TNAG-1950-FCO40-2778-Hong-Kong-Exchange-Fund-1989 — Page 4

Fund, then a power to enter into such an arrangement will be implied by virtue of section 40.

4.

Having analysed both section 3(1) and (2) in isolution I now turn to the manner in which, in my opinion, section 3 (3) interacts with them.

Section 3(3) provides that the Financial Secretary

may borrow for the account of the Pund either in Hong Kong or elsewhere on the security of any asset. held by the Fund or on the deneral revenue."

The

It

Section 3(4) places limits on the aggregate arount of that type of borrowing. Both subsections (1) and (2) of section 3 are central provisions in this Ordinance. The purposes for which the Fund is used pursuant to section 3(1) are, arguably, the central purposes of the legislation. "investment" provisions of section 3(2) enable the Financial Secretary to increase the value of the Fund. is obvious that the larger the Fund the more effective use may be made of it pursuant to section 3(1). To that extent the two provisions may be said to be complementary; they appear to have a common object. In construing a statute it often assists to look at the overall objects of the legislation to see what its objects are. Section 19 of the Interpretation and General Clauses Ordinance provides that

•

"An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best

ensure the attainment of the object of the

Ordinance according to its true intent, meaning and spirit."

With this in mind I take the view that any argument seeking to justify statutory limitations on the powers, express and implied, conferred by section 3(1) or section 3(2) must found upon clear words strictly construed. It is clear that the legal advice you have received is to the effect that section 3 (3) is concerned with permitting two specific forms of secured borrowing. Insofar as the Financial Secretary seeks to use his powers under section 3(1) or section 3 (2) to borrow on the security of Exchange Fund

4.

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