XN000022-1995-06-21 — Page 68

-

50 -

Power of the Securities and Futures Commission

Following is a question by the Hon Chim Pui-chung and a written reply by the Secretary for Financial Services, Mr Michael Cartland, in the Legislative Council today (Wednesday):

Question:

Regarding the authority of the Securities and Futures Commission (SFC), will the Government inform this Council whether, apart from its power to impose penalties stipulated in the relevant legislation, the SFC has the power also to penalise the persons concerned under its own regulations; if so, whether those regulations are legally binding?

Answer:

The statutory functions of the SFC include, among other things, the enforcement of the law relating to securities and futures trading; the safeguarding of the interests of investors, and the suppression of illegal, dishonourable and improper practices in securities and futures dealings. For discharging these statutory functions effectively and transparently, the SFC has promulgated non- statutory codes and guidelines which lay down standards of practice and behaviour for securities and futures transactions in Hong Kong. Some of the codes and guidelines provide for sanctions such as private reprimand and public censure. The codes and guidelines do not have the force of law and in that sense are not legally binding. They are instruments which the SFC uses to discharge its statutory functions, and have been promulgated after consultations with the market.

End/Wednesday, June 21, 1995