Hong Kong Regulations

SECURITIES AND FUTURES (INVESTOR COMPENSATION-LEVY) RULES - SECT 24

Commission to cause financial statement to be audited

PART 5

NO PAYMENT OF LEVY UNDER EXEMPTION NOTICE

(1) Subject to subsection (3), where the latest unaudited financial statement
prepared in respect of the accounts of the compensation fund and made up to
(and including) the last day of any month shows that the net  asset value of
the compensation fund exceeds $1400000000 as at that day, the Commission shall
as soon as reasonably practicable appoint an auditor to audit, and prepare an
auditor’s report in respect of, the financial statement and to submit the
report to the Commission.

(2) Subject to subsection (4), where the latest unaudited financial statement
prepared in respect of the accounts of the compensation fund and made up to
(and including) the last day of any month shows that the net  asset value of
the compensation fund is below $1000000000 as at that day, the Commission
shall as soon as reasonably practicable appoint an auditor to audit, and
prepare an auditor’s report in respect of, the financial statement and to
submit the report to the Commission.

(3) Subsection (1) does not apply if at the date of receiving the latest
unaudited financial statement—

   (a)  the Commission has published an exemption notice under section  25 (1)
        but has not published a termination of exemption notice relating to it
        under section 26(1);

   (b)  the Commission has received an auditor’s report prepared in respect
        of a previous unaudited financial statement and, as a result, the
        Commission is required to publish an exemption notice under
        section 25(1);

   (c)  the Commission has appointed an auditor, and is awaiting receipt of an
        auditor’s report to be prepared under subsection (1) in respect of a
        previous unaudited financial statement; or

   (d)  an unaudited financial statement made up to (and including) the last
        day of the month referred to in subsection (1) is required to be
        audited, and an auditor’s report in respect of the financial
        statement is required to be prepared, under section 240 of the
        Ordinance.

(4) Subsection (2) does not apply if at the date of receiving the latest
unaudited financial statement—

   (a)  the Commission has not published an exemption notice under
        section 25(1);

   (b)  the Commission has published an exemption notice under section  25 (1)
        and has published a termination of exemption notice relating to it
        under section 26(1);

   (c)  the Commission has received an auditor’s report prepared in respect
        of a previous unaudited financial statement and, as a result, the
        Commission is required to publish a termination of exemption notice
        under section 26(1);

   (d)  the Commission has appointed an auditor, and is awaiting receipt of an
        auditor’s report to be prepared under subsection (2) in respect of a
        previous unaudited financial statement; or

   (e)  an unaudited financial statement made up to (and including) the last
        day of the month referred to in subsection (2) is required to be
        audited, and an auditor’s report in respect of the financial
        statement is required to be prepared, under section 240 of the
        Ordinance. (Part 5 added L.N. 108 of 2005)