XN000022-1996-10-30 — Page 47

30 -

Stock Exchange council members election system

Following is a question by the Hon Chim Pui-chung and a written reply by the acting Financial Services, Mrs Lessie Wei, in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council whether:

(a)

(b)

the existing election system for the Council members of the Stock Exchange of Hong Kong (SEHK) is being regulated by the Government or the Securities and Futures Commission; and

the Government is aware of the channel(s) through which members of the SEHK may seek to change the above election system?

Answer:

(a)

(b)

The Stock Exchange of Hong Kong Limited (SEHK) is a company incorporated in Hong Kong under the Companies Ordinance (Cap. 32) and is the Exchange Company recognised by the Securities and Futures Commission (SFC) for the purpose of the Stock Exchanges Unification Ordinance (Cap. 361) (the Ordinance). The mechanisms for election and appointment of members to the Council of the Exchange are provided under articles 86 to 95B of the articles of association of the Exchange. In accordance with section 3 of the Ordinance, the articles of association of the SEHK must be approved by the SFC. Taken together, it means that the election system for the Council members of the SEHK is being regulated by the SFC.

Under section 13 of the Companies Ordinance, a company may by special resolution alter or add to its articles of association. However, this provision by itself may not be applicable in the case of the SEHK to the extent that, in accordance with section 35 of the Ordinance, any changes in the articles of association require approval by the SFC before they can become effective. There are no other channels through which members of the SEHK may seek to change the election system.

End

+