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5.
At present section 65B of the
Securities Ordinance, which lays down the existing financial resources rule, is incapable of being waived or modified in individual cases. It is therefore intended to permit the Commission to overcome the difficulties created by this inflexibility by taking power to waive or modify in appropriate cases. This amendment would also facilitate a review by the Commission and the eventual elimination of the exempt dealer category, as recommended by the Securities Review Committee. The Commission will be undertaking this review, and at the same time will draw up guidelines for the waiver or modification of the capital requirements. It is intended to consult fully with all bodies which would be affected. In particular, before financial resources rules become applicable to institutions authorised under the Banking Ordinance, there would be full consultation with the Commissioner of Banking and with the institutions concerned, so that account can be taken of the requirements for capital and liquidity under that Ordinance.
The Commission will have power to rely upon the supervision of other supervisory bodies, such as the Commissioner of Banking.
Supervision and Information
The Commission intends to make spot checks in order to see that compliance is being made with the Ordinances and rules, and for this purpose each registered person will be under obligation to make available to officers of the Commission on request all records asked for, including details of transactions carried out. by the registered person for clients. These requirements are already included in the Securities Ordinance (sections 122 and 123), but there is no corresponding provision in the Commodities Trading Ordinance, and the Bill will fill this gap.
Registered persons will be under obligation to give access to their records to officers of the Commission, who will have the right to enter the business premises notified to the Commission where records are to be kept. It is important to be clear that this right of access will not extend to any premises other than those notified to the Commission, and that there will be no powers of forcible entry or seizure of documents. If access is refused, and the circumstances appear to justify it, the Commission will apply for a magistrate's warrant in the ordinary way.
A most careful note has been taken of the objections which have been raised to the powers of entry which were proposed in the draft clauses earlier circulated, and it will be observed that powers of entry under this head are provided for in a way which is closely parallel to an examiner's powers under the Banking
Banking Ordinance, and which it is considered are both reasonable and necessary for the proper discharge of the Commission's duties.
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