Hong Kong Regulations

LEVERAGED FOREIGN EXCHANGE TRADING (FINANCIAL RESOURCES) RULES - SECT 5

Liquid assets

Caution: This is a past version. See the current version here.

The following assets are liquid assets of a licensed leveraged foreign
exchange trader for the purposes of this Part if they are beneficially owned
by it or if they are money which is held on behalf of clients and shall be
calculated in accordance with this section and section 7-

   (a)  cash in hand;

   (b)  money which is on account with a local branch or the principal place
        of business in Hong Kong of an authorized institution and which, in
        the case of a time deposit, will become payable within 6 months,
        together with interest accrued;

   (c)  money which is on account with an authorized institution incorporated
        in Hong Kong or incorporated or established by or under the law or
        other authority of an OECD country (other than the money specified in
        paragraph (b)) and is freely remittable to Hong Kong and which, in the
        case of a time deposit, will become payable within 6 months, together
        with interest accrued;

   (d)  subject to section 7(5) and (7)-

        (i)    80% by market value of any shares that are listed on the
               Unified Exchange or on any stock market specified in Part I of
               Schedule 1; and

        (ii)   70% by market value of any shares that are listed on any stock
               market specified in Part II of Schedule 1;

   (e)  60% by market value of any warrants that are listed on the Unified
        Exchange or on any stock market specified in Part I of Schedule 1;

   (f)  subject to section 7(6) and (7)-

        (i)    90% by market value of any recognized debt securities issued or
               guaranteed by the Government of Hong Kong, or by any government
               of or central bank of an OECD country or Singapore;

        (ii)   80% by market value of any recognized debt securities other
               than those specified in subparagraph (i);

   (g)  interest, fees, commissions and commission rebates which have accrued
        for a period of not more than 1 month in each case, or which are
        receivable and remain outstanding for not more than 2 weeks after they
        are first due for payment, in the ordinary course of business of
        leveraged foreign exchange trading;

   (h)  the amount receivable from and cash deposited with a recognized
        counterparty or a recognized futures exchange or its clearing house or
        a clearing member of such futures exchange or such clearing house in
        respect of leveraged foreign exchange trading and any interest accrued
        on such cash deposits; and

   (i)  floating profits in respect of foreign currency positions. (Enacted
        1994)