Hong Kong Ordinances

SECURITIES AND FUTURES ORDINANCE - SECT 87

Subrogation of recognized investor compensation company to rights, etc. of claimant on payment from compensation fund

(Past version on 01/04/2003).

(1) Where a recognized investor compensation company makes any payment out of
the compensation fund in respect of any claim made under rules made under Part
XII-

   (a)  subject to subsection (1A), the company shall be subrogated, to the
        extent which that payment bears to the loss sustained (without taking
        into account any compensation paid or payable out of the compensation
        fund for the loss) by the claimant by reason of the default on which
        the claim was based, to all the rights and remedies of the claimant in
        relation to the loss; and (Amended 7 of 2004 s. 55)

   (b)  the respective rights of the claimant and the company in bankruptcy or
        winding up or by legal proceedings or otherwise to receive in respect
        of the loss-

        (i)    any sum out of the assets of the person concerned who is in
               default; or

        (ii)   any property held on trust by that person for the claimant,
               shall rank equally.

(1A) The company is not subrogated to any rights and remedies of the claimant
in respect of compensation from the Deposit Protection Scheme Fund established
by section 14 of the Deposit Protection Scheme Ordinance ( Cap 581). (Added 7
of 2004 s. 55)

(2) All assets (whether in cash or otherwise) recovered by the recognized
investor compensation company under subsection (1) shall be dealt with in such
manner as the Commission may direct and shall become part of the compensation
fund.