ENG-1998 — Page 133

FINANCIAL AND MONETARY AFFAIRS

During the year, one commemorative $1,000 proof gold coin was issued to mark the opening of the Hong Kong International Airport in July 1998. The Gold Coin features a design symbolising Hong Kong's ascent into the new century, and bears the standard Bauhinia design on the other side.

Land Fund

The HKSAR Government Land Fund Trust was established on August 13, 1986. The Land Fund Trust was set up to manage the HKSAR's share of revenue obtained from land sales during the period commencing from the entry into force of the Joint Declaration (i.e. May 27, 1985) until the establishment of the HKSAR.

On July 1, 1997, the assets of the Land Fund Trust were vested in the HKSAR Government. The Chief Executive of the HKSAR appointed the Financial Secretary as the public officer to receive, hold and manage the fund, as part of the HKSAR Government reserves. Subsequently, the Land Fund was established by a resolution passed by the Provisional Legislative Council on July 23, 1997, under section 29 of the Public Finance Ordinance. Between July 1, 1997, and October 31, 1998, under the direction of the Financial Secretary, the Land Fund was managed by the HKMA as a portfolio separate from the Exchange Fund. The Land Fund Advisory Committee was established to advise the Financial Secretary on the investment strategy and management of the Land Fund.

The Financial Secretary announced in his Budget Speech in February 1998 that he intended to ask both the Land Fund Advisory Committee and the Exchange Fund Advisory Committee to examine how to maximise investment returns while minimising risk, and how to adjust the asset allocation of the two funds so that their investment policies can be aligned by April 1, 1999, as envisaged when the government took over the Land Fund. This will bring about administrative efficiency and economies of scale. As a result, the assets of the Land Fund, amounting to HK$211.4 billion, were merged into the Exchange Fund on November 1, 1998. The Hong Kong equities portfolio in the Land Fund is managed by Exchange Fund Investment Limited.

The Land Fund will continue to be administered in accordance with the Resolution of the Provisional Legislative Council in July 1997. The Land Fund, as in the case of other fiscal reserves placements will enjoy a return equivalent to the overall return of the Exchange Fund. After the merger, the Land Fund remains a separate government fund. The merger of the assets of the Land Fund into the Exchange Fund will not pre-empt consideration of the long-term use of the Land Fund, and any proposal in this regard is subject to approval by the Legislative Council in accordance with the Resolution establishing the Land Fund.

Companies Registry

The Companies Registry administers and enforces certain sections of the Companies Ordinance. It incorporates local companies, registers overseas companies, registers documents required to be submitted by registered companies and provides facilities for the search of company records. It also administers and enforces several other ordinances including the Trustee Ordinance, in so far as it relates to trust companies, the Registered Trustees Incorporation Ordinance and the Limited Partnerships Ordinance.

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