Hong Kong Regulations

SECURITIES AND FUTURES (FINANCIAL RESOURCES) RULES - SECT 60

Transitional

(Past version on 01/04/2003).

(1) (Omitted as expired)

(2) (Omitted as spent)

(3) Notwithstanding section 1 and subject to subsection (5), section 5 does
not apply in respect of-

   (a)  a partnership deemed under section 27 of Part 1 of Schedule 10 to the
        Ordinance to be a licensed corporation; or

   (b)  an individual deemed under section 30 of Part 1 of Schedule 10 to the
        Ordinance to be a licensed corporation, provided that-

   (c)  in the case of a partnership, the aggregate of amounts maintained in
        all partners' capital accounts; or

   (d)  in the case of an individual, the amount maintained in his
        capital account, is not less than the amount of paid-up share capital
        required of a licensed corporation under section 5, until such time as
        the specified decision referred to, in the case of a partnership, in
        section 53(1)(b) of Part 1 of Schedule 10 to the Ordinance or, in the
        case of an individual, in section 53(1)(c) of Part 1 of Schedule 10 to
        the Ordinance, takes effect.

(4) For the purposes of these Rules, a transaction executed by-

   (a)  a partnership deemed under section 27 of Part 1 of Schedule 10 to the
        Ordinance to be a licensed corporation, for the account of a partner
        of the partnership; and

   (b)  an individual deemed under section 30 of Part 1 of Schedule 10 to the
        Ordinance to be a licensed corporation, for his own account, shall be
        treated as a transaction executed by it or him (as the case may be)
        for a client.

(5) Notwithstanding section 1 and subject to subsection (6), these Rules do
not apply in respect of-

   (a)  a partnership deemed under section 27 of Part 1 of Schedule 10 to the
        Ordinance to be a licensed corporation;

   (b)  an individual deemed under section 30 of Part 1 of Schedule 10 to the
        Ordinance to be a licensed corporation; or

   (c)  a licensed corporation, which is licensed solely for one or more of
        the following-

   (d)  Type 4 regulated activity;

   (e)  Type 5 regulated activity;

   (f)  Type 6 regulated activity;

   (g)  Type 9 regulated activity, provided that it or he (as the case may be)
        maintains net tangible assets in an amount of not less than $500000.

(6) Subsection (5) shall expire at the expiration of 6 months from the
commencement of these Rules.

(6A) Where a licensed corporation is licensed immediately prior to 1 October
2006 for Type 1 or Type 8 regulated activity, for the period from 1 October
2006 to 30 September 2007, the reference in section 42(2) to 80% shall be
construed as a reference to 65%. (L.N. 117 of 2006)

(7) In this section-

"capital account" (資本帳) means an account in which the amount of capital
injected into the business of a partnership or sole-proprietorship is kept;

"net tangible assets" (有形資產淨值), in relation to a person referred
to in subsection (5)(a), (b) or (c), means the person's total assets less-

   (a)  the person's intangible assets, including goodwill, copyrights,
        patents and licences; and

   (b)  the person's total liabilities (after excluding any approved 
        subordinated loan provided to the person).

"capital account" (資本帳)

"net tangible assets" (有形資產淨值)