TNAG-1943-FCO40-2769-Stock-market-and-exchange-rate-in-Hong-Kong-1989 — Page 313

7.

5

Powers of intervention

These powers are based upon those contained in sections 64 to 71 of the Financial Services Act of the U.K. In the light of experience there, it has been decided to reduce the number and scope of these powers from those which were proposed in the draft clauses earlier circulated, at any rate at this first stage in the modernisation and improvement of securities legislation in Hong Kong.

The powers which it is intended to take in the present Bill are as follows

(a)

(b)

(c)

the

A power to restrict or stop any business activity being carried on by a registered person, or to require him to carry on his business in a particular way.

A

power to prohibit a registered person from disposing of assets or to require him to deal with his assets in a particular way.

A power to require a registered person to maintain assets in Hong Kong or elsewhere up to a level sufficient to enable him to meet his liabilities.

It is not now intended to include in this Bill a power, as there is in the Financial Services Act, to vest assets in a trustee, or, as was included in draft clauses, a power to take control of the registered person's business or to order him to take any action or refrain from taking any action in relation to his business. These additional matters give rise to problems which require further consideration and consultation, and will be reconsidered after the enactment of the present Bill.

It is emphasised that the intervention powers would only be used in extreme circumstances. The Bill will state explicitly that the preconditions for exercise of the powers are:

The

where it is considered desirable in the interest of the investing public,

on

if the registered person is not a fit and proper person to carry on his business, or

if the registered person has contravened any of the ordinances or regulations.

Bill will provide that the Commission will be obliged to notify the Stock Exchange or the Futures Exchange before exercising any intervention power against one of its members.

The Commission will intervention in its take effect at the date of the notice, retroactive effect.

also have to state its reasons for exercising a power of notice to the registered person concerned. Notices will time specified in them which cannot be earlier than the

that is to

say, there is no question of their having