XN000022-1997-02-26 — Page 51

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SFC and SEHK Code of Conduct Regulations

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

Question:

In connection with the Code of Conduct (the Code) issued by the Securities and Futures Commission (SFC

in February 1994 to the persons registered with the SFC and the Code of Conduct Regulations (the Regulations) promulgated by the Stock Exchange of Hong Kong (SEHK) in November 1993, does the Government know whether:

(a)

(b)

Answer:

(a)

the above Code and Regulations have any retrospective effect; and whether a person who had breached the relevant provisions prior to the promulgation of the Code and Regulations will be subjected to disciplinary action; if so, what the reasons are; and

the SFC and the SEHK will be required to abide by the spirit of introducing the regulations when taking disciplinary action, so as to avoid violating the Bill of Rights?

The Code of Conduct for persons registered with the Securities and Futures Commission issued by the Securities and Futures Commission (SFC) applies to persons registered with the Securities and Futures Commission under the Securities Ordinance and Commodities Trading Ordinance (registered persons), such as dealers, investment advisers and commodities trading advisers.

The Code of Conduct Regulations promulgated by the Stock Exchange of Hong Kong (SEHK) expands on the Professional Conduct Rules contained in Chapter 6 of the SEHK's Rules and Regulations relating to conduct and business practices. The matters covered in the Code represent minimum standards of a Member as widely defined to include sales representatives, authorised clerks and other dealing employees on the Stock Exchange (SEHK members).

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