ENG-2001 — Page 131

FINANCIAL AND MONETARY AFFAIRS

Debt issuance is the mainstay of the HKMC's funding sources. Through debt issuing activities, the HKMC is able to achieve the objective of promoting the development of the Hong Kong dollar debt capital market. In 2001, the HKMC successfully issued 26 debt issues for a total amount of $15.6 billion under its $20 billion Note Issuance Programme (NIP), $20 billion Debt Issuance Programme (DIP) and through the retail bond issuance scheme, making it the most active corporate issuer of fixed rate debt securities in Hong Kong. At the end of 2001, the outstanding balance of HKMC's debt securities stood at $20.1 billion. The HKMC debt securities were well received by financial institutions, as well as institutional and retail investors. The over-subscription rate of the notes issued in 2001 averaged 6.8 times. To help develop the retail debt market, the HKMC listed the NIP on the Stock Exchange of Hong Kong in October 1999 and launched its debut retail tranche notes under the NIP at the same time. The HKMC introduced a new arrangement of issuing retail bonds through banks as placing agents in October. The debut issue was met with strong demand by retail investors with a total subscription amount of $651 million, setting a record in the local retail bond market.

Companies Registry

The Companies Registry administers and enforces the greater part of the Companies Ordinance. The Registry incorporates local companies, registers oversea 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, insofar as it relates to trust companies, the Registered Trustees Incorporation Ordinance and the Limited Partnerships Ordinance. The Registry is also responsible for a wide range of legal, policy and regulatory issues. In this respect, it is playing an important role in the Companies Ordinance and Corporate Governance reviews.

Since 1993, the Companies Registry has operated as a trading fund department. As a trading fund, the Registry can keep most of its income and apply it flexibly, having regard to its needs, business turnover and its customers' demands and expectations. The 2000-2001 financial year saw a moderate growth in business volumes in its core services and the department achieved a surplus of $42 million. Over the past years, the Registry has built up a healthy level of financial reserves which will help finance its expenditure on capital projects in order to improve the quality and efficiency of its

services.

The Registry has taken action to implement a Strategic Change Plan (SCP) developed in June 2000 to transform the department from a largely paper based to a fully computerised operation by late 2004. The implementation of the SCP will re-engineer the department's business processes, bringing significant improvements in service delivery and substantial benefits to the business community. The Registry is committed to implementing the key initiatives and recommendations set out in the SCP. A core initiative is the development of an Integrated Companies Registry Information System (ICRIS) in two phases to replace the existing computer systems and enable the delivery of high quality and electronic services in filing, processing, and searching documents or information. The feasibility study for the ICRIS was completed in May and the tendering exercise to implement the system is under way.

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