Hong Kong Ordinances

SECURITIES AND FUTURES ORDINANCE - SECT 397

Rules by Commission

(1) The Commission may make rules to-

   (a)  provide for applications for licence and registration, the issue of
        licences and certificates of registration, and incidental matters;

   (b)  require the display of licences and certificates of registration in
        the specified manner and circumstances and at specified places, and
        require that licences and certificates of registration are in
        specified circumstances, other than those specified in any provision
        of this Ordinance, to be returned to the Commission for any specified
        purpose;

   (c)  require intermediaries to carry on business in relation to a specified
        class of persons, and in the specified manner and circumstances;

   (d)  prescribe the qualifications, experience and training required of any
        persons employed or engaged by intermediaries, and provide for the
        obligations imposed on the persons and the intermediaries in relation
        to such requirements, the examinations that applicants for licence or
        registration are required to take, and the circumstances in which they
        may be exempted from such requirements;

   (e)  provide for the correction of errors in the register maintained by the
        Commission under section 136;

   (f)  provide for the admissibility in evidence in judicial or other
        proceedings of specified records, and extracts from specified records,
        kept by the Commission;

   (g)  require documents and information required to be lodged, filed,
        submitted or retained for the purposes of any provision of this
        Ordinance to be so lodged, filed, submitted or retained in the
        specified manner, whether by electronic or other means;

   (h)  require documents and information lodged, filed, submitted or retained
        for the purposes of any provision of this Ordinance in any specified
        manner to be completed, signed, executed and authenticated in the
        specified form and manner;

   (i)  specify whether, when and the circumstances in which records compiled
        in any specified form or manner, or documents or information
        completed, signed, executed or authenticated in any specified form or
        manner, are acceptable or required for the purposes of any provision
        of this Ordinance;

   (j)  require the payment of remuneration to any auditor appointed, and the
        costs of an audit carried out, under any provision of this Ordinance,
        and provide for matters relating to such remuneration and costs;

   (k)  require a person of a specified description, when selling securities
        at or through a recognized stock market where his right to vest the
        securities in the purchaser (or, where he is acting as agent, his
        principal's right to do so) is derived from an arrangement of a
        specified kind, to notify the exchange participant through whom the
        sale is being effected of the fact that the right to vest the
        securities in the purchaser is derived from such an arrangement, and
        require the person who, having sold such securities pursuant to such
        an arrangement, purchases securities at or through a recognized
        stock market in satisfaction, in whole or in part, of his obligations
        under the arrangement to notify the exchange participant through whom
        the purchase or purchases is or are being effected of that fact;

   (l)  require a lender under a securities borrowing and lending agreement
        to-

        (i)    keep specified records or documents in the specified form and
               manner; and

        (ii)   give copies of such records or documents to the Commission at
               its request in the specified form and manner and within the
               specified time;

   (m)  require intermediaries to make returns at specified times

(whether at regular intervals or otherwise) to the Commission, and provide for
the particulars, or the nature of particulars, to be contained therein, the
person by whom, and the manner and circumstances in which they are to be made,
and other matters related to such returns;

   (n)  require a form or return required to be submitted under any provision
        of this Ordinance to be received by the Commission by or within the
        specified time;

   (o)  prescribe, specify or provide for any matter which this Ordinance
        provides is, or may be, prescribed, specified or provided for by rules
        made under this section;

   (p)  provide for any other matters for the better carrying out of the
        objects and purposes of this Ordinance.

(2) In addition to the power to make rules under subsection (1), the
Commission may, after consultation with the Financial Secretary, make such
other rules as are necessary for the furtherance of any of its regulatory
objectives and the performance of any of its functions.

(3) Notwithstanding anything in this section-

   (a)  the power of the Commission to make rules under this section in
        respect of any persons as intermediaries shall, where the
        intermediaries are registered institutions, be regarded as the power
        to make rules in respect of the intermediaries only in relation to the
        businesses which constitute any regulated activities for which they
        are registered;

   (b)  the power of the Commission to make rules under this section in
        respect of any persons as associated entities shall, where the
        associated entities are authorized financial institutions, be regarded
        as the power to make rules in respect of the associated entities only
        in relation to their businesses of receiving or holding client assets
        of intermediaries of which they are associated entities.

(4) For the avoidance of doubt, the powers of the Commission to make rules
under this section are in addition to and not in derogation of any other power
of the Commission to make rules under any provision of this or any other
Ordinance.