CONFIDENTIAL
XCCI(91)42
provision allowing some candidates standing for election to the Council to by-pass the Nominating Committee. These differences are necessary in part to take account of the fact that voting by proxy at Council elections will not be abolished, at least within the time scale required for it to take effect before the next Council election which must be held by 31 December 1991. A table setting out the differences between the two packages is at the Annex. The Administration was closely involved in the formulation of both the compromise and statutory packages.
Way Forward
4
The SEHK has been requested to introduce voluntarily within 45 days the amendments requested by the SFC. In order to ensure that the rules of natural justice are complied with, the SFC has also invited the SEHK to make any representations it wishes in connection with the request. (The SFC has indicated that if the SEHK succeeded in persuading its members to pass the voluntary package during this period, it would maintain its earlier decision not to oppose that package and the statutory request would be allowed to lapse.)
5
If the SEHK does not make the amendments within the notice period, subject to consideration of any representations which the SEHK may make and to prior consultation with the Financial Secretary, the SFC may issue a Restriction Notice under section 50 of the Securities and Futures Commission Ordinance which would bring the requested amendments into effect.
6
After the Restriction Notice has been issued, the SEHK has the right to appeal against the Notice to the Governor-in-Council, if it so wishes.
7
The SFC has also decided to recommend to Government that the two proposed amendments to the Stock Exchanges Unification Ordinance (Chapter 361) (to abolish voting by proxy at Council elections and to specify that the SEHK's primary duty is to maintain a fair and orderly market and to require it to act in the public interest in discharging this duty), which formed part of the SEHK voluntary package, should be proceeded with. The SFC has privately indicated a willingness to consider reinstating the concession that a proportion of the candidates standing for election to the
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