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Inland Revenue (Amendment) (No 3) Bill: clauses 2 and 3

Following is the speech by the Secretary for the Treasury, Mr K C Kwong, at the committee stage to amend clauses 2 and 3 of the Inland Revenue (Amendment) (No 3) Bill 1996 in the Legislative Council today (Wednesday):

Mr Chairman,

I move that Clauses 2 and 3 be amended as set out in the paper circulated to Members.

The amendment to Clause 2(1)(a) of the Bill seeks to add the term "Unified Exchange" to the section and the term will have the same meaning as that in the Stamp Duty Ordinance for the sake of consistency.

The amendment to Clause 2(1)(b) seeks to ensure that the term "specified securities" under the Bill will cover Hong Kong stocks the sale and purchase of which in Hong Kong are not subject to the rules and procedures of the Unified Exchange.

The amendment to Clause 2(2), by amending proposed section 15E(9) and adding a new subsection 10, seeks to ensure that "specified securities" under the Bill would be covered by provisions on stock borrowing and lending in the Inland Revenue Ordinance. For consistency purpose, the meaning of terms involved in the definition of "specified securities", i.e. "Hong Kong stock", "unit" and "unit trust scheme" will be the same in the relevant provisions of the Inland Revenue Ordinance and the Stamp Duty Ordinance.

The amendment to section 20AA(3) in Clause 3 seeks to ensure that under the Bill, transactions of a non-resident investor arising from the activities of an approved investment adviser will be taken as "carried out through" the adviser.

The amendment to section 20AA(6) in Clause 3 seeks to remove the reference to section 20AB in the proposed section 20AA and extends the meaning of broker and approved investment adviser under the Bill to include dealers and investment advisers exempt from registration under the Securities Ordinance.

The remaining amendment to Clause 3 seeks to delete section 20AB which is to be replaced by the new Clause 4. I will explain the operation of the new clause later on when I deal with the Committee Stage Amendment for adding a new clause to the Bill.

Mr Chairman, I beg to move.

End