Hong Kong Regulations

SECURITIES AND FUTURES (DISCLOSURE OF INTERESTS-SECURITIES BORROWING AND LENDING) RULES - SECT 3

Exclusion for a person lending through an approved lending agent

(1) Subject to subsection (3), a person who would otherwise come under a
duty of disclosure under section 310 of the Ordinance in the circumstances
specified in section 313(1)(d) of the Ordinance is not under such a duty if
the change in the nature of his interest in shares occurs in the circumstances
specified in subsection (2).

(2) Subsection (1) applies where-

   (a)  the shares are transferred or delivered by the person to an
        approved lending agent on condition that the shares-

        (i)    are held by the approved lending agent, as agent for the
               person, for lending only and for no other purpose; and

        (ii)   may only be lent under a relevant agreement;

   (b)  qualified shares are lent by an approved lending agent to a borrower
        under a relevant agreement;

   (c)  qualified shares lent by an approved lending agent are returned to the
        person by the approved lending agent; or

   (d)  qualified shares lent by an approved lending agent are returned to the
        approved lending agent by a borrower under a relevant agreement.

(3) If the shares referred to in subsection (1) are used by the
approved lending agent in circumstances other than those specified in
subsection (2), there shall be taken, for the purposes of Divisions 2 to 5 of
Part XV of the Ordinance, to have been a change in the nature of the person's
interest in the shares that were so used at the relevant time.