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(b)

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Both sets of the Codes codify what are commonly referred to as best practice requirements expected of registered persons and SEHK members. These best practice requirements have been in existence in the days of the Securities Commission established in 1974 for ensuring that the Securities Ordinance was properly administered. They were the precursors of the Fit and Proper Criteria introduced in 1990 by SFC. As such, failure to comply with the requirements stipulated in the Codes, whether before or after the publication of the Codes, would reflect on the concerned person's ability to satisfy the fit and proper test in order to remain registered and on that person's conduct and business practices. Compliance with the Codes would indicate satisfaction of the relevant requirements under the Fit and Proper Criteria and therefore the question of retrospectivity does not arise.

The Codes of Conduct do not have the force of law and are not to be interpreted in a way that would override the provisions of any law. In the exercise of their powers, the SFC and SEHK are expected to give full effect to the spirit and letter of the laws and regulations which they administer and have due regard to other relevant laws affecting the performance of their functions including the Bill of Rights Ordinance.