LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - CHAPTER 451A LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - LONG TITLE Empowering section (Repealed 5 of 2002 s. 406) VerDate:01/04/2003 LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - LONG TITLE Empowering section VerDate:30/06/1997 (Cap 451 sections 29 and 73) [1 September 1994] L.N. 482 of 1994 (L.N. 437 of 1994) LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - SECT 1 (Omitted as spent) VerDate:30/06/1997 (Omitted as spent) LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - SECT 2 (Repealed L.N. 13 of 2003) VerDate:01/04/2003 LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - SECT 2 Forms of profit and loss account and balance sheet VerDate:30/06/1997 (1) The profit and loss account of a licensed leveraged foreign exchange trader which is required to be prepared under section 29(1) of the Ordinance shall contain the particulars set out in Part 1 of the Schedule and paragraphs 13 to 17 of the Tenth Schedule to the Companies Ordinance (Cap 32). (2) The balance sheet of a licensed leveraged foreign exchange trader which is required to be prepared under section 29(1) of the Ordinance shall contain the particulars set out in Part 2 of the Schedule and paragraphs 2 to 12 of the Tenth Schedule to the Companies Ordinance (Cap 32), and shall be accompanied by a computation of its liquid capital for the purposes of the Leveraged Foreign Exchange Trading (Financial Resources) Rules (Cap 451 sub. leg.). (Enacted 1994) LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - SECT 3 (Repealed 5 of 2002 s. 406) VerDate:01/04/2003 LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - SECT 3 Auditor's report VerDate:30/06/1997 An auditor's report under section 29(1) of the Ordinance shall contain a statement by the auditor as to whether- (a) he has audited the financial statements of the licensed leveraged foreign exchange trader in accordance with the Auditing Standards issued by the Hong Kong Society of Accountants; (b) he has obtained all the information and explanations which to the best of his knowledge and belief are necessary for the purpose of the audit; (c) in the auditor's opinion- (i) the financial statements give a true and fair view of the state of affairs of the licensed leveraged foreign exchange trader as at the end of the financial period and of the profit or loss and cash flows of the licensed leveraged foreign exchange trader for the period then ended and have been properly prepared in accordance with the Companies Ordinance (Cap 32); (ii) the licensed leveraged foreign exchange trader has properly kept the records required to be kept by it under the Leveraged Foreign Exchange Trading (Books, Contract Notes and Conduct of Business) Rules (Cap 451 sub. leg.); (iii) the profit and loss account and the balance sheet are in compliance with the requirements of these Rules; (iv) the licensed leveraged foreign exchange trader has properly kept all segregated trust accounts in accordance with section 23 of the Ordinance; (v) the computation of liquid capital for the purposes of the Leveraged Foreign Exchange Trading (Financial Resources) Rules (Cap 451 sub. leg.) is correctly compiled from the books and records of the licensed leveraged foreign exchange trader and if such is not correctly compiled, the nature and extent of the incorrectness; and (d) there appears to the auditor to have been any contravention of the Leveraged Foreign Exchange Trading (Financial Resources) Rules (Cap 451 sub. leg.) by the licensed leveraged foreign exchange trader during the financial period covered by the auditor's report. (Enacted 1994) LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - SCHEDULE (Repealed 5 of 2002 s. 406) VerDate:01/04/2003 LEVERAGED FOREIGN EXCHANGE TRADING (ACCOUNTS AND AUDIT) RULES - SCHEDULE SCHEDULE VerDate:30/06/1997 [section 2] PART 1 .......................................................... (Name of licensed leveraged foreign exchange trader) Profit and Loss Account for the year / period ended .................... Current Year / Period Last Year / Period REVENUE Commission and brokerage from leveraged foreign exchange trading Fee income- (a) leveraged foreign exchange trading (b) others Profit / (Loss) on trading in foreign currencies Dividends and interest on investments Interest from- (a) clients (b) authorized institutions (c) others Other revenue (supply details) ___________ __________ ...................... .................... EXPENSES Directors' emoluments- (a) fees (b) other emoluments Salaries and allowances Interest to- (a) clients (b) authorized institutions (c) others Commission Rent and rates Audit fee Professional fees Bad and doubtful debts Depreciation or amortization Other expenses (supply details) ___________ __________ ...................... ___________ .................... __________ NET PROFIT / (LOSS) FOR THE YEAR / PERIOD BEFORE TAXATION TAXATION ___________ __________ NET PROFIT / (LOSS) FOR THE YEAR / PERIOD AFTER TAXATION BALANCE BROUGHT FORWARD ___________ __________ PROFIT AVAILABLE FOR DISTRIBUTION PROPOSED DIVIDENDS ___________ __________ BALANCED CARRIED FORWARD =========== ========== (Enacted 1994) PART 2 ........................................................................... ............. (Name of licensed leveraged foreign exchange trader) Balance Sheet As At ............................. Current Year / Period Last Year / Period Cost Depre- ciation Bal-ance FIXED ASSETS Immovable property- (a) in Hong Kong (b) outside Hong Kong Other fixed assets ___ _____ ___ === ===== === Long term unlisted investments Other assets (supply details) CURRENT ASSETS Listed investments State the basis of valuation (if at cost, state also the market value)- (a) in Hong Kong (b) outside Hong Kong Other debt securities Note 2 Amounts receivable arising in the ordinary course of business of leveraged foreign exchange trading- (a) clients (b) recognized counterparties that are authorized institutions (c) recognized counterparties that are not authorized institutions LESS: Provision for bad and doubtful debts Note 2 Other amounts receivable- (a) secured (b) unsecured LESS: Provision for bad and doubtful debts Payments in advance Utility, rent and other deposits Cash in hand Cash at authorized institutions- (a) segregated trust accounts (b) other accounts Other current assets (supply details) ______________ __________ ............................ .................... DEDUCT: CURRENT LIABILITIES Notes 2 & 3 Amounts payable arising in the ordinary course of business of leveraged foreign exchange trading- (a) clients (b) recognized counterparties that are authorized institutions (c) recognized counterparties that are not authorized institutions Note 2 Other amounts payable- (a) secured (b) unsecured Note 2 Bank loans and overdrafts- (a) secured (b) unsecured Accrued expenses Proposed dividends Taxation Note 2 Other liabilities (supply details) ______________ __________ ............................ ______________ .................... __________ NET CURRENT ASSETS / (LIABILITIES) ______________ __________ LONG TERM LIABILITIES (supply details) ============== ========== Representing SHARE CAPITAL - Authorized Issued and fully paid-up ============== ========== CAPITAL RESERVES OTHER RESERVES PROFIT AND LOSS ACCOUNT ______________ __________ ============== ========== NOTES TO THE ACCOUNTS 1. Distinguish balances due to or from- (a) a director (b) a related corporation 2. Where any amount is secured, specify by way of note the following particulars- (a) name(s) of any interested parties (b) amount due (c) whether it is interest bearing, and if so, the rate of interest (d) date and terms of repayment (e) nature, market value and the identity of the owner of the security 3. Where there are any outstanding contracts relating to leveraged foreign exchange trading with clients, specify the following particulars for each of those client account- (a) name, account number, or account code of client (b) 3% of the aggregate gross principal value of all outstanding contracts relating to leveraged foreign exchange trading in all foreign currencies other than currency linked to Hong Kong currency (c) cash margin (in Hong Kong currency or currency linked to Hong Kong currency) received from the client plus accrued interest payable and floating profits due to the client less accrued interest, fees and commissions receivable and floating losses due from the client (d) other margin received from the client as calculated in accordance with section 6(2)(b) to (g) of the Leveraged Foreign Exchange Trading (Financial Resources) Rules (Cap 451 sub. leg.) 4. Computation of issued and paid up share capital Current Year / Period Last Year / Period Issued and paid up non-redeemable share capital Approved redeemable share capital Deficits in profit and loss account and other reserves ___________ __________ Share capital less deficits in reserves Required issued and paid up share capital ___________ __________ Excess / (Deficiency) =========== ========== 5. Assets, liabilities and commitments in foreign currencies- (a) total assets, other than fixed assets, in foreign currency included in the Balance Sheet (b) total liabilities in foreign currency included in the Balance Sheet (c) total commitments to purchase foreign currency under foreign exchange agreements (d) total commitments to sell foreign currency under foreign exchange agreements (e) total commitments to purchase foreign currency under options contracts (f) total commitments to sell foreign currency under options contracts (g) total commitments to purchase foreign currency under futures contracts (h) total commitments to sell foreign currency under futures contracts (i) other commitments 6. Contingent liabilities and capital commitments- Current Year / Period Last Year / Period (a) contingent liabilities- (i) secured (supply details) exchange trading (ii) unsecured (supply details) (b) capital commitments (supply details) ___________ __________ =========== ========== Current Year / Period Last Year / Period 7. Value of any guarantee provided by the licensed leveraged foreign exchange trader =========== ========== (Enacted 1994)