Hong Kong Ordinances

SECURITIES AND FUTURES ORDINANCE - SECT 118

Licensing conditions in certain cases

(1) Without limiting the generality of section 116(6), it shall be a condition
of a licence granted under section 116(1) for carrying on-

   (a)  a regulated activity-

        (i)    that the licensed corporation- (A) shall lodge (whether or not
               in addition to any security that it may have lodged) and
               maintain with the Commission such security in respect of that
               regulated activity as may be required by rules made under
               section  116 (4); or (B) is insured, in lieu of lodging (where
               applicable) and maintaining such security, in accordance with
               rules made under section  116 (5); and

        (ii)   that, in relation to the regulated activity, there is at least
               one responsible officer of the licensed corporation who is
               available at all times to supervise the business of the
               regulated activity for which the corporation is licensed;

   (b)  Type 3 regulated activity, that in relation to any dispute between the
        licensed corporation and a client regarding or touching upon any
        matter concerning the carrying on of that regulated activity, the
        licensed corporation is obliged, if the client so requires, to have
        the dispute settled by arbitration in accordance with rules made under
        subsection (2);

   (c)  Type 7 regulated activity, that if the Commission in its absolute
        discretion requires by notice in writing, the licensed corporation
        shall apply, within such reasonable period as may be specified in the
        notice, for an authorization under section 95(2) for that regulated
        activity, and the regulated activity shall be operated in such manner
        as may be specified in the notice pending the revocation of the
        licence under section 195(2);

   (d)  Type 8 regulated activity, that-

        (i)    the licensed corporation shall carry on no business other than
               securities margin financing, except business that is
               necessarily incidental to the carrying on of such business; and

        (ii)   where the licensed corporation carries on a business in one or
               more of the activities specified in Part 3 of Schedule 5, it
               shall comply with the requirements of such rules made under
               Part VI as apply to it in relation to such business.

(2) The Commission may make rules for the purposes of subsection

(1)(b) that provide for-

   (a)  the establishment and functions of an arbitration panel and relevant
        matters;

   (b)  the appointment by the Financial Secretary of members of the
        arbitration panel, including a chairman and one or more than one
        deputy chairman;

   (c)  the appointment from the arbitration panel of a tribunal to hear a
        dispute between a licensed corporation and its client and the
        constitution and composition of the tribunal;

   (d)  the liability or entitlement to costs of a party to a dispute and the
        recovery of costs;

   (e)  the practice and procedure in the hearing of a dispute;

   (f)  the Commission to use the findings of a tribunal for performing its
        functions under any of the relevant provisions;

   (g)  the exercise of any discretion by a person under the rules.