Hong Kong's Securities and Futures Commission (SFC) has finalized its proposals for the creation of a new Investor Compensation Fund.
The principle features of the SFC's proposals detailed in a consultation paper provide for compensation of up to HK$150,000 for losses incurred in the event of a brokerage collapse. The Commission states that the Fund would provide coverage for the following groups: all exchange participants of the Stock Exchange of Hong Kong Ltd (SEHK) and the Hong Kong Futures Exchange Ltd (HKFE) trading in Hong Kong Exchanges and Clearing Ltd (HKEx) products [and] non-exchange participants who are licensed securities dealers, licensed commodity dealers, licensed margin financiers and exempt dealers (authorized institutions under the Banking Ordinance) trading in HKEx products.
The new Investor Compensation Fund will replace and combine the total assets of the existing funds: the Unified Exchange Compensation Fund, the Commodity Exchange Compensation Fund and the Dealers' Deposit Schemes for non-exchange participants.
Furthermore, an independent Investor Compensation Company (ICC) would be established to manage the new fund and determine the validity of any claims for compensation. The commission explains that funding for the scheme would 'be derived from a transfer of assets from the existing compensation funds (after retainng an amount required to pay prior claims made), plus additional funds from an increase of 0.002% in the levy on transactions on SEHK.'
The SFC said in a statement: 'The existing transaction levy on the transactions on SEHK will be increased form 0.01% to 0.012% so that the additional 0.002% of the levy would eventually go to the new Fund when it is formed. The existing $0.5 levy for each side of a contract executed on HKFE would continue unchanged.'
According to the consultation paper, the new fund aims to establish reserves of HK$1 billion in order to provide 'reasonable protection to investors trading in Hong Kong securities and futures products.' The Commission believes that the new arrangements will further enhance the confidence of retail investors trading in Hong Kong's securities and futures markets. The consultation period ends on April 6, 2001, by which time all written comments should be submitted.
The full details of the Commission's consultation paper can be found at: http://www.hksfc.org.hk/eng/bills/html/consultation/compfund consult_frame.html
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment