ENG-1982 — Page 79

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FINANCIAL SYSTEM AND ECONOMY

came to hold 35 per cent or more of the voting shares of the offeree. There were also six instances of the acquisition of substantial minority stakes where shareholdings of less than 35 per cent of the voting shares were acquired. There were two instances of companies 'going public', nine rights issues and four 'shell' companies were re-activated.

During 1982, the office of the Commissioner for Securities, acting as the executive arm of the Committee on Unit Trusts, a sub-committee of the Securities Commission, continued to administer the Hong Kong Code on Unit Trusts and Mutual Funds. The number of unit trusts and mutual funds which received authorisation under the Securities Ordinance, on the recommendation of the Committee on Unit Trusts, was 15. During the year, one unit trust had its authorisation withdrawn. The total number of authorised unit trusts and mutual funds at December 31, 1982, was 87.

The combined Stock Exchanges Compensation Fund, established to compensate those who suffer pecuniary loss as a result of defaults by stockbrokers, amounted to $25 million on December 31, 1982. Deposits lodged by dealers other than stockbrokers stood at $12 million. The purpose of these deposits is to give some protection to investors against any defaults by dealers who are not members of a stock exchange.

At the end of 1982, 2931 individuals and corporations were registered under the Securities (Dealers, Investments Advisers and Representatives) Regulations 1974.

Commodity Exchange and Gold Markets

The Hong Kong Commodity Exchange Limited is the one company licensed under the Commodities Trading Ordinance to operate a commodity exchange trading in futures contracts in Hong Kong. It operates four futures markets: cotton, sugar, soybeans and gold. The turnovers reported on these four markets for 1982 were: cotton, no trading; sugar, 350 977 lots of 50 long tons each; soybeans, 747 943 lots of 30 000 kg each; gold, 10 910 lots of 100 troy ounces each.

In June 1982, the Commodities Trading Ordinance was amended so as to increase substantially the penalties for dealing by unregistered dealers. The ordinance now provides for a maximum penalty of $500,000 and five years' imprisonment for carrying on a business of dealing in commodity futures contracts while unregistered.

A working party was established during the year, under the chairmanship of the Commissioner for Commodities Trading, to review the operation of the Hong Kong Commodity Exchange and to consider whether the terms of the exchange's licence require modification. A major review of the Commodities Trading Ordinance has also been put in hand. The Hong Kong Commodity Exchange had set up a working party to study the possible establishment of a financial futures market.

At the end of 1982, 1483 individuals, corporations and firms were registered under the Commodities Trading (Dealers, Commodity Trading Advisers and Representatives) Regulations 1976.

The Commodity Exchange Compensation Fund, established to compensate those who suffer pecuniary loss as a result of default by shareholders of the exchange, amounted to $8 million at the end of the year. Deposits lodged by dealers, other than shareholders of the Hong Kong Commodity Exchange, stood at $1 million. The purpose of these deposits is to give some protection to investors against any defaults by dealers who are not shareholders of the exchange.

Trading in gold on the Chinese Gold and Silver Exchange Society was fairly active in 1982, while membership of the society remained closed at 194 member firms. Prices, after allowing for exchange rate fluctuations, paralleled those in the other major markets of