TNAG-1773-FCO40-2525-Hong-Kong-Exchange-Fund-Hong-Kong-Futures-Exchange-Limited--1988 — Page 96

CONFIDENTIAL

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36.

Paragraph 6(i) of the investment policy provides that the Fund may be employed in equities, subject to a maximum equivalent to 10% of the note and coin issue liabilities of the Fund and to the

approval of the Secretary of State. As at 31 December 1987, equity investments amounted to 3.94% of these liabilities (31 December 1986 : 5.07%). The basis upon which equity investments are valued is set out in paragraph 1(d) of the Notes on the Accounts on page 29.

CONFIDENTIAL