS POWERS FOR ITS OWN INVESTIGATIONS

THRESHOLDS

LOCALLY.

THE

INTEREST PROVIDE

BASIC PRINCIPLE IS THAT IT MUST EITHER BE IN THE OF THE PUBLIC OR THE INVESTING PUBLIC LOCALLY FOR THE SFC TO THE ASSISTANCE.

INDIVIDUAL

OF

ΤΟ

MR CARTLAND EMPHASISED THAT, WHEN CONSIDERING REQUESTS, THE SFC WOULD ALSO HAVE TO TAKE INTO ACCOUNT THE ABILITY THE REQUESTING AUTHORITY TO RECIPROCATE AND TO REIMBURSE THE COST BE INCURRED BY THE SFC.

/"THE PROPOSED