Hong Kong Regulations

SECURITIES AND FUTURES (CONTRACT NOTES, STATEMENTS OF ACCOUNT AND RECEIPTS) RULES - SECT 11

Preparation and provision of monthly statements of account

(Past version on 27/02/2004).
(Past version on 01/04/2003).

(1) In this section- (L.N. 119 of 2006)

"monthly accounting period" (按月會計期) means- (L.N. 119 of 2006)

   (a)  in relation to the first statement of account required to be prepared
        and provided to a client of an intermediary in accordance with
        subsection (2) or (4) (as the case may be), a period not exceeding one
        month ending on a date selected by the intermediary; and

   (b)  in relation to any subsequent statement of account, a period the
        duration of which shall be not less than 4 weeks and not exceed one
        month, commencing on the day after the date on which the previous
        monthly  accounting period ended, and ending on a date selected by the
        intermediary; (L.N. 119 of 2006)

"repledge" (再質押), in relation to an intermediary or an associated entity
of an intermediary, means an act by which the intermediary or the associated
entity deposits securities collateral of the intermediary as collateral for
financial accommodation provided to the intermediary. (L.N. 119 of 2006)

(2) Subject to subsection (4), where any of the circumstances specified in
subsection (6) apply in respect of a client of an intermediary in respect of a
monthly accounting period, the intermediary shall-

   (a)  prepare a statement of account in respect of the client in accordance
        with subsections (3) and (3A); and (L.N. 119 of 2006)

   (b)  provide the statement of account to the client no later than the end
        of the seventh business day after the end of the monthly 
        accounting period.

(3) A statement of account referred to in subsection (2) shall include the
information required to be included under section 7 and, to the extent
applicable, the following information relating to the account of the client-

   (a)  the address of the principal place of business in Hong Kong of the
        intermediary;

   (b)  the outstanding balance of and the net equity in that account as at
        the beginning and as at the end of that monthly accounting period and
        details of all movements in the balance of that account during that
        period;

   (c)  details of all relevant contracts entered into by the intermediary
        with or on behalf of the client during that monthly 
        accounting period, indicating those initiated by the intermediary;

   (d)  details of all events specified in section 8(3) which have taken place
        during that monthly accounting period, including what happened to the
        proceeds of any disposals initiated by the intermediary during that
        period of any client securities and collateral of the client held for
        that account;

   (e)  details of all movements during that monthly accounting period of any-

        (i)    client securities and collateral of the client; and

        (ii)   security provided by or on behalf of the client in relation to
               a margined transaction,
held for that account;

   (f)  the quantity, and, in so far as readily ascertainable, the market
        price and market value of each description of-

        (i)    client securities and collateral of the client; and

        (ii)   security provided by or on behalf of the client in relation to
               a margined transaction,
held for that account as at the end of that monthly accounting  period;

   (g)  the margin ratio and margin value of each description of securities
        collateral held for that account as at the end of that monthly 
        accounting period;

   (h)  details of all income credited to and charges levied against that
        account during that monthly accounting period;

   (i)  all floating profits and floating losses in respect of open positions
        held for that account as calculated as at the end of that
        monthly accounting period and the prices used for such purposes;

   (j)  a list of all open positions held for that account as at the end of
        that monthly accounting period;

   (k)  the minimum margin requirement for all open positions held for that
        account as at the end of that monthly accounting period;

   (l)  the amount of margin excess or margin shortfall in that account as at
        the end of that monthly accounting period;

   (m)  the amount of option premium receivable or payable in respect of that
        account as at the end of that monthly accounting period; and

   (n)  where the account is for dealing in securities, an indication that it
        is a margin account.

(3A) In the case of an intermediary which is licensed for dealing in
securities or securities margin financing, where-

   (a)  the intermediary or an associated entity of such intermediary has held
        securities collateral for that account at any time during that
        monthly accounting period; and

   (b)  at any time during that monthly accounting period, the intermediary or
        an associated entity of such intermediary has repledged securities
        collateral of the intermediary (whether or not the securities
        collateral repledged is the same as that referred to in paragraph
        (a)), a statement of account referred to in subsection (2) shall also
        include a statement in a prominent position stating-

   (c)  whether the client has provided the intermediary or an associated
        entity of such intermediary with a standing authority as defined in
        section 2 of the Securities and Futures (Client Securities)  Rules (
        Cap 571 sub. leg. H), which has not been revoked, authorizing the
        intermediary or associated entity to repledge securities collateral
        provided by him or on his behalf; and

   (d)  that the intermediary or an associated entity of such intermediary
        referred to in paragraph (b) has repledged securities collateral of
        the intermediary during that monthly accounting period. (L.N. 119 of
        2006)

(4) Where an intermediary is licensed or registered for asset  management and,
in relation to the conduct by the intermediary of asset  management (other
than the management of a collective investment scheme), any of the
circumstances specified in subsection (6) apply in respect of a client of the
intermediary in respect of a monthly accounting period, the intermediary
shall-

   (a)  prepare a statement of account in respect of the client in accordance
        with subsection (5); and

   (b)  provide the statement of account to the client no later than the end
        of the tenth business day after the end of the monthly accounting 
        period.

(5) A statement of account referred to in subsection (4) shall include the
information required to be included under section 7 and, to the extent
applicable, the following information relating to the account of the client-

   (a)  the address of the principal place of business in Hong Kong of the
        intermediary;

   (b)  a valuation of the client's portfolio as at the end of the
        monthly accounting period providing-

        (i)    details of the quantity, market price, purchase cost and market
               value of each description of securities held for that account
               as at the end of that period;

        (ii)   details of all open positions as at the end of that period;

        (iii)  the money balance held for that account as at the end of that
               period; and

        (iv)   the amount of accounts payable and receivable in respect of
               that account as at the end of that period;

   (c)  details of all income credited to and charges levied against that
        account during the monthly accounting period; and

   (d)  a list of all contracts entered into in Hong Kong by the intermediary
        with or on behalf of the client during the monthly accounting  period
        for dealing in securities and futures contracts and that are leveraged
        foreign exchange contracts.

(6) The circumstances specified for the purposes of subsections (2) and (5)
are- (L.N. 29 of 2004)

   (a)  during a monthly accounting period, the intermediary is required to
        prepare and provide to the client-

        (i)    a contract note in accordance with section 5;

        (ii)   a statement of account in accordance with section 8 or 9; or

        (iii)  a receipt in accordance with section 13;

   (b)  during a monthly accounting period, an associated entity of the
        intermediary is required to prepare and provide to the client a
        receipt in accordance with section 13;

   (c)  at any time during a monthly accounting period, the client has an
        account balance that is not nil;

   (d)  the client has an open position as at the end of a monthly 
        accounting period; or

   (e)  at any time during a monthly accounting period-

        (i)    any client securities and collateral; or

        (ii)   any security provided in relation to a margined transaction,
               are held for the account of the client.

"monthly accounting period" (按月會計期)

"repledge" (再質押)