Hong Kong Regulations

SECURITIES AND FUTURES (FINANCIAL RESOURCES) RULES - SECT 38

Amounts payable in respect of dealing in securities

A licensed corporation shall include in its ranking liabilities, in respect of
a sale of securities-

   (a)  by it for a client who is in default of his obligation to deliver the
        securities for-

        (i)    more than 2 weeks after the settlement date; or

        (ii)   (A) more than 5 business days but not more than 2 weeks after
               the settlement date; and (B) the market value of the securities
               is more than 200% of the consideration for which they were
               sold; and

   (b)  which it has not settled with securities purchased at its own expense,
        the amount by which the market value of the securities exceeds the
        consideration for which they were sold.