compustar · November 27, 2024 22:10
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 To amend and consolidate the law relating to the constitution, jurisdiction, practice and powers of the High Court and the administration of justice therein and for matters ancillary thereto and connected therewith.
 (Amended 25 of 1998 s. 2)
 [20 February 1976] L.N. 50 of 1976
 (Format changes—E.R. 1 of 2017)
 Editorial Note:
 The title of this Ordinance was amended from “Supreme Court Ordinance” to “High Court Ordinance” — see 25 of 1998 s. 2.
 Part I
 Preliminary
 1.Short title
 This Ordinance may be cited as the High Court Ordinance.
 (Amended 25 of 1998 s. 2)
 2.Interpretation
 In this Ordinance, unless the context otherwise requires—
 action (訴訟) means a civil proceeding commenced by writ of summons or in such other manner as may be prescribed by any law;
 appeal (上訴) in the context of appeals to the Court of Appeal in its civil jurisdiction includes—
 (a)an application for a new trial; and
 (b)an application to set aside a verdict, finding or judgment in any cause or matter in the Court of First Instance which has been tried, or in which any issue has been tried, by a jury; (Added 52 of 1987 s. 2. Amended 25 of 1998 s. 2)
 cause (訟案) means any action or any criminal proceeding; (Replaced 52 of 1987 s. 2)
 Court of First Instance (原訟法庭) means the Court of First Instance of the High Court; (Added 25 of 1998 s. 2)
 defendant (被告人) includes any person served with any writ of summons or process, or served with notice of, or entitled to attend, any proceedings;
 deputy judge (暫委法官) means a deputy judge of the Court of First Instance appointed under section 10(1); (Added 49 of 1983 s. 2. Amended 25 of 1998 s. 2)
 detention (羈留) includes every form of restraint of liberty of the person; (Added 95 of 1997 s. 2)
 Government stock (政府證券) means any stock issued by the Government or any funds of or annuity granted by the Government; (Added 52 of 1987 s. 2)
 judgment (判決) includes decree;
 Justice of Appeal (上訴法庭法官) includes a judge of the Court of First Instance acting as an additional judge of the Court of Appeal under section 5(2); (Added 52 of 1987 s. 2. Amended 25 of 1998 s. 2; 21 of 2020 s. 3)
 land (土地) includes—
 (a)land covered by water;
 (b)any estate, right, interest or easement in or over any land; and
 (c)things attached to land or permanently fastened to anything attached to land; (Replaced 52 of 1987 s. 2)
 Master (聆案官) has the meaning given to it by sections 37, 37AC, 37A and 37B; (Added 52 of 1987 s. 2. Amended 1 of 1997 s. 3; 10 of 2005 s. 164)
 matter (事宜) includes every proceeding not in a cause;
 party (一方、方) includes every person served with notice of or attending any proceeding, although not named on the record;
 plaintiff (原告人) includes every person asking any relief (otherwise than by way of counter-claim as a defendant) against any other person by any form of proceeding, whether the proceeding is by action, suit, petition, motion, summons or otherwise;
 prescribed (訂明) means prescribed by rules of court;
 recorder (特委法官) means a recorder of the Court of First Instance appointed under section 6A; (Added 80 of 1994 s. 2. Amended 25 of 1998 s. 2)
 Registrar (司法常務官) means the Registrar of the High Court; (Amended 25 of 1998 s. 2)
 Registry (登記處) means any Registry of the High Court; (Amended 25 of 1998 s. 2)
 writ of habeas corpus (人身保護令狀) means a writ of habeas corpus ad subjiciendum. (Added 95 of 1997 s. 2)
 (Amended 49 of 1983 s. 2; 95 of 1997 s. 2; 25 of 1998 s. 2; Amended E.R. 1 of 2017)
 Part II
 The High Court
 (Amended 25 of 1998 s. 2)
 3.High Court
 (1)There shall be a High Court of the Hong Kong Special Administrative Region consisting of the Court of First Instance and the Court of Appeal.
 (2)Subject to the provisions of this Ordinance, the High Court shall be a court of unlimited civil and criminal jurisdiction.
 (Replaced 110 of 1997 s. 8)
 4.Constitution of Court of First Instance
 (1)The Court of First Instance shall consist of—
 (a)the Chief Judge of the High Court; (Amended 79 of 1995 s. 50)
 (b)such judges as the Governor may appoint; (Amended 80 of 1994 s. 3)
 (ba)such recorders as the Governor may appoint; and (Added 80 of 1994 s. 3)
 (c)such deputy judges as the Chief Justice may appoint. (Added 52 of 1987 s. 4)
 (2)A Justice of Appeal may act as a judge of the Court of First Instance whenever the business of the Court of First Instance so requires, in which case he shall have all the jurisdiction, powers and privileges of such a judge. (Amended 21 of 2020 s. 4)
 (3)(Repealed 52 of 1987 s. 4)
 (Amended 25 of 1998 s. 2)
 5.Constitution of Court of Appeal
 (1)The Court of Appeal shall consist of—
 (a)the Chief Judge of the High Court; and
 (b)such Justices of Appeal as the Governor may appoint.
 (1A)The Chief Judge of the High Court may appoint one or more of the Justices of Appeal as vice-presidents of the Court of Appeal. (Added 52 of 1987 s. 5)
 (2)A judge of the Court of First Instance may, on the request of the Chief Justice, act as an additional judge of the Court of Appeal, in which case he shall have all the jurisdiction, powers and privileges of a judge of the Court of Appeal. (Amended 21 of 2020 s. 5)
 (3)The Chief Judge of the High Court shall be the president of the Court of Appeal and, in his absence for any cause, the presidency shall be determined in accordance with the order of precedence prescribed in section 7.
 (Amended 79 of 1995 s. 50; 25 of 1998 s. 2)
 6.Appointment of judges
 (1)A judge of the High Court, other than—  (Amended 25 of 1998 s. 2)
 (a)a judge appointed under section 8(1) or (2); (Amended 80 of 1994 s. 4)
 (aa)a recorder; (Added 80 of 1994 s. 4. Amended 26 of 1997 s. 2)
 (b)a deputy judge; and (Amended 49 of 1983 s. 3; 26 of 1997 s. 2)
 (c)a judge appointed under section 11A(3)(a), (Added 26 of 1997 s. 2)
 shall be appointed by Letters Patent under the Public Seal by the Governor, in accordance with such instructions as the Governor may receive through a Secretary of State.
 (2)(Repealed 80 of 1994 s. 4)
 6A.Appointment of recorders
 (1)The Governor may appoint a person who is eligible to be appointed to be a judge of the High Court under section 9(1) or (1A), to be a recorder of the Court of First Instance for such period as may be specified in the instrument by which the appointment is made. (Amended 1 of 1997 s. 4)
 (2)An appointment made under subsection (1) shall be made—
 (a)in the case of the first appointment of a person as a recorder, by Letters Patent under the Public Seal;
 (b)in the case of a reappointment or subsequent appointment of a person who has previously been appointed, by such other instrument under the hand of the Governor as the Governor thinks fit.
 (3)A recorder shall have and may exercise all the jurisdiction, powers and privileges and shall have and perform all the duties of a judge of the Court of First Instance, and any reference in any law to such a judge shall be construed accordingly.
 (Added 80 of 1994 s. 5. Amended 25 of 1998 s. 2)
 6B.Appointment of judges and recorders may be retrospective
 (1)Subject to subsection (2), any appointment made under section 6(1) or 6A(1) may be given effect from a date anterior to that of the Letters Patent by which it is made.
 (2)Nothing in subsection (1) shall be deemed to authorize the discharge of any judicial functions by any person so appointed before the date of the Letters Patent or before the requirements of section 17 of the Oaths and Declarations Ordinance (Cap. 11) have been fulfilled.
 (Added 80 of 1994 s. 5)
 7.Precedence
 (1)The judges of the High Court shall take precedence in the following order—
 (a)the Chief Judge of the High Court; (Amended 79 of 1995 s. 50)
 (aa)the vice-presidents of the Court of Appeal who among themselves shall rank according to the priority of their respective appointments as vice-presidents; (Added 52 of 1987 s. 6)
 (b)the Justices of Appeal (other than vice-presidents), who among themselves shall rank according to the priority of their respective appointments; (Amended 52 of 1987 s. 6)
 (c)the judges of the Court of First Instance, who among themselves shall rank according to the priority of their respective appointments;
 (ca)
 the recorders of the Court of First Instance, who among themselves shall rank according to the priority of their respective appointments:
 Provided that, where the Governor is of the opinion that there are sufficient reasons for so doing, he may determine the precedence of recorders irrespective of the priority of their appointments; (Added 80 of 1994 s. 6)
 (d)
 deputy judges, who among themselves shall rank according to the priority of their respective appointments:
 Provided that, where the Governor is of the opinion that there are sufficient reasons for so doing, he may determine the precedence of deputy judges irrespective of the priority of their appointments. (Amended 49 of 1983 s. 4)
 (2)Notwithstanding subsection (1)(b) and (c), where the Secretary of State is of the opinion that there are sufficient reasons for so doing, he may determine the precedence of the Justices of Appeal or the judges of the Court of First Instance, as the case may be, irrespective of the priority of their appointments.
 (Amended 25 of 1998 s. 2)
 8.Acting appointments
 (1)If the office of Chief Judge of the High Court or any Justice of Appeal becomes vacant, by death or otherwise, the Governor may appoint another person, who is eligible to be appointed to be a judge of the High Court under section 9, to act in such office until the vacancy therein is filled.
 (2)If the Chief Judge of the High Court or a Justice of Appeal is temporarily ill or absent, the Governor may appoint another person, who is eligible to be appointed to be a judge of the High Court under section 9, to act in his office until he resumes the duties thereof.
 (3)Any appointment made under subsection (1) or (2) may be given effect from a date anterior to that of the instrument by which it is made. (Added 80 of 1994 s. 7)
 (Amended 52 of 1987 s. 7; 79 of 1995 s. 50; 25 of 1998 s. 2)
 9.Professional qualifications of judges
 (1)A person shall be eligible to be appointed to be a judge of the High Court if—  (Amended 25 of 1998 s. 2)
 (a)he is qualified to practise as a barrister or advocate in a court in Hong Kong or any other common law jurisdiction having unlimited jurisdiction either in civil or criminal matters; or (Amended 14 of 1997 s. 2)
 (b)he is qualified as mentioned in paragraph (a) and prior thereto was qualified to practise as a solicitor in such a court,
 and, in either case, he has for at least 10 years practised as a barrister, solicitor or advocate in such a court.
 (1A)A person shall also be eligible to be appointed to be a judge of the High Court if he is qualified to practise as a solicitor of the High Court and has for at least 10 years practised as such. (Added 52 of 1995 s. 2. Amended 25 of 1998 s. 2)
 (2)A person shall also be eligible to be appointed to be a judge of the High Court if—  (Amended 25 of 1998 s. 2)
 (a)he is qualified to practise as a barrister or advocate in a court in Hong Kong or any other common law jurisdiction having unlimited jurisdiction either in civil or criminal matters; or (Amended 14 of 1997 s. 2)
 (b)he is qualified as mentioned in paragraph (a) and prior thereto was qualified to practise as a solicitor in such a court,
 and, in either case, he has, subject to subsection (3), for at least 10 years—
 (i)-(iii)(Repealed 14 of 1997 s. 2)
 (iv)been a District Judge appointed in accordance with section 4 or 7 of the District Court Ordinance (Cap. 336);
 (iva)been the Registrar of the Hong Kong Court of Final Appeal appointed in accordance with section 42 of the Hong Kong Court of Final Appeal Ordinance (Cap. 484); (Added 10 of 2005 s. 132)
 (ivb)been the Registrar or a senior deputy registrar, deputy registrar or assistant registrar appointed in accordance with section 37; (Added 10 of 2005 s. 132)
 (ivc)been the Registrar of the District Court or a deputy registrar or assistant registrar of the District Court, appointed in accordance with section 14 of the District Court Ordinance (Cap. 336); (Added 10 of 2005 s. 132)
 (v)been a permanent magistrate appointed in accordance with section 5 of the Magistrates Ordinance (Cap. 227);
 (va)been a coroner appointed in accordance with section 3 of the Coroners Ordinance (Cap. 504); (Added 10 of 2005 s. 132)
 (vb)been an adjudicator appointed in accordance with section 4 of the Small Claims Tribunal Ordinance (Cap. 338); (Added 10 of 2005 s. 132)
 (vc)been a presiding officer appointed in accordance with section 4 of the Labour Tribunal Ordinance (Cap. 25); (Added 10 of 2005 s. 132)
 (vi)been a legal officer as defined in section 2 of the Legal Officers Ordinance (Cap. 87);
 (vii)(Repealed 8 of 1993 s. 6)
 (viii)been the Director of Legal Aid or a Deputy Director of Legal Aid, Assistant Director of Legal Aid or Legal Aid Officer, appointed in accordance with section 3 of the Legal Aid Ordinance (Cap. 91); (Added 50 of 1976 s. 2. Amended 24 of 1983 s. 7; 39 of 1992 s. 8; 60 of 1992 s. 3)
 (ix)been the Official Receiver or an Assistant Official Receiver (Legal), Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 75 of the Bankruptcy Ordinance (Cap. 6); or (Added 39 of 1992 s. 8. Amended 60 of 1992 s. 3; 68 of 1995 s. 17)
 (x)been the Director of Intellectual Property or a Deputy Director of Intellectual Property, Assistant Director of Intellectual Property, Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 3 of the Director of Intellectual Property (Establishment) Ordinance (Cap. 412). (Added 60 of 1992 s. 3. Amended 26 of 2012 s. 34)
 (2A)A person shall also be eligible to be appointed to be a judge of the High Court if—  (Amended 25 of 1998 s. 2)
 (a)he is a solicitor of a court in Hong Kong or any other common law jurisdiction having unlimited jurisdiction either in civil or criminal matters; (Amended 14 of 1997 s. 2)
 (b)he is and has been for the previous 2 years at least, and in aggregate for at least 5 years, employed in the service of the Crown in Hong Kong on judicial or legal work; and
 (c)he has, subject to subsection (4), for at least 10 years either—
 (i)practised as a barrister, solicitor or advocate in such a court; or
 (ii)been employed in such service as is described in paragraph (b). (Added 44 of 1982 s. 2)
 (3)For the purposes of calculating the period of 10 years referred to in subsection (2), periods of less than 10 years falling within any of paragraphs (iv) to (x) of that subsection may be combined, and there may be included in such period, any period of practice as a barrister, solicitor or advocate in any of the courts referred to in subsection (2)(a). (Amended 50 of 1976 s. 2; 39 of 1992 s. 8; 60 of 1992 s. 3; 14 of 1997 s. 2)
 (4)For the purposes of calculating the period of 10 years referred to in subsection (2A)(c) there may be included any period of less than 10 years falling within any of paragraphs (iv) to (x) of subsection (2), and periods of less than 10 years falling within subparagraphs (i) and (ii) of subsection (2A)(c) may be combined. (Added 44 of 1982 s. 2. Amended 39 of 1992 s. 8; 60 of 1992 s. 3; 14 of 1997 s. 2)
 (5)For the purposes of calculating the period of 10 years under subsection (2), periods served in an office specified in Part I of the First Schedule to the repealed Registrar General (Establishment) Ordinance (Cap. 100) may be taken into account notwithstanding the repeal of that Ordinance. (Added 8 of 1993 s. 6)
 (Amended 10 of 2005 s. 132)
 10.Appointment of deputy judges
 (1)The Chief Justice may appoint a person, who is eligible to be appointed to be a judge of the High Court under section 9, to be a deputy judge of the Court of First Instance if—  (Amended 44 of 1982 s. 3; 25 of 1998 s. 2)
 (a)the office of any judge of the Court of First Instance becomes vacant for any reason; or (Amended 25 of 1998 s. 2)
 (b)he considers that the interests of the administration of justice require that a deputy judge should be appointed temporarily.
 (1A)Subject to subsection (1B), any appointment made under subsection (1) may be given effect from a date anterior to that of the instrument by which it is made. (Added 80 of 1994 s. 8)
 (1B)Nothing in subsection (1A) shall be deemed to authorize the discharge of any judicial functions by any person so appointed before the date of the instrument or before the requirements of section 17 of the Oaths and Declarations Ordinance (Cap. 11) have been fulfilled. (Added 80 of 1994 s. 8)
 (2)Subject to the terms of his appointment, a deputy judge shall have and may exercise all the jurisdiction, powers and privileges and shall have and perform all the duties of a judge of the Court of First Instance, and any reference in any law to such a judge shall be construed accordingly. (Amended 25 of 1998 s. 2)
 (3)Without prejudice to the powers conferred on him by subsection (1), the Chief Justice may appoint a deputy judge under that subsection—
 (a)for the purposes of a specified case or class of cases only; or
 (b)for a specified period only.
 (4)Notwithstanding subsection (2), the Chief Justice may terminate the appointment of a deputy judge at any time.
 (Amended 49 of 1983 s. 5)
 11.Powers of recorders and deputy judges in cases which are part-heard on termination of appointment
 If the hearing of any proceedings before a recorder or deputy judge is adjourned or if he reserves judgment in any proceedings, the recorder or deputy judge shall have power to resume the hearing and determine the proceedings or deliver judgment, notwithstanding that his appointment as a recorder or deputy judge has expired or has been terminated.
 (Amended 49 of 1983 s. 5; 80 of 1994 s. 9)
 11AA.Interpretation of this section and sections 11A and 11B
 In this section and sections 11A and 11B—
 Circular (《通告》) means a Circular issued by the Chief Justice on the details of the retirement age (extension) arrangement for judicial officers engaged on terms that do not attract pension benefits under the Pension Benefits (Judicial Officers) Ordinance (Cap. 401);
 judge of the High Court (高等法院法官) means a judge of the High Court (other than a judge appointed under section 8, a recorder and a deputy judge);
 retirement age (extension) arrangement (退休年齡(延展)安排) means the arrangements in relation to the extension of the ages of retirement and terms of office for judicial officers as provided by the amendments contained in the Judicial Officers (Extension of Retirement Age) (Amendment) Ordinance 2019 (10 of 2019).
 (Added 10 of 2019 s. 3)
 11A.Term of office of judges
 (1)A judge of the High Court must vacate his office when he attains the retirement age.
 (2)Notwithstanding the fact that he has attained the retirement age, a person holding the office of a judge of the High Court may continue in office for so long after attaining the retirement age as may be necessary to enable him to deliver judgment or to do any other thing in relation to proceedings that were commenced before him before he attained that age.
 (3)Notwithstanding subsection (1)—
 (a)a person who has attained the age of 70 years may be appointed to be a judge of the High Court (whether or not the person has previously held office as such) for a specified period or periods not exceeding 5 years in the aggregate by the Chief Executive acting in accordance with the recommendation of the Judicial Officers Recommendation Commission; and (Replaced 10 of 2019 s. 4)
 (b)the term of office of a judge of the High Court (other than a person appointed to be a judge under paragraph (a)) may be extended for a specified period or periods not exceeding 5 years in the aggregate by the Chief Executive acting in accordance with the recommendation of the Judicial Officers Recommendation Commission,
 and in any such case the judge is accordingly to be regarded as having attained the retirement age at the expiration of the specified period or periods.
 (4)A judge of the High Court may at any time resign his office by notice in writing addressed to the Chief Executive.
 (5)In this section—
 retirement age (退休年齡), for a judge of the High Court, means—
 (a)unless paragraph (b) applies—the age of 70 years;
 (b)if the judge could have opted for the retirement age (extension) arrangement pursuant to section 11A of the Pension Benefits (Judicial Officers) Ordinance (Cap. 401) or the Circular, and has not so opted—the age of 65 years. (Replaced 10 of 2019 s. 4)
 (Added 26 of 1997 s. 3. Amended 25 of 1998 s. 2; 10 of 2019 s. 4)
 11B.Transitional provisions relating to retirement age (extension) arrangement
 (1)In this section—
 specified judge (指明法官) means a judge of the High Court—
 (a)whose term of office has been extended under section 11A(3)(b) before the commencement date* of the Judicial Officers (Extension of Retirement Age) (Amendment) Ordinance 2019 (10 of 2019); and
 (b)who has opted for the retirement age (extension) arrangement pursuant to section 11A of the Pension Benefits (Judicial Officers) Ordinance (Cap. 401) or the Circular.
 (2)If, but for this section, the extended term of office of a specified judge would have expired before the judge attains the age of 70 years, the judge’s term of office is extended to the date immediately before the judge attains the age of 70 years.
 (3)When a specified judge attains the age of 70 years, the judge’s term of office may be further extended under section 11A(3)(b) for a specified period or periods not exceeding 5 years in the aggregate, as if the judge’s term of office had not previously been extended.
 (Added 10 of 2019 s. 5)
 Editorial Note:
 * Commencement date: 6 December 2019.
 Part III
 Jurisdiction, Law, Practice and Powers
 12.Jurisdiction of Court of First Instance
 (1)The Court of First Instance shall be a superior court of record.
 (2)The civil jurisdiction of the Court of First Instance shall consist of—
 (a)original jurisdiction and authority of a like nature and extent as that held and exercised by the Chancery, Family and Queen’s Bench Divisions of the High Court of Justice in England; and
 (b)any other jurisdiction, whether original or appellate jurisdiction, conferred on it by any law.
 (3)The criminal jurisdiction of the Court of First Instance shall consist of—
 (a)original jurisdiction of a like nature and extent as that held and exercised in criminal matters by the High Court of Justice and the Crown Court in England respectively; and
 (b)any other jurisdiction, whether original or appellate jurisdiction, conferred on it by any law.
 (4)(Repealed 81 of 1997 s. 59)
 (Amended 25 of 1998 s. 2)
 12A.Admiralty jurisdiction of Court of First Instance
 (1)The Admiralty jurisdiction of the Court of First Instance shall consist of—  (Amended 25 of 1998 s. 2)
 (a)jurisdiction to hear and determine any of the questions and claims mentioned in subsection (2);
 (b)jurisdiction in relation to any of the proceedings mentioned in subsection (3);
 (c)any other Admiralty jurisdiction which it had immediately before the commencement of the Supreme Court (Amendment) Ordinance 1989 (3 of 1989).
 (2)The questions and claims referred to in subsection (1)(a) are—
 (a)any claim to the possession or ownership of a ship or to the ownership of any share therein;
 (b)any question arising between the co-owners of a ship as to possession, employment or earnings of that ship;
 (c)any claim in respect of a mortgage of or charge on a ship or any share therein;
 (d)any claim for damage received by a ship;
 (e)any claim for damage done by a ship;
 (f)any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment, or in consequence of the wrongful act, neglect or default of—
 (i)the owners, charterers or persons in possession or control of a ship; or
 (ii)the master or crew of a ship, or any other person for whose wrongful acts, neglects or defaults the owners, charterers or persons in possession or control of a ship are responsible,
 being an act, neglect or default in the navigation or management of the ship, in the loading, carriage or discharge of goods on, in or from the ship, or in the embarkation, carriage or disembarkation of persons on, in or from the ship;
 (g)any claim for loss of or damage to goods carried in a ship;
 (h)any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship;
 (i)any claim—
 (i)under the Salvage Convention 1989;
 (ii)under any contract for or in relation to salvage services; or
 (iii)in the nature of salvage not falling within subparagraph (i) or (ii);
 or any corresponding claim in connection with an aircraft; (Replaced 35 of 1997 s. 9)
 (j)any claim in the nature of towage in respect of a ship or an aircraft;
 (k)any claim in the nature of pilotage in respect of a ship or an aircraft;
 (l)any claim in respect of goods or materials supplied to a ship for her operation or maintenance;
 (m)any claim in respect of the construction, repair or equipment of a ship or in respect of dock charges or dues;
 (n)any claim by a master or member of the crew of a ship for wages (including any sum allotted out of wages or adjudged by a superintendent to be due by way of wages);
 (o)any claim by a master, shipper, charterer or agent in respect of disbursements made on account of a ship;
 (p)any claim arising out of an act which is or is claimed to be a general average act;
 (q)any claim arising out of bottomry;
 (r)any claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried, in a ship, or for the restoration of a ship or any such goods after seizure, or for droits of Admiralty;
 (s)any claim arising under section 7 of the Merchant Shipping (Prevention and Control of Pollution) Ordinance (Cap. 413). (Replaced 37 of 1990 s. 12(2))
 (3)The proceedings referred to in subsection (1)(b) are—
 (a)any application to the Court of First Instance under—  (Amended 25 of 1998 s. 2)
 (i)the Merchant Shipping Acts 1894 to 1979# in their application to Hong Kong;
 (ii)the Merchant Shipping Ordinance (Cap. 281);
 (iii)the Merchant Shipping (Safety) Ordinance (Cap. 369);
 (iv)the Merchant Shipping (Liability and Compensation for Oil Pollution) Ordinance (Cap. 414); (Amended 55 of 1993 s. 30)
 (v)the Merchant Shipping (Registration) Ordinance (Cap. 415); (Replaced 74 of 1990 s. 104(3). Amended 55 of 1993 s. 30; 24 of 2005 s. 55)
 (vi)the Merchant Shipping (Limitation of Shipowners Liability) Ordinance (Cap. 434); (Added 55 of 1993 s. 30. Amended 24 of 2005 s. 55; 14 of 2009 s. 34)
 (vii)the Merchant Shipping (Local Vessels) Ordinance (Cap. 548); or (Added 24 of 2005 s. 55. Amended 14 of 2009 s. 34)
 (viii)the Bunker Oil Pollution (Liability and Compensation) Ordinance (Cap. 605); (Added 14 of 2009 s. 34)
 (b)any action to enforce a claim for damage, loss of life or personal injury arising out of—
 (i)a collision between ships;
 (ii)the carrying out of or omission to carry out a manoeuvre in the case of 1 or more of 2 or more ships; or
 (iii)non-compliance, on the part of 1 or more of 2 or more ships, with the collision regulations;
 (c)any action by shipowners or other persons under—
 (i)the Merchant Shipping Acts 1894 to 1979# in their application to Hong Kong;
 (ii)(Repealed 24 of 2005 s. 55)
 (iii)the Merchant Shipping (Safety) Ordinance (Cap. 369); (Amended 55 of 1993 s. 30)
 (iv)the Merchant Shipping (Liability and Compensation for Oil Pollution) Ordinance (Cap. 414); (Amended 55 of 1993 s. 30; 24 of 2005 s. 55)
 (v)the Merchant Shipping (Limitation of Shipowners Liability) Ordinance (Cap. 434); (Added 55 of 1993 s. 30. Amended 24 of 2005 s. 55; 14 of 2009 s. 34)
 (vi)the Merchant Shipping (Local Vessels) Ordinance (Cap. 548); or (Added 24 of 2005 s. 55. Amended 14 of 2009 s. 34)
 (vii)the Bunker Oil Pollution (Liability and Compensation) Ordinance (Cap. 605), (Added 14 of 2009 s. 34)
 for the limitation of the amount of their liability in connection with a ship or other property. (Replaced 38 of 1990 Sch. 2)
 (4)The jurisdiction of the Court of First Instance under subsection (2)(b) includes power to settle any account outstanding and unsettled between the parties in relation to the ship, and to direct that the ship, or any share thereof, shall be sold, and to make such other order as the court thinks fit. (Amended 25 of 1998 s. 2)
 (5)Subsection (2)(e) extends to—
 (a)any claim in respect of a liability incurred under Part II of the Merchant Shipping (Liability and Compensation for Oil Pollution) Ordinance (Cap. 414); (Amended 14 of 2009 s. 34)
 (b)any claim in respect of a liability incurred by the International Oil Pollution Compensation Fund under Part III of that Ordinance; and (Replaced 38 of 1990 Sch. 2. Amended 14 of 2009 s. 34)
 (c)any claim in respect of a liability incurred under section 5 of the Bunker Oil Pollution (Liability and Compensation) Ordinance (Cap. 605). (Added 14 of 2009 s. 34)
 (6)In subsection (2)(i)—
 (a)the Salvage Convention 1989 (1989年救助公約) means the International Convention on Salvage 1989 as it has effect under section 9 of the Merchant Shipping (Collision Damage Liability and Salvage) Ordinance (Cap. 508);
 (b)the reference to salvage services includes services rendered in saving life from a ship and the reference to any claim under any contract for or in relation to salvage services includes any claim arising out of such a contract whether or not arising during the provision of the services;
 (c)the reference to a corresponding claim in connection with an aircraft is a reference to any claim corresponding to any claim mentioned in subsection (2)(i)(i) or (ii) which is available under section 9 of the Civil Aviation Ordinance (Cap. 448). (Replaced 35 of 1997 s. 9)
 (7)Subsections (1) to (6) apply—
 (a)in relation to all ships or aircraft, whether British or not and whether registered or not and wherever the residence or domicile of their owners may be;
 (b)in relation to all claims, wherever arising (including, in the case of cargo or wreck salvage, claims in respect of cargo or wreck found on land); and
 (c)so far as they relate to mortgages and charges, to all mortgages or charges, whether registered or not and whether legal or equitable, including mortgages and charges created under foreign law.
 (8)Nothing in subsection (7) shall be construed as extending the cases in which money or property is recoverable under any of the provisions of—
 (a)the Merchant Shipping Acts 1894 to 1979# in their application to Hong Kong;
 (b)the Merchant Shipping Ordinance (Cap. 281);
 (ba)the Merchant Shipping (Seafarers) Ordinance (Cap. 478); (Added 44 of 1995 s. 143)
 (c)the Merchant Shipping (Safety) Ordinance (Cap. 369);
 (d)the Merchant Shipping (Liability and Compensation for Oil Pollution) Ordinance (Cap. 414); (Replaced 38 of 1990 Sch 2. Amended 55 of 1993 s. 30)
 (e)the Merchant Shipping (Registration) Ordinance (Cap. 415); (Added 74 of 1990 s. 104(3). Amended 55 of 1993 s. 30; 24 of 2005 s. 55)
 (f)the Merchant Shipping (Limitation of Shipowners Liability) Ordinance (Cap. 434); (Added 55 of 1993 s. 30. Amended 24 of 2005 s. 55; 14 of 2009 s. 34)
 (g)the Merchant Shipping (Local Vessels) Ordinance (Cap. 548); or (Added 24 of 2005 s. 55. Amended 14 of 2009 s. 34)
 (h)the Bunker Oil Pollution (Liability and Compensation) Ordinance (Cap. 605). (Added 14 of 2009 s. 34)
 (Added 3 of 1989 s. 2)
 [cf. 1981 c. 54 s. 20 U.K.]
 Editorial Note:
 # Please also see following—
 (a)in relation to the Merchant Shipping Act 1894, Part 3 of Schedule 5 to Cap. 415 and s. 1 of Schedule 2 to Cap. 508;
 (b)in relation to the Merchant Shipping Acts 1894 to 1979, s. 117 of Cap. 281, s. 103 of Cap. 415 and s. 142 of Cap. 478.
 12B.Mode of exercise of Admiralty jurisdiction
 (1)Subject to section 12C an action in personam may be brought in the Court of First Instance in all cases within the Admiralty jurisdiction of that court.
 (2)In the case of any such claim as is mentioned in section 12A(2)(a), (c) or (r) or any such question as is mentioned in section 12A(2)(b), an action in rem may be brought in the Court of First Instance against the ship or property in connection with which the claim or question arises and such action shall be deemed to be brought by and upon the issue of the writ in rem.
 (3)In any case in which there is a maritime lien or other charge on any ship, aircraft or other property for the amount claimed, an action in rem may be brought in the Court of First Instance against that ship, aircraft or property.
 (4)In the case of any such claim as is mentioned in section 12A(2)(e) to (q), where—
 (a)the claim arises in connection with a ship; and
 (b)the person who would be liable on the claim in an action in personam (the relevant person) was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship,
 an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the Court of First Instance against—
 (i)that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of it under a charter by demise; or
 (ii)any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.
 (5)In the case of a claim in the nature of towage or pilotage in respect of an aircraft, an action in rem may be brought in the Court of First Instance against that aircraft if, at the time when the action is brought, it is beneficially owned by the person who would be liable on the claim in an action in personam.
 (6)Where, in the exercise of its Admiralty jurisdiction, the Court of First Instance orders any ship, aircraft or other property to be sold, the court shall have jurisdiction to hear and determine any question arising as to the title to the proceeds of sale.
 (6A)The Court of First Instance may order a stay of Admiralty proceedings under section 20 of the Arbitration Ordinance (Cap. 609), subject to any conditions that it may impose, including the making of an order for the property arrested or the bail or security given in those proceedings to be retained as security for the satisfaction of any award made in the arbitration. (Added 17 of 2010 s. 112)
 (7)In determining for the purposes of subsections (4) and (5) whether a person would be liable on a claim in an action in personam it shall be assumed that he has his habitual residence or a place of business within Hong Kong.
 (8)Where, as regards any such claim as is mentioned in section 12A(2)(e) to (q), a ship has been served with a writ or arrested in an action in rem brought to enforce that claim, no other ship may be served with a writ or arrested in that or any other action in rem brought to enforce that claim; but this subsection does not prevent the issue, in respect of any one such claim, of a writ naming more than 1 ship or of 2 or more writs each naming a different ship.
 (Added 3 of 1989 s. 2. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 21 U.K.]
 12C.Restrictions on entertainment of actions in personam in collision and other similar cases
 (1)This section applies to any claim for damage, loss of life or personal injury arising out of—
 (a)a collision between ships;
 (b)the carrying out of, or omission to carry out, a manoeuvre in the case of 1 or more of 2 or more ships; or
 (c)non-compliance, on the part of 1 or more of 2 or more ships, with the collision regulations.
 (2)The Court of First Instance shall not entertain any action in personam to enforce a claim to which this section applies unless—
 (a)the defendant has his habitual residence or a place of business in Hong Kong;
 (b)the cause of action arose within the waters of Hong Kong; or
 (c)an action arising out of the same incident or series of incidents is proceeding in the court or has been heard and determined in the court.
 (3)The Court of First Instance shall not entertain any action in personam to enforce a claim to which this section applies until any proceedings previously brought by the plaintiff in any court outside Hong Kong against the same defendant in respect of the same incident or series of incidents have been discontinued or otherwise come to an end.
 (4)Subsections (2) and (3) shall apply to counterclaims (except counterclaims in proceedings arising out of the same incident or series of incidents) as they apply to actions, the references to the plaintiff and the defendant being for this purpose read as references to the plaintiff on the counterclaim and the defendant to the counterclaim respectively.
 (5)Subsections (2) and (3) shall not apply to any action or counterclaim if the defendant thereto submits or has agreed to submit to the jurisdiction of the court.
 (6)Subject to subsection (3), the Court of First Instance shall have jurisdiction to entertain an action in personam to enforce a claim to which this section applies whenever any of the conditions specified in subsection (2)(a) to (c) is satisfied, and the rules of court relating to the service of process outside the jurisdiction shall make such provision as may appear to the Rules Committee constituted under section 55 to be appropriate having regard to the provisions of this subsection.
 (7)Nothing in this section shall prevent an action which is brought in accordance with the provisions of this section in the Court of First Instance being transferred, in accordance with the enactments in that behalf, to some other court.
 (8)For the avoidance of doubt, it is hereby declared that this section applies in relation to the jurisdiction of the Court of First Instance not being Admiralty jurisdiction as well as in relation to its Admiralty jurisdiction.
 (Added 3 of 1989 s. 2. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 22 U.K.]
 12D.Court of First Instance not to have jurisdiction in cases within Rhine Navigation Convention
 The Court of First Instance shall not have jurisdiction to determine any claim or question certified by the Governor to be a claim or question which under the Rhine Navigation Convention, falls to be determined in accordance with the provisions of that Convention; and any proceedings to enforce such a claim which are commenced in the Court of First Instance shall be set aside.
 (Added 3 of 1989 s. 2. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 23 U.K.]
 12E.Supplementary provisions as to Admiralty jurisdiction
 (1)In sections 12A to 12D and this section, unless the context otherwise requires—
 collision regulations (碰撞規例) means regulations made or deemed to have been made under Part IX of the Merchant Shipping (Safety) Ordinance (Cap. 369);
 goods (貨物) includes baggage;
 hovercraft (氣墊船) means a vehicle designed to be supported when in motion wholly, or partly, by air expelled from the vehicle to form a cushion of which the boundaries include the ground, water or other surface beneath the vehicle;
 master (船長) includes every person (except a pilot) having command or charge of a ship;
 Rhine Navigation Convention (《萊茵河航行公約》) means the Convention of 7 October 1868 as revised by any subsequent convention;
 ship (船舶) includes any description of vessel used in navigation and (except in subsection (2)(c) of this section) includes, subject to any regulations made by the Governor, a hovercraft;
 towage (拖曳) and pilotage (領港) in relation to an aircraft, mean towage and pilotage while the aircraft is waterborne.
 (2)Nothing in sections 12A to 12D shall—
 (a)be construed as limiting the jurisdiction of the Court of First Instance to refuse to entertain an action for wages by the master or a member of the crew of a ship, not being a British ship or a ship registered in Hong Kong; (Amended 74 of 1990 s. 104(3); 25 of 1998 s. 2)
 (b)affect the provisions of section 552 of the Merchant Shipping Act 1894 (1894 c. 60 U.K.)# (power of a receiver of wreck to detain a ship in respect of a salvage claim) in its application to Hong Kong; or
 (c)authorize proceedings in rem in respect of any claim against the Crown, or the arrest, detention or sale of any of Her Majesty’s ships or Her Majesty’s aircraft or Her Majesty’s hovercraft, or, subject to any regulations made by the Governor, of any ship, aircraft, hovercraft, cargo or other property belonging to the Crown or the Government of Hong Kong.
 (3)Droits of Admiralty or droits of or forfeitures to the Crown condemned by the Court of First Instance shall become the property of the Government of Hong Kong and the Court of First Instance may of its own motion or upon application order that such property be sold and the proceeds paid into the general revenue. (Amended 25 of 1998 s. 2)
 (4)In this section—
 Her Majesty’s hovercraft (女皇陛下的氣墊船) means hovercraft belonging to the Crown in right of Her Majesty’s Government in the United Kingdom or Her Majesty’s Government in Hong Kong;
 Her Majesty’s ships (女皇陛下的船舶) and Her Majesty’s aircraft (女皇陛下的航空器) have the meanings given by section 38(2) of the Crown Proceedings Act 1947 (1947 c. 44 U.K.).
 (Amended E.R. 1 of 2017)
 (Added 3 of 1989 s. 2)
 [cf. 1981 c. 54 s. 24 U.K.]
 Editorial Note:
 #Please also see following—
 (a)in relation to the Merchant Shipping Act 1894, Part 3 of Schedule 5 to Cap. 415 and s. 1 of Schedule 2 to Cap. 508;
 (b)in relation to the Merchant Shipping Acts 1894 to 1979, s. 117 of Cap. 281, s. 103 of Cap. 415 and s. 142 of Cap. 478.
 12F.Transfer of proceedings to the Lands Tribunal
 The Court of First Instance may, either of its own motion or on the application of any party, order at any stage the transfer to the Lands Tribunal of all or part of any action or proceedings before it which are within the jurisdiction of the Lands Tribunal.
 (Added 3 of 2008 s. 43)
 13.Jurisdiction of Court of Appeal
 (1)The Court of Appeal shall be a superior court of record.
 (2)The civil jurisdiction of the Court of Appeal shall consist of—
 (a)appeals from any judgment or order of the Court of First Instance in any civil cause or matter; (Amended 25 of 1998 s. 2)
 (b)appeals under section 63 of the District Court Ordinance (Cap. 336); and
 (c)any other jurisdiction conferred on it by any law.
 (3)The criminal jurisdiction of the Court of Appeal shall consist of—
 (a)appeals from the Court of First Instance or District Court under Part IV of the Criminal Procedure Ordinance (Cap. 221); (Amended 25 of 1998 s. 2)
 (aa)appeals from a judgment or order of the Court of First Instance given or made in the exercise of the powers conferred on it under section 21I(1) and relating to a criminal cause or matter; (Added 2 of 1993 s. 3. Amended 25 of 1998 s. 2)
 (b)the consideration of questions of law reserved under section 81(1) of the Criminal Procedure Ordinance (Cap. 221);
 (c)the consideration of—
 (i)applications by the Secretary for Justice for the review of any sentence under section 81A(1) of the Criminal Procedure Ordinance (Cap. 221);
 (ii)references by the Secretary for Justice of questions of law under section 81D of the Criminal Procedure Ordinance (Cap. 221); (Replaced 20 of 1979 s. 10. Amended L.N. 362 of 1997)
 (d)appeals by way of case stated from the District Court under section 84 of the District Court Ordinance (Cap. 336); and
 (e)any other jurisdiction conferred on it by any law.
 (4)For the purposes of and incidental to—
 (a)the hearing and determination of any appeal to the Court of Appeal; and
 (b)the amendment, execution and enforcement of any judgment or order made on such an appeal,
 the Court of Appeal shall have all the authority and jurisdiction of the court or tribunal from which the appeal was brought. (Added 52 of 1987 s. 9) [cf. 1981 c. 54 s. 15 U.K.]
 (5)Any provision in this or any other Ordinance which authorizes or requires the taking of any steps for the execution or enforcement of a judgment or order of the Court of First Instance applies in relation to a judgment or order of the Court of Appeal as it applies in relation to a judgment or order of the Court of First Instance. (Added 52 of 1987 s. 9. Amended 25 of 1998 s. 2)
 14.Appeals in civil matters
 (1)Subject to subsection (3) and section 14AA, an appeal shall lie as of right to the Court of Appeal from every judgment or order of the Court of First Instance in any civil cause or matter. (Amended 25 of 1998 s. 2; 3 of 2008 s. 24)
 (2)(Repealed 52 of 1987 s. 10)
 (3)No appeal shall lie—
 (a)from an order of the Court of First Instance allowing an extension of time for appealing from a judgment or order; (Amended 25 of 1998 s. 2) [cf. 1925 c. 49 s. 31 U.K.]
 (b)(Repealed 52 of 1987 s. 10)
 (c)from a judgment or order of the Court of First Instance, where it is provided by any Ordinance or by rules of court that the same is to be final; (Amended 25 of 1998 s. 2)
 (d)from an order absolute for the dissolution or nullity of marriage in favour of any party who, having had time and opportunity to appeal from the decree nisi on which the order was founded, has not appealed from that decree;
 (e)without the leave of the court or tribunal in question or of the Court of Appeal, from an order of the Court of First Instance or any other court or tribunal made with the consent of the parties or relating only to costs which are by law left to the discretion of the court or tribunal; (Replaced 52 of 1987 s. 10. Amended 25 of 1998 s. 2) [cf. 1981 c. 54 s. 18 U.K.]
 (ea)except as provided by the Arbitration Ordinance (Cap. 609), from any judgment or order of the Court of First Instance—  (Amended 25 of 1998 s. 2; 17 of 2010 s. 112)
 (i)under section 15(2) of that Ordinance refusing to direct an issue to be determined in accordance with an arbitration agreement; (Replaced 17 of 2010 s. 112)
 (ii)under section 20(1) or (2) of that Ordinance refusing to refer the parties to arbitration; (Replaced 17 of 2010 s. 112)
 (iii)under section 60(1) of that Ordinance directing the sale of property; (Added 17 of 2010 s. 112)
 (iv)under section 81 of that Ordinance to set aside an arbitral award; (Added 17 of 2010 s. 112)
 (v)under section 84, 87 or 92 of that Ordinance to grant or refuse leave to enforce an arbitral award; (Added 17 of 2010 s. 112)
 (vi)under section 3 of Schedule 2 to that Ordinance on a question of law arising in the course of arbitral proceedings; (Added 17 of 2010 s. 112)
 (vii)under section 4 of Schedule 2 to that Ordinance on a challenge against an arbitral award on the ground of serious irregularity; (Added 17 of 2010 s. 112)
 (viii)under section 5 or 6 of Schedule 2 to that Ordinance on a question of law arising out of an arbitral award; (Added 17 of 2010 s. 112)
 (ix)under section 7(2) and (3) of Schedule 2 to that Ordinance for an arbitral tribunal to state the reasons for its award and on related costs; (Added 17 of 2010 s. 112)
 (x)under section 7(4) and (6) of Schedule 2 to that Ordinance on the giving of security for the costs of an application to challenge an arbitral tribunal or an appeal on a question of law arising out of an arbitral award, and for the money payable under the award pending the determination of the application or appeal; or (Added 17 of 2010 s. 112)
 (xi)under section 7(7) of Schedule 2 to that Ordinance to impose conditions on granting leave to appeal on a question of law arising out of an arbitral award; (Added 17 of 2010 s. 112)
 (Added 52 of 1987 s. 10)
 (eb)from a decision of the Court of First Instance in respect of which a certificate is granted under section 27C of the Hong Kong Court of Final Appeal Ordinance (Cap. 484) and leave to appeal is granted under section 27D of that Ordinance in any proceedings; (Added 11 of 2002 s. 6)
 (f)
 without the leave of the Court of First Instance or the Court of Appeal, from a judgment or order of the Court of First Instance given or made in summarily determining under rules of court any question at issue in interpleader proceedings: (Amended 25 of 1998 s. 2)
 Provided that this paragraph shall have no effect in relation to any interpleader issue which is tried by a judge whether with or without a jury; (Amended 21 of 2001 s. 48)
 (g)from a determination, judgment, order or decision of the Court of First Instance referred to in section 22(1)(c), (d), (e), (f) or (g) of the Hong Kong Court of Final Appeal Ordinance (Cap. 484). (Added 21 of 2001 s. 48. Amended 13 of 2021 s. 30; 14 of 2021 s. 471; 8 of 2022 s. 15)
 (4)Rules of court made under section 54 may provide for orders or judgments of any prescribed description to be treated for any prescribed purpose connected with appeals to the Court of Appeal as final or as interlocutory. (Added 52 of 1987 s. 10) [cf. 1981 c. 54 s. 60 U.K.]
 (5)No appeal shall lie from a decision of the Court of Appeal as to whether a judgment or order is, for any purpose connected with an appeal to that court, final or interlocutory. (Added 52 of 1987 s. 10)
 14AA.Leave to appeal required for interlocutory appeals
 (1)Except as provided by rules of court, no appeal lies to the Court of Appeal from an interlocutory judgment or order of the Court of First Instance in any civil cause or matter unless leave to appeal has been granted by the Court of First Instance or the Court of Appeal.
 (2)Rules of court may specify a judgment or order of any prescribed description to which subsection (1) does not apply and accordingly an appeal lies as of right from the judgment or order.
 (3)Leave to appeal for the purpose of subsection (1) may be granted—
 (a)in respect of a particular issue arising out of the interlocutory judgment or order; and
 (b)subject to such conditions as the court hearing the application for leave considers necessary in order to secure the just, expeditious and economical disposal of the appeal.
 (4)Leave to appeal for the purpose of subsection (1) shall not be granted unless the court hearing the application for leave is satisfied that—
 (a)the appeal has a reasonable prospect of success; or
 (b)there is some other reason in the interests of justice why the appeal should be heard.
 (5)This section does not apply in relation to an interlocutory judgment or order of the Court of First Instance made before the commencement# of this section.
 (Added 3 of 2008 s. 25)
 Editorial Note:
 # Commencement day: 2 April 2009.
 14AB.Decision on leave to appeal final
 No appeal lies from a decision of the Court of Appeal as to whether or not leave to appeal to it should be granted.
 (Added 3 of 2008 s. 25)
 14A.Appeal from order on application for judicial review in criminal cause or matter
 An appeal shall lie to the Court of Appeal from a judgment or order of the Court of First Instance given or made on an application for judicial review referred to in section 21K(1) and relating to a criminal cause or matter.
 (Added 2 of 1993 s. 4. Amended 25 of 1998 s. 2)
 15.Application for new trial
 (1)Where any cause or matter or any issue in any cause or matter has been tried in the Court of First Instance, any application for a new trial thereof, or to set aside a verdict, finding or judgment therein, shall be heard and determined by the Court of Appeal.
 (2)Nothing in this section shall alter the practice in bankruptcy.
 (Replaced 52 of 1987 s. 11. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 17 U.K.]
 16.Law and equity to be administered in High Court
 (1)The Court of Appeal and the Court of First Instance, when exercising jurisdiction in any civil cause or matter, shall continue to administer law and equity on the basis that, wherever there is any conflict or variance between the rules of equity and the rules of the common law with reference to the same matter, the rules of equity shall prevail.
 (2)The Court of Appeal and the Court of First Instance shall give the same effect as hitherto—
 (a)to all equitable estates, titles, rights, reliefs, defences and counterclaims, and to all equitable duties and liabilities; and
 (b)subject thereto, to all legal claims and demands and all estates, titles, rights, duties, obligations, and liabilities existing by the common law or by any custom or created by any Ordinance,
 and shall so exercise its jurisdiction in every cause or matter before it as to secure that, as far as possible, all matters in dispute between the parties are completely and finally determined, and all multiplicity of legal proceedings with respect to any of those matters is avoided.
 (3)Nothing in this Ordinance shall affect the power of the Court of Appeal or the Court of First Instance to stay any proceedings before it, where it thinks fit to do so, either of its own motion or on the application of any person, whether or not a party to the proceedings.
 (Replaced 52 of 1987 s. 11. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 49 U.K.]
 17.Power to award damages as well as, or in substitution for, injunction or specific performance
 Where the Court of Appeal or the Court of First Instance has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substitution for, an injunction or specific performance.
 (Replaced 52 of 1987 s. 11. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 50 U.K.]
 18.(Repealed 52 of 1987 s. 12)
 19.(Repealed 52 of 1987 s. 12)
 20.Power of Court of First Instance to impose charging order
 (1)Where, under a judgment or order of the Court of First Instance, a person (in this section and in sections 20A and 20B referred to as the debtor) is required to pay a sum of money to another person (in this section and in section 20A referred to as the creditor) then, for the purpose of enforcing that judgment or order, the Court of First Instance may make an order imposing on any such property of the debtor as may be specified in the order a charge for securing the payment of any money due or to become due under the judgment or order. (Replaced 52 of 1987 s. 13)
 (2)An order under subsection (1) is referred to in this Ordinance as a charging order. (Replaced 52 of 1987 s. 13)
 (3)In deciding whether to make a charging order the Court of First Instance shall consider all the circumstances of the case and, in particular, any evidence before it as to—
 (a)the personal circumstances of the debtor; and
 (b)whether any other creditor of the debtor would be likely to be unduly prejudiced by the making of the order. (Replaced 52 of 1987 s. 13)
 (4)This section shall apply to a judgment, order, decree or award however called of any court or arbitrator or umpire, including any foreign court or foreign arbitrator or umpire, which is or has become enforceable, whether wholly or to a limited extent, as it applies to a judgment or order of the Court of First Instance. (Amended 17 of 2010 s. 112)
 (Amended 25 of 1998 s. 2)
 [cf. 1979 c. 53 s. 1 U.K.]
 20A.Property which may be charged
 (1)Subject to subsection (3), a charge may be imposed by a charging order only on—
 (a)an interest held by the debtor beneficially—
 (i)in any asset of a kind mentioned in subsection (2) or
 (ii)under any trust; or
 (b)an interest held by a person as trustee of a trust (in this paragraph referred to as the trust), if the interest is in an asset of a kind mentioned in subsection (2) or is an interest under another trust and—
 (i)the judgment or order in respect of which a charge is to be imposed was made against that person as trustee of the trust;
 (ii)the whole beneficial interest under the trust is held by the debtor unencumbered and for his own benefit; or
 (iii)in a case where there are 2 or more debtors all of whom are liable to the creditor for the same debt, they together hold the whole beneficial interest under the trust unencumbered and for their own benefit.
 (2)The assets referred to in subsection (1) are—
 (a)land;
 (b)securities of any of the following kinds—
 (i)Government stock;
 (ii)stock of any body incorporated in Hong Kong;
 (iii)stock of any body incorporated outside Hong Kong or of any state or territory outside Hong Kong, being stock registered in a register kept at any place within Hong Kong;
 (iv)units of any unit trust in respect of which a register of the unit holders is kept at any place within Hong Kong; or
 (c)funds in court.
 (3)In any case where a charge is imposed by a charging order on any interest in an asset of a kind mentioned in subsection (2)(b) or (c), the Court of First Instance may provide for the charge to extend to any interest, dividend or other distribution payable and any bonus issue in respect of the asset. (Amended 25 of 1998 s. 2)
 (4)In this section—
 dividend (派息) includes any distribution in respect of any unit of a unit trust; [cf. 1979 c. 53 s. 6 U.K.]
 stock (證券) includes shares, debentures, loan stocks, funds, bonds, notes, any other securities issued by the body concerned, whether or not constituting a charge on the assets of that body and any rights or options to subscribe for or be allotted any of the foregoing; and
 unit trust (單位信託) means any trust established for the purpose, or having the effect, of providing, for persons having funds available for investment, facilities for the participation by them, as beneficiaries under the trust, in any profits or income arising from the acquisition, holding, management or disposal of any property whatsoever.
 (Added 52 of 1987 s. 14)
 [cf. 1979 c. 53 s. 2 U.K.]
 20B.Provisions supplementary to sections 20 and 20A
 (1)A charging order may be made either absolutely or subject to conditions as to notifying the debtor or as to the time when the charge is to become enforceable, or as to other matters.
 (2)The Land Registration Ordinance (Cap. 128) shall apply in relation to charging orders as it applies in relation to other orders or writs issued or made for the purpose of enforcing judgments.
 (3)Subject to the provisions of this Ordinance, a charge imposed by a charging order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor by writing under his hand.
 (4)The Court of First Instance may at any time, on the application of the debtor or of any person interested in any property to which the order relates, make an order discharging or varying the charging order. (Amended 25 of 1998 s. 2)
 (5)In the case of a charging order registered pursuant to the Land Registration Ordinance (Cap. 128), if an order under subsection (4) discharging the charging order is made, the Land Registrar shall on the filing with him of a memorial and an office copy of such order, enter a discharge of such charging order on the register, and may issue certificates of such entry. (Amended 8 of 1993 s. 3)
 (Added 52 of 1987 s. 14)
 [cf. 1979 c. 53 s. 3 U.K.]
 21.Attachment of debts
 (1)A sum standing to the credit of a person in a deposit account in an authorized financial institution shall, for the purposes of the jurisdiction of the Court of First Instance to attach debts for the purpose of satisfying judgments or orders for the payment of money, be deemed to be a sum due or accruing to that person and, subject to rules of court, shall be attachable accordingly, notwithstanding that any of the following conditions applicable to the account, that is to say—  (Amended 52 of 1987 s. 15; 25 of 1998 s. 2)
 (a)any condition that notice is required before any money is withdrawn;
 (b)any condition that a personal application must be made before any money is withdrawn;
 (c)any condition that a deposit book must be produced before any money is withdrawn;
 (d)any condition that a receipt for money deposited must be produced before any money is withdrawn; or
 (e)any other condition prescribed by rules of court,
 has not been satisfied.
 (2)In this section authorized financial institution (認可金融機構) means an authorized institution within the meaning of section 2 of the Banking Ordinance (Cap. 155). (Added 52 of 1987 s. 15. Amended 49 of 1995 s. 53)
 [cf. 1956 c. 46 s. 38 U.K.]
 21A.No arrest or imprisonment without order
 (1)Subject to section 21B, a person shall not be arrested or imprisoned to enforce, secure or pursue a civil claim for the payment of money or damages except under an order of Court; and the Court shall have jurisdiction to make such an order for arrest or imprisonment only to enforce, secure or pursue a judgment for the payment of a specified sum of money.
 (2)An order for imprisonment under subsection (1) shall be for a period not exceeding 3 months.
 (3)The period mentioned in subsection (2) may be amended by resolution of the Legislative Council.
 (4)(a)The Court may, on application, discharge, vary or suspend an order for arrest or imprisonment made under this section, either absolutely or subject to such conditions as the Court thinks fit.
 (b)The Court may make an order for arrest or imprisonment under this section subject to such conditions as it thinks fit, including conditions as to the time and place of execution of the order and the condition that the judgment debtor be released on the payment of the judgment debt and costs, the provision of security by him or on his behalf or on the surrender of his travel documents.
 (5)In this section, Court (法庭) includes the Registrar or any Master. (Amended 52 of 1987 s. 16)
 (6)This section shall not affect any jurisdiction of the Court to make orders of committal in relation to—
 (a)contempt of court; or
 (b)disobedience of a judgment or order of the Court.
 (Added 1 of 1984 s. 2)
 21B.Prohibition on debtor leaving Hong Kong
 (1)The Court shall have jurisdiction to make an order prohibiting a person from leaving Hong Kong (a prohibition order) to facilitate the enforcement, securing or pursuance of—
 (a)a judgment against that person for the payment of a specified sum of money;
 (b)a judgment or order against that person—
 (i)for the payment of an amount to be assessed; or
 (ii)requiring him to deliver any property or perform any other act; or
 (c)a civil claim (other than a judgment)—
 (i)for the payment of money or damages; or
 (ii)for the delivery of any property or the performance of any other act.
 (2)The Court shall not make an order under subsection (1)(b) unless it is satisfied that there is probable cause for believing that—
 (a)the person against whom the order is sought is about to leave Hong Kong; and
 (b)by reason of paragraph (a), satisfaction of the judgment or order is likely to be obstructed or delayed.
 (3)The Court shall not make an order under subsection (1)(c) unless it is satisfied that there is probable cause for believing that—
 (a)there is a good cause of action;
 (b)the person against whom the order is sought—
 (i)incurred the alleged liability, which is the subject of the claim, in Hong Kong while he was present in Hong Kong; or
 (ii)carries on business in Hong Kong; or
 (iii)is ordinarily resident in Hong Kong;
 (c)that person is about to leave Hong Kong; and
 (d)by reason of paragraph (c), any judgment that may be given against that person is likely to be obstructed or delayed.
 (4)(a)The Court may, on application, discharge a prohibition order, either absolutely or subject to such conditions as the Court thinks fit.
 (b)The Court may make a prohibition order subject to such conditions as it thinks fit, including the condition that the order shall have no effect if the judgment debtor or person against whom the claim is made satisfies the judgment or the claim or provides such security as the Court may order.
 (5)(a)An order under subsection (1) shall lapse—
 (i)on the expiry of one month but the Court may, on the application of the judgment creditor or claimant, extend or renew the order for a period which does not exceed, with the initial period of one month and any other period of extension or renewal, 3 months; and
 (ii)on the service upon the Director of Immigration and the filing with the Registrar of a notice by the judgment creditor or claimant advising that the order is no longer required.
 (b)The judgment creditor or claimant shall serve and file the notice mentioned in paragraph (a)(ii) as soon as reasonably possible after the order is no longer required.
 (6)A copy of an order under subsection (1) and any other order ancillary thereto shall be served on the Director of Immigration, the Commissioner of Police and, if he can be found, the judgment debtor or person against whom the claim is made.
 (7)Where the Court makes an order under subsection (1) prohibiting a person from leaving Hong Kong, any person who, having been served with a copy of the order or otherwise informed of its effect, attempts to leave Hong Kong in contravention of that order may be arrested by any immigration officer, police officer or bailiff.
 (8)(a)A person arrested under subsection (7) shall be brought before the Court before the expiry of the day after the day of arrest and the Court may—
 (i)in the case mentioned in subsection (1)(a), make such order, for the examination or imprisonment of that person, under rules of court, as is appropriate;
 (ii)in the case of any other person, make an order for the imprisonment of that person until the lapse or discharge of the prohibition order; or
 (iii)in any case, make an order discharging that person from arrest either absolutely or upon compliance with such conditions as the Court thinks fit.
 (b)Section 71 of the Interpretation and General Clauses Ordinance (Cap. 1) shall not apply to this subsection.
 (9)The Director of Immigration shall not be liable for any failure to prevent any person against whom an order is made under this section from leaving Hong Kong.
 (10)In this section, Court (法院、法庭) includes the Registrar or any Master. (Amended 52 of 1987 s. 17)
 (11)The form of order under this section may be prescribed by rules of court.
 (Added 1 of 1984 s. 2)
 21C.Effect of writs of execution against goods
 (1)Subject to subsection (2), a writ of fieri facias or other writ of execution against goods issued from the Court of First Instance shall bind the property in the goods of the execution debtor as from the time when the writ is delivered to the bailiff to be executed. (Amended 25 of 1998 s. 2)
 (2)A writ of a kind referred to in subsection (1) shall not prejudice the title to any goods of the execution debtor acquired by a person in good faith and for valuable consideration unless he had, at the time when he acquired his title, notice that that writ or any other such writ by virtue of which the goods of the execution debtor might be seized or attached had been delivered to and remained unexecuted in the hands of the bailiff.
 (3)For the better manifestation of the time mentioned in subsection (1), it shall be the duty of the bailiff (without fee) on receipt of any such writ as is there mentioned to endorse on its back the hour, day, month and year when he received it.
 (4)In this section and in section 21D—
 (a)property (產權) means the general property in goods, and not merely a special property;
 (b)bailiff (執達主任) includes any officer charged with the enforcement of a writ of execution;
 (c)any reference to the goods of the execution debtor is to be deemed a reference to property liable to attachment and sale in execution of a judgment;
 (d)an act shall be treated as done in good faith if it is in fact done honestly, whether it is done negligently or not.
 (Added 52 of 1987 s. 18)
 [cf. 1981 c. 54 s. 138 U.K.]
 21D.Sale of property in execution of judgment
 (1)
 The following property is liable to attachment and sale in execution of a judgment, namely, land, goods, money, bank notes, cheques, bills of exchange, promissory notes, Government stock, bonds, or other securities for money, debts, shares in the capital or joint stock of any company or corporation, (other than a private company within the meaning of section 11 of the Companies Ordinance (Cap. 622)) and all other property whatsoever, whether movable or immovable, belonging to the judgment debtor, and whether the same is held in his own name or by another person in trust for him or on his behalf: (Amended 28 of 2012 ss. 912 & 920)
 Provided that the following property shall not be so liable, namely, the tools (if any) of the trade of the judgment debtor and the necessary wearing apparel and bedding of him and his family dependent on and residing with him, to a value, inclusive of tools and apparel and bedding, not exceeding $10,000 in the whole.
 (2)
 Where any goods in the possession of an execution debtor at the time of seizure by the bailiff charged with the enforcement of a writ, warrant or other process of execution, are sold by such bailiff without any claim having been made to them, the purchaser of the goods so sold shall, subject to subsection (3), acquire a good title to such goods and no person shall be entitled to recover against the bailiff, or anyone lawfully acting under his authority, except as provided by section 46 of the Bankruptcy Ordinance (Cap. 6), for any sale of such goods or for paying over the proceeds thereof prior to the receipt of a claim to the said goods, unless it is proved that the person from whom recovery is sought had notice or might by making reasonable inquiry have ascertained that the goods were not the property of the execution debtor:
 Provided that nothing in this subsection shall affect the right of any claimant who may prove that at the time of sale he had title to any goods so seized and sold to any remedy to which he may be entitled against any person other than such bailiff or purchaser as aforesaid.
 (3)Notwithstanding the preceding provisions of this section the Court may, subject to rules of court, set aside the sale of any immovable property in execution of a judgment on the ground of material irregularity in the conduct of the sale.
 (Added 52 of 1987 s. 18)
 21E.Enforcement of fines and forfeited recognizances
 (1)Payment of a fine imposed, or sum due under a recognizance forfeited, by the Court of Appeal in its civil jurisdiction or by the Court of First Instance may be enforced upon the order of the Court in like manner as a judgment of the Court of First Instance for the payment of money.
 (2)Where payment of a fine or other sum falls to be enforced upon an order of the Court of Appeal in its civil jurisdiction or of the Court of First Instance—
 (a)the Court shall, if the fine or other sum is not paid in full forthwith or within such time as the Court may allow, certify to the Registrar the sum payable; and
 (b)the Registrar shall thereupon proceed to enforce payment of that sum as if it were due to him as a judgment debt.
 (3)In this section, fine (罰款) includes a penalty imposed in civil proceedings.
 (Added 52 of 1987 s. 18. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 140 U.K.]
 21F.Relief against forfeiture by action for non-payment of rent
 (1)Subject to subsection (1A), this section has effect where a lessor is proceeding by action in the Court of First Instance to enforce against a lessee a right of re-entry or forfeiture in respect of any land for non-payment of rent. (Amended 25 of 1998 s. 2; 32 of 2002 s. 40)
 (1A)Where during the term of a lease the application of this section has prevented a lessor from enforcing against a lessee a right mentioned in subsection (1), then during that term this section shall not be applicable again to prevent the lessor from exercising that right against the lessee unless the Court is satisfied that there is good cause why this section should apply in favour of the lessee. (Added 32 of 2002 s. 40)
 (2)If, within the time prescribed by rules of court for acknowledging service of the writ by which the action was commenced, the lessee pays into court all the rent in arrear and the costs of the action, the action shall cease, and the lessee shall hold the land according to the lease without any new lease.
 (3)If—
 (a)the action does not cease under subsection (2); and
 (b)the Court at the trial is satisfied that the lessor is entitled to enforce the right of re-entry or forfeiture,
 the Court shall order possession of the land to be given to the lessor at the expiration of such period, but not being less than 7 days from the date of the order, as the Court thinks fit, unless within that period the lessee pays into court all the rent in arrear and such sum as the Court shall direct on account of the costs of the action. (Amended 32 of 2002 s. 40)
 (3A)The Secretary for Development may, by notice published in the Gazette, amend the number of days specified in subsection (3) by substituting another number therefor. (Added 32 of 2002 s. 40. Amended L.N. 130 of 2007)
 (4)The Court may extend the period specified under subsection (3) at any time before possession of the land is recovered in pursuance of the order under that subsection.
 (5)Subject to subsection (6), if—
 (a)within the period specified in the order; or
 (b)within that period as extended under subsection (4),
 the lessee pays into court—
 (i)all the rent in arrear; and
 (ii)the sum directed to be paid on account of the costs of the action,
 he shall hold the land according to the lease without any new lease.
 (6)Subsection (2) shall not apply where the lessor is proceeding in the same action to enforce a right of re-entry or forfeiture on any other ground as well as for non-payment of rent, or to enforce any other claim as well as the right of re-entry or forfeiture and the claim for arrears of rent.
 (7)If the lessee does not—
 (a)within the period specified in the order; or
 (b)within that period as extended under subsection (4),
 pay into court—
 (i)all the rent in arrear; and
 (ii)the sum directed to be paid on account of the costs of the action,
 the order may be enforced and so long as the order remains unreversed the lessee shall be barred from all relief.
 (8)The extension under subsection (4) of a period fixed by the Court shall not be treated as relief from which the lessee is barred by subsection (7) if he fails to pay into court all the rent in arrear and the sum directed to be paid on account of the costs of the action within that period.
 (9)Where the Court extends a period under subsection (4) at a time when—
 (a)that period has expired; and
 (b)a writ of possession in respect of the land has been issued,
 the Court shall suspend the writ for the extended period, and if, before the expiration of the extended period, the lessee pays into court all the rent in arrear and the sum directed to be paid on account of the costs of the action, the Court shall cancel the writ.
 (10)Nothing in this section shall be taken to affect—
 (a)the power of the Court to enter final judgment in a case where the defendant fails to give notice of intention to defend;
 (b)the power of the Court to make any order which it would otherwise have power to make as respects a right of re-entry or forfeiture on any ground other than non-payment of rent; or
 (c)section 58(4) of the Conveyancing and Property Ordinance (Cap. 219).
 (Added 52 of 1987 s. 18)
 [cf. 1984 c. 28 s. 138 U.K.]
 Editorial Note:
 For the saving and transitional provisions relating to the amendments made by the Resolution of the Legislative Council (L.N. 130 of 2007), see paragraph (12) of that Resolution.
 21G.Service of writ in lieu of demand
 In a case where section 21F has effect, if—
 (a)one-half-year’s rent is in arrear at the time of the commencement of the action;
 (b)the lessor has a right of re-entry for non-payment of that rent; and
 (c)no sufficient distress is to be found on the premises countervailing the arrears then due,
 the service of the writ in the action in the prescribed manner shall stand in lieu of a demand and re-entry.
 (Added 52 of 1987 s. 18)
 [cf. 1984 c. 28 s. 139 U.K.]
 21H.Interpretation and application of sections 21F, 21G and 21H
 (1)In this section and sections 21F and 21G—
 lease (租契) includes—
 (a)an original or derivative under-lease; and
 (b)an agreement for a lease where the lessee has become entitled to have his lease granted;
 lessee (承租人) includes—
 (a)an original or derivative under-lessee; and
 (b)the persons deriving title under a lessee;
 lessor (出租人) includes—
 (a)an original or derivative under-lessor; and
 (b)the persons deriving title under a lessor;
 trial (審訊) includes the hearing of an application for summary judgment;
 under-lease (分租租契) includes an agreement for an under-lease where the under-lessee has become entitled to have his under-lease granted;
 under-lessee (承轉租人) includes any person deriving title under an under-lessee.
 (2)Nothing in section 21F shall affect the provisions of the Government Rights (Re-entry and Vesting Remedies) Ordinance (Cap. 126). (Amended 29 of 1998 s. 3)
 (Added 52 of 1987 s. 18)
 [cf. 1984 c. 28 s. 140 U.K.]
 21I.Orders of mandamus, prohibition and certiorari
 (1)The Court of First Instance shall have jurisdiction to make orders of mandamus, prohibition and certiorari in those classes of cases in which it had power to do so immediately before the commencement of the Supreme Court (Amendment) Ordinance 1987 (52 of 1987). (Amended 25 of 1998 s. 2)
 (2)Every such order shall be final, subject to any right of appeal therefrom.
 (3)The power of the Court of First Instance under any enactment to require, magistrates or a judge or officer of a District Court to do any act relating to the duties of their respective offices, or to require a magistrate to state a case for the opinion of the Court of First Instance, in any case where the Court of First Instance formerly had by virtue of any enactment jurisdiction to make a rule absolute, or an order, for any of those purposes, shall be exercisable by order of mandamus. (Amended 47 of 1997 s. 10; 25 of 1998 s. 2)
 (4)In any enactment—
 (a)references to a writ of mandamus, of prohibition or of certiorari shall be read as references to the corresponding order; and
 (b)references to the issue or award of any such writ shall be read as references to the making of the corresponding order.
 (Added 52 of 1987 s. 18)
 [cf. 1981 c. 54 s. 29 U.K.]
 21J.Injunction to restrain persons acting in offices in which they are not entitled to act
 (1)Where a person not entitled to do so acts in an office to which this section applies, the Court of First Instance may—  (Amended 25 of 1998 s. 2)
 (a)grant an injunction restraining him from so acting; and
 (b)if the case so requires, declare the office to be vacant.
 (2)This section applies to any public office or office which has been created by any enactment.
 (Added 52 of 1987 s. 18)
 [cf. 1981 c. 54 s. 30 U.K.]
 21K.Application for judicial review
 (1)An application to the Court of First Instance for one or more of the following forms of relief—
 (a)an order of mandamus, prohibition or certiorari;
 (b)an injunction under section 21J restraining a person not entitled to do so from acting in an office to which that section applies,
 shall be made in accordance with rules of court by a procedure to be known as an application for judicial review.
 (2)An application for a declaration or an injunction (not being an injunction mentioned in subsection (1)) may be made in accordance with rules of court by way of an application for judicial review, and on such an application the Court of First Instance may grant the declaration or injunction claimed if it considers that, having regard to—
 (a)the nature of the matters in respect of which relief may be granted by orders of mandamus, prohibition or certiorari;
 (b)the nature of the persons and bodies against whom relief may be granted by such orders; and
 (c)all the circumstances of the case,
 it would be just and convenient for the declaration to be made or the injunction to be granted, as the case may be.
 (3)No application for judicial review shall be made unless the leave of the Court of First Instance has been obtained in accordance with rules of court; and the court shall not grant leave to make such an application unless it considers that the applicant has a sufficient interest in the matter to which the application relates.
 (4)On an application for judicial review the Court of First Instance may award damages to the applicant if—
 (a)he has joined with his application a claim for damages arising from any matter to which the application relates; and
 (b)the court is satisfied that, if the claim had been made in an action begun by the applicant at the time of making his application, he would have been awarded damages.
 (5)If, on an application for judicial review seeking an order of certiorari, the Court of First Instance quashes the decision to which the application relates, the Court of First Instance may remit the matter to the court, tribunal or authority concerned, with a direction to reconsider it and reach a decision in accordance with the findings of the Court of First Instance.
 (6)Where the Court of First Instance considers that there has been undue delay in making an application for judicial review, the Court may refuse to grant—
 (a)leave for the making of the application; or
 (b)any relief sought on the application,
 if it considers that the granting of the relief sought would be likely to cause substantial hardship to, or substantially prejudice the rights of, any person or would be detrimental to good administration.
 (7)Subsection (6) is without prejudice to any enactment or rule of court which has the effect of limiting the time within which an application for judicial review may be made.
 (Added 52 of 1987 s. 18. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 31 U.K.]
 21L.Injunction and receiver
 (1)The Court of First Instance may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the Court of First Instance to be just or convenient to do so.
 (2)Any such order may be made either unconditionally or on such terms and conditions as the Court thinks just.
 (3)The power of the Court of First Instance under subsection (1) or section 21M to grant an interlocutory injunction restraining a party to any proceedings from removing from the jurisdiction of the Court of First Instance, or otherwise dealing with, assets located within that jurisdiction shall be exercisable in cases where that party is, as well as in cases where he is not, domiciled or resident or present within that jurisdiction. (Amended 3 of 2008 s. 9)
 (4)If, whether before, or at, or after the hearing of any cause or matter, an application is made for an injunction to prevent any threatened or apprehended waste or trespass, the injunction may be granted, if the Court of First Instance thinks fit, whether—
 (a)the person against whom the injunction is sought is or is not in possession under any claim of title or otherwise, or (if out of possession) does or does not claim a right to do the act sought to be restrained under any colour of title; and
 (b)the estates claimed by both or by either of the parties are legal or equitable.
 (5)The power of the Court of First Instance to appoint a receiver by way of equitable execution shall operate in relation to all legal estates and interests in land; and that power—
 (a)may be exercised in relation to an estate or interest in land whether or not a charge has been imposed on that land under section 20 for the purpose of enforcing the judgment, order, decree or award in question; and
 (b)shall be in addition to, and not in derogation of, any power of any court to appoint a receiver in proceedings for enforcing such a charge.
 (6)Where an order under section 20 imposing a charge for the purpose of enforcing a judgment, order, decree or award has been registered under section 2 of the Land Registration Ordinance (Cap. 128), section 3(2) of that Ordinance shall not apply to an order appointing a receiver made either—
 (a)in proceedings for enforcing the charge; or
 (b)by way of equitable execution of the judgment, order, decree or award or, as the case may be, of so much of it as required payment of moneys secured by the charge.
 (Added 52 of 1987 s. 18. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 37 U.K.]
 21M.Interim relief in the absence of substantive proceedings
 (1)Without prejudice to section 21L(1), the Court of First Instance may by order appoint a receiver or grant other interim relief in relation to proceedings which—
 (a)have been or are to be commenced in a place outside Hong Kong; and
 (b)are capable of giving rise to a judgment which may be enforced in Hong Kong under any Ordinance or at common law.
 (2)An order under subsection (1) may be made either unconditionally or on such terms and conditions as the Court of First Instance thinks just.
 (3)Subsection (1) applies notwithstanding that—
 (a)the subject matter of those proceedings would not, apart from this section, give rise to a cause of action over which the Court of First Instance would have jurisdiction; or
 (b)the appointment of the receiver or the interim relief sought is not ancillary or incidental to any proceedings in Hong Kong.
 (4)The Court of First Instance may refuse an application for appointment of a receiver or interim relief under subsection (1) if, in the opinion of the Court, the fact that the Court has no jurisdiction apart from this section in relation to the subject matter of the proceedings concerned makes it unjust or inconvenient for the Court to grant the application.
 (5)The power to make rules of court under section 54 includes power to make rules of court for—
 (a)the making of an application for appointment of a receiver or interim relief under subsection (1); and
 (b)the service out of the jurisdiction of an application or order for the appointment of a receiver or for interim relief.
 (6)Any rules made by virtue of this section may include such incidental, supplementary and consequential provisions as the Rules Committee considers necessary or expedient.
 (7)In this section, interim relief (臨時濟助) includes an interlocutory injunction referred to in section 21L(3).
 (Added 3 of 2008 s. 10)
 21N.Supplementary provisions as to interim relief in the absence of substantive proceedings
 (1)In exercising the power under section 21M(1), the Court of First Instance shall have regard to the fact that the power is—
 (a)ancillary to proceedings that have been or are to be commenced in a place outside Hong Kong; and
 (b)for the purpose of facilitating the process of a court outside Hong Kong that has primary jurisdiction over such proceedings.
 (2)The Court of First Instance has the same power to make any incidental order or direction for the purpose of ensuring the effectiveness of an order granted under section 21M as if the order were granted under section 21L in relation to proceedings commenced in Hong Kong.
 (Added 3 of 2008 s. 10)
 22.(Repealed 52 of 1987 s. 19)
 22A.Applications for, and issue of, writs of habeas corpus
 (1)An application may be made to the Court of First Instance—
 (a)alleging that a person named in the application is being detained without lawful justification; and
 (b)requesting the issue of a writ of habeas corpus in respect of that person.
 (2)An application can be made by the person alleged to be detained, or by any other person on that person’s behalf, and, in particular, can be made by or on behalf of a person who claims to be legally entitled to the custody of another person.
 (3)An application can be made ex parte.
 (4)As soon as practicable after receiving an application, the Court of First Instance must inquire into the allegation that the applicant is being unlawfully detained. All proceedings under this section are to be conducted in open court unless the Court, in exceptional circumstances specified by the Court, orders the proceedings, or a part of the proceedings, to be conducted in camera. All orders and decisions made in respect of those proceedings, and the reasons for those orders and decisions, are in every case to be announced in open court.
 (5)On considering the application, the Court of First Instance must, if satisfied that the application has substance, do either of the following—
 (a)order the issue of a writ of habeas corpus directing the person having custody of the applicant to have the applicant brought before the Court at a specified time on a specified date and to certify to the Court the grounds for the applicant’s detention;
 (b)order the person having custody of the applicant to appear before the Court in order to justify the lawfulness of the applicant’s detention.
 (6)The Court of First Instance may dismiss an application for a writ of habeas corpus if satisfied, on considering the application, that it has no substance.
 (7)The person to whom a writ of habeas corpus is directed must, not later than the time and on the date specified in the writ—
 (a)produce before the Court of First Instance the person alleged to be detained; and
 (b)make a formal return to the writ.
 However, the Court of First Instance may extend the time within which a writ of habeas corpus must be complied with if it is satisfied that there is a good reason to do so.
 (8)If for any reason it is not possible for the person to whom a writ of habeas corpus is directed to comply with the writ, that person must nevertheless make a return to the Court of First Instance specifying the reason why it is not possible to comply with the writ.
 (9)When a person is brought before the Court of First Instance in accordance with a writ of habeas corpus, the Court must immediately inquire into the circumstances surrounding the detention of the person and must order the release of that person from detention unless satisfied that the detention is lawful.
 (10)If a person who has custody of a detained person appears before the Court in accordance with an order made under subsection (5)(b) but fails to satisfy the Court that the detention is lawful, the Court must order the detained person to be released from detention immediately.
 (11)If a writ of habeas corpus has been issued in respect of a detained person, the person having custody of the detained person must not, until the writ is discharged or the proceedings are concluded—
 (a)allow the detained person to be moved to another place of detention in Hong Kong otherwise than under the authority of the Prisons Ordinance (Cap. 234) or of any other enactment expressly providing for the detention of persons; or
 (b)allow the detained person to be removed from Hong Kong.
 (12)If a person who was formerly held in detention on a particular ground is released because of the issue of a writ of habeas corpus, or in accordance with an order made under subsection (10), a person may redetain that person on the same or a similar ground only if there has been a material change in the relevant circumstances.
 (13)A person who—
 (a)fails to comply with a writ of habeas corpus or with a requirement of this section; or
 (b)contravenes subsection (12),
 is guilty of contempt of the Court of First Instance.
 (14)The right to obtain a writ of habeas corpus under the common law is preserved and is affected by this section only in so far as it is inconsistent with this section.
 (15)For the purposes of this section—
 (a)a person has custody of another person not only when the person has actual custody over the body of that other person but also when the person has power or control over that other person’s body; and
 (b)in relation to an application made on behalf of a person, a reference to an applicant includes a reference to that person.
 (Added 95 of 1997 s. 3. Amended 25 of 1998 s. 2)
 23.Restriction on repeated applications for habeas corpus
 (1)Notwithstanding anything in any law or rule of court, where an application for habeas corpus has been made by or in respect of any person, no such application shall again be made to the Court of First Instance or any judge thereof by or in respect of that person on the same grounds, unless fresh evidence is adduced in support of the application. (Amended 95 of 1997 s. 4; 25 of 1998 s. 2)
 (2)(Repealed 95 of 1997 s. 4)
 [cf. 1960 c. 65 s. 14 U.K.]
 24.Appeal in habeas corpus proceedings
 An appeal shall lie as of right to the Court of Appeal from any decision of the Court of First Instance on an application for habeas corpus, whether the Court of First Instance orders the release of the person detained or refuses to make such an order.
 (Amended 95 of 1997 s. 5; 25 of 1998 s. 2)
 [cf. 1960 c. 65 s. 15 U.K.]
 25.Power of Court of First Instance to vary sentence on certiorari
 (1)Where a person who has been sentenced for an offence by a magistrate or the District Court applies to the Court of First Instance for an order of certiorari to remove the proceedings before the magistrate or the District Court into the Court of First Instance, and the Court of First Instance determines that the magistrate or the District Court had no power to pass the sentence, the Court of First Instance may, instead of quashing the conviction, amend it by substituting for the sentence passed any sentence which the magistrate or the District Court had power to impose.
 (2)Any sentence passed by the Court of First Instance by virtue of this section in substitution for the sentence passed by a magistrate or the District Court shall, unless the Court of First Instance otherwise directs, begin to run from the time when it would have begun to run if passed by the magistrate or the District Court.
 (3)This section shall apply, with the necessary modifications, in relation to any order of a magistrate or the District Court which is made on, but does not form part of, the conviction of an offender as it applies in relation to a conviction and sentence.
 (Amended 25 of 1998 s. 2)
 [cf. 1960 c. 65 s. 16 U.K.]
 25A.Execution of instruments by order of Court of First Instance
 (1)Where the Court of First Instance has given or made a judgment or order directing a person to execute any conveyance, contract or other document, or to endorse any negotiable instrument, then, if that person—
 (a)neglects or refuses to comply with the judgment or order; or
 (b)cannot after reasonable inquiry be found,
 the Court of First Instance may, on such terms and conditions, if any, as may be just, order that the conveyance, contract or other document shall be executed, or that the negotiable instrument shall be endorsed, by such person as the Court may nominate for that purpose.
 (2)A conveyance, contract, document or instrument executed or endorsed in accordance with subsection (1) shall have the same effect as if it had been executed or endorsed by the person originally directed to execute or endorse it.
 (3)Nothing herein shall be held to abridge the powers of the Court of First Instance to proceed by attachment against any person neglecting or refusing to execute or endorse any such instrument.
 (Added 52 of 1987 s. 20. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 39 U.K.]
 26.Wards of court
 (1)Subject to the provisions of this section, no infant shall be made a ward of court except by virtue of an order to that effect made by the Court of First Instance.
 (2)Where application is made for such an order in respect of an infant, the infant shall become a ward of court on the making of the application, but shall cease to be a ward of court at the expiration of such period as may be prescribed by rules of court unless within that period an order has been made in accordance with the application.
 (3)The Court of First Instance may, either upon an application in that behalf or without such an application, order that any infant who is for the time being a ward of court shall cease to be a ward of court.
 (Amended 25 of 1998 s. 2)
 [cf. 1949 c. 100 s. 9 U.K.]
 27.Restriction of vexatious legal proceedings
 (1)The Court of First Instance may, on the application of the Secretary for Justice or an affected person, make an order that—
 (a)no legal proceedings shall without the leave of the Court of First Instance be instituted by the person against whom the order is made; and
 (b)any legal proceedings instituted by that person in any court before the making of the order shall not be continued by him without the leave of the Court of First Instance.
 (2)The Court of First Instance may not make an order under subsection (1) unless—
 (a)it is satisfied that the person against whom the order is to be made has habitually and persistently and without any reasonable ground instituted vexatious legal proceedings, whether in the High Court or in any inferior court, and whether against the same person or against different persons; and
 (b)it has heard the person against whom the order is to be made or given him an opportunity of being heard.
 (3)An order made under subsection (1)—
 (a)may be made on such terms and conditions as the Court of First Instance thinks just; and
 (b)may provide that it is to cease to have effect at the end of a specified period, but shall otherwise remain in force indefinitely.
 (4)A copy of an order made under subsection (1) shall be published in the Gazette.
 (5)
 In subsection (1), affected person (受影響的人) means a person who—
 (a)is or has been a party to any of the vexatious legal proceedings; or
 (b)has directly suffered adverse consequences resulting from such proceedings.
 (Replaced 3 of 2008 s. 13)
 27A.Leave to institute or continue proceedings
 (1)Leave for the institution or continuance of any legal proceedings by a person who is the subject of an order for the time being in force under section 27(1) shall not be given unless the Court of First Instance is satisfied that—
 (a)the proceedings are not an abuse of the process of the court in question; and
 (b)there are reasonable grounds for the proceedings.
 (2)No appeal lies from a decision of the Court of First Instance granting or refusing leave required under this section, unless leave to appeal has been granted by the Court of First Instance.
 (Added 3 of 2008 s. 13)
 Part IV
 Sittings and Distribution of Business
 28.Sittings of High Court and distribution of business
 (1)The High Court shall sit at such times and at such places as the Chief Justice shall appoint.
 (2)The distribution of business of the High Court shall be made in accordance with directions given by the Chief Justice.
 (Amended 25 of 1998 s. 2)
 29.Vacations
 (1)The following vacations shall be observed in each year in the High Court and the Registries—  (Amended 25 of 1998 s. 2)
 (a)the Summer vacation; (Amended 52 of 1987 s. 22)
 (b)the Christmas vacation; and
 (c)the Easter vacation.
 (2)The dates of the vacations referred to in subsection (1) shall be prescribed by rules of court.
 (3)The days of the commencement and termination of each vacation shall be included in such vacation.
 30.Business in vacations
 (1)The High Court and the Registries shall be open during any vacation for the purpose of— (Amended 25 of 1998 s. 2; 18 of 2016 s. 4)
 (a)holding criminal trials and determining criminal appeals and the transaction of all business incidental thereto; and
 (b)the transaction of such other business as may be prescribed by rules of court. (Replaced 49 of 1983 s. 6)
 (2)-(3)(Repealed 49 of 1983 s. 6)
 (4)However, subsection (1) does not require the High Court or the Registries to be open on Saturdays, general holidays, or other days as directed by the Registrar or the Chief Justice. (Added 18 of 2016 s. 4)
 (5)In subsection (4)—
 Registrar (司法常務官) includes a Senior Deputy Registrar, Deputy Registrar, or Assistant Registrar, of the High Court. (Added 18 of 2016 s. 4)
 31.Computation of vacation period and validity of acts therein
 (1)
 Where by any law regulating civil procedure, or by any special order of the High Court, any period not exceeding one month is appointed or allowed for the doing of any act or the taking of any proceeding, no days included in the Summer vacation shall be reckoned in the computation of such time, unless the Court otherwise directs: (Amended 52 of 1987 s. 23; 25 of 1998 s. 2)
 Provided that nothing in this section shall be deemed to extend the time for entering appearance to any writ endorsed with a statement of claim. (Amended 79 of 1979 s. 2)
 (2)Every act, matter or thing done during any vacation shall be as valid to all intents and purposes as if done out of vacation.
 32.Proceedings in Court of First Instance to be disposed of by single judge
 (1)Subject to sections 41 and 42 of the Criminal Procedure Ordinance (Cap. 221), to subsection (3) of this section and to rules of court, every proceeding in the Court of First Instance and all business arising therefrom shall be heard and determined by a judge of the Court of First Instance sitting alone.
 (2)The proceedings in every action or matter subsequent to the trial or hearing, down to and including the final judgment or order, and any application for leave to appeal or for a stay of execution shall, so far as is practicable and convenient, be taken before the judge of the Court of First Instance before whom the trial or hearing took place.
 (3)The Chief Justice may direct that any proceeding, or class of proceeding, in the Court of First Instance shall be heard and determined by 2 or more judges of the Court.
 (Amended 25 of 1998 s. 2)
 32A.Proceedings in court and in chambers
 Business in the Court of First Instance shall be heard and disposed of in court except insofar as it may, under this or any other enactment or in accordance with the practice of the Court, be dealt with in chambers.
 (Added 52 of 1987 s. 24. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 67 U.K.]
 33.Powers of judge in chambers
 (1)A judge of the Court of First Instance may, subject to rules of court, exercise in chambers all or any part of the jurisdiction vested in the Court of First Instance, in all such causes and matters and in all such proceedings in any causes or matters as may be heard in chambers by a judge of the High Court in England or as may be directed or authorized to be so heard by rules of court.
 (2)A judge of the Court of First Instance sitting in court shall be deemed to constitute a court of the Court of First Instance.
 (Amended 25 of 1998 s. 2)
 [cf. 1925 c. 49 s. 61 U.K.]
 33A.Trial by jury in the Court of First Instance
 (1)Where, on the application of any party to an action the Court of First Instance is satisfied that there is in issue—
 (a)a claim in respect of libel, slander, malicious prosecution, false imprisonment or seduction; or
 (b)any question or issue of a kind prescribed for the purposes of this paragraph by rules of court,
 the action shall be tried with a jury, unless the Court is of the opinion that the trial requires any prolonged examination of documents or accounts or any scientific or local investigation which cannot conveniently be made with a jury.
 (2)An application under subsection (1) must be made not later than such time before the trial as may be prescribed by rules of court.
 (3)An action to be tried in the Court of First Instance which does not by virtue of subsection (1) fall to be tried with a jury shall be tried without a jury unless the Court in its discretion orders it to be tried with a jury.
 (4)Nothing in subsections (1) to (3) shall affect the power of the Court to order, in accordance with rules of court, that different questions of fact arising in any action be tried by different modes of trial; and where any such order is made, subsection (1) shall have effect only as respects questions relating to any such claim, question or issue as is mentioned in that subsection.
 (5)Where for the purpose of disposing of any action or other matter which is being tried in the Court of First Instance by a judge with a jury it is necessary to ascertain the law of any other place which is applicable to the facts of the case, any question as to the effect of the evidence given with respect to that law shall, instead of being submitted to the jury, be decided by the judge alone.
 (Added 52 of 1987 s. 25. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 69 U.K.]
 34.Sittings of Court of Appeal
 (1)This section relates to the Court of Appeal in the exercise of its criminal jurisdiction; and in this section Court (法庭) means the Court of Appeal exercising such jurisdiction. (Replaced 52 of 1987 s. 26)
 (2)The Court shall be duly constituted for the purpose of determining any appeal—
 (a)by way of application for a new trial or to set aside a verdict, finding or judgment in any cause or matter in the Court of First Instance in which there has been a trial thereof or of any issue therein with a jury; or (Amended 25 of 1998 s. 2)
 (b)under Part IV of the Criminal Procedure Ordinance (Cap. 221),
 if it consists of an uneven number of Justices of Appeal not less than 3. (Replaced 52 of 1987 s. 26)
 (2A)The Court shall be duly constituted for the purpose of determining an appeal against sentence only under sections 83G and 83H of the Criminal Procedure Ordinance (Cap. 221) if it consists of 2 Justices of Appeal. (Added 52 of 1987 s. 26)
 (3)No judge shall sit as a member of the Court of Appeal on the hearing of, or shall determine any application in proceedings incidental or preliminary to—
 (a)an appeal from a judgment or order made by him; or
 (b)an appeal against a conviction before him or a sentence passed by him.
 (4)Subject to subsection (6), where a Court of Appeal consisting of 3 or more Justices of Appeal sits, the judgment or order which is that of the majority of the Justices of Appeal sitting shall be deemed to be the judgment or order of the Court of Appeal, but if there is no judgment or order which is that of a majority of the Justices of Appeal sitting, the judgment or order appealed from shall be deemed to be the judgment or order of the Court of Appeal.
 (5)
 Where a Court of Appeal consisting of 2 Justices of Appeal only sits and the 2 Justices of Appeal differ, then the judgment or order appealed from shall be disturbed only in so far as it may be modified or affected by any order they make as to which they do not differ:
 Provided that—
 (a)if the judgment or order appealed from is not so modified or affected, it shall be deemed to be the judgment or order of the Court of Appeal; or
 (b)if the judgment or order appealed from is so modified or affected, it shall, as so modified or affected, be deemed to be the judgment or order of the Court of Appeal.
 (6)In the case of an appeal under Part IV of the Criminal Procedure Ordinance (Cap. 221), if no 2 of the Justices of Appeal agree as to the judgment or order to be made—
 (a)the judgment or order of the trial judge; or
 (b)where there is no such judgment or order, the judgment or order of the President,
 shall be deemed to be the judgment of the Court of Appeal.
 (7)For the purposes of this section and section 34A, an appeal under Part IV of the Criminal Procedure Ordinance (Cap. 221) includes the consideration of a question of law reserved for the consideration of the Court of Appeal, the consideration of an application by the Secretary for Justice for the review of any sentence, and the consideration of a reference by the Secretary for Justice of a question of law, under sections 81, 81A and 81D respectively of that Ordinance. (Amended 20 of 1979 s. 10; L.N. 362 of 1997)
 (Amended 52 of 1987 s. 26)
 34A.Powers of single Justice of Appeal in Court of Appeal in its criminal jurisdiction
 (1)Subject to subsection (2), in pursuance of the criminal jurisdiction of the Court of Appeal, any power of the Court of Appeal not involving the determination of the appeal may be exercised by a single Justice of Appeal in the same manner as it may be exercised by the Court of Appeal and subject to the same provisions.
 (2)Where a single Justice of Appeal refuses an application to exercise any power of the Court of Appeal in pursuance of subsection (1), the applicant shall be entitled to have the application determined by the Court of Appeal.
 (Added 52 of 1987 s. 27)
 34B.Composition of Court of Appeal in its civil jurisdiction
 (1)This section relates to the Court of Appeal in the exercise of its civil jurisdiction; and in this section Court (法庭) means the Court of Appeal exercising such jurisdiction.
 (2)The Court shall be duly constituted for the purpose of exercising any of its jurisdiction if it consists of an uneven number of Justices of Appeal not less than 3.
 (3)Where—
 (a)part of any proceedings before the Court has been heard by an uneven number of Justices of Appeal greater than 3; and
 (b)one or more members of the Court is or are unable to continue,
 the Court shall remain duly constituted for the purpose of those proceedings so long as the number of members (whether even or uneven) is not reduced to less than 3.
 (4)The Court shall, if it consists of 2 Justices of Appeal, be duly constituted for the purpose of—
 (a)hearing or determining any appeal against an interlocutory order or interlocutory judgment;
 (aa)hearing or determining any application for leave to appeal (except an application for leave to appeal to the Court of Final Appeal against a decision made by the Court consisting of 3 or more Justices of Appeal); (Added 3 of 2008 s. 26. Amended 21 of 2020 s. 6)
 (ab)hearing or determining any interlocutory application in relation to a cause or matter pending before it; (Added 3 of 2008 s. 30)
 (ac)hearing or determining any appeal made under Order 53, rule 3(4) of the Rules of the High Court (Cap. 4 sub. leg. A) (O.53 r.3(4) appeal); (Added 21 of 2020 s. 6)
 (b)hearing or determining any appeal against a decision of a single Justice of Appeal acting by virtue of section 35(1);
 (c)hearing or determining any appeal where all the parties have before the hearing filed a consent to the appeal being heard and determined by 2 Justices of Appeal;
 (d)hearing the remainder of, and determining, any appeal where part of it has been heard by 3 or more Justices of Appeal of whom one or more are unable to continue and all the parties have consented to the remainder of the appeal being heard, and the appeal being determined, by 2 remaining Justices of Appeal; or
 (e)hearing or determining an appeal of any such description or in any such circumstances not covered by paragraphs (a) to (d) as may be prescribed for the purposes of this subsection by an order made by the Chief Justice. (Amended 3 of 2008 s. 26)
 (4A)Despite subsection (4)(aa), if an application for leave to appeal to the Court of Final Appeal against a decision made by the Court consisting of less than 3 Justices of Appeal was duly filed before the commencement date, the Court consisting of 2 Justices of Appeal is not duly constituted for the purpose of hearing or determining the application. (Added 21 of 2020 s. 6)
 (4B)Despite subsection (4)(ac), if an O.53 r.3(4) appeal (except one falling within subsection (4)(c)) was duly filed before the commencement date, the Court consisting of 2 Justices of Appeal is not duly constituted for the purpose of hearing or determining the appeal. (Added 21 of 2020 s. 6)
 (4C)In subsections (4A) and (4B)—
 *commencement date (生效日期) means the date on which Part 2 of the Statute Law (Miscellaneous Provisions) Ordinance 2020 (21 of 2020) comes into operation. (Added 21 of 2020 s. 6)
 (5)Where—
 (a)the Court as duly constituted under subsection (3) or (4) hears an appeal or application; and (Replaced 21 of 2020 s. 6)
 (b)the members of the Court are equally divided,
 the case shall, on the application of any party or by order of the Court made of its motion, be re-argued before and determined by an uneven number of Justices of Appeal not less than 3, before any appeal to the Court of Final Appeal under this Ordinance or any other enactment.  (Amended 79 of 1995 s. 50; 21 of 2020 s. 6)
 (6)In any cause or matter pending before the Court a single Justice of Appeal may at any time during any vacation make an interim order to prevent prejudice to the claims of any parties pending an appeal.
 (7)Section 53 shall apply in relation to causes and matters before the Court as it applies in relation to causes and matters before the Court of First Instance.
 (Added 52 of 1987 s. 27. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 54 U.K.]
 Editorial Note:
 * Commencement date: 18 January 2021.
 35.Powers of single judge in Court of Appeal
 (1)Subject to subsection (3), in pursuance of the civil jurisdiction of the Court of Appeal, any order or direction not involving the determination of an appeal to the Court of Appeal (including an order or direction giving leave to appeal to the Court of Appeal) may be made or given by a single judge sitting in court or in chambers, and a single judge may likewise make any interim order which he may think fit to prevent prejudice to the claims of any party pending an appeal. (Amended 3 of 2008 s. 27)
 (2)(Repealed 52 of 1987 s. 28)
 (3)Every order or direction made or given by a single judge under subsection (1) may be discharged or varied by the Court of Appeal.
 (4)(Repealed 52 of 1987 s. 28)
 36.Acts required to be done by Chief Justice may also be done by any judge
 Where by or under any law any judicial or other act is required or authorized to be exercised or performed by the Chief Justice or by the Chief Judge of the High Court, such act other than an act in the performance of or relating to the performance of a function under the Hong Kong Court of Final Appeal Ordinance (Cap. 484) may be exercised or performed by any judge of the High Court.
 (Amended 79 of 1995 s. 50; 25 of 1998 s. 2)
 Part V
 Registrar and Other Officers
 37.Registrar of High Court
 (1)There shall be attached to the High Court a Registrar and such senior deputy registrars, deputy registrars and assistant registrars as may be appointed. (Amended 25 of 1998 s. 2)
 (2)The senior deputy registrars, deputy registrars and assistant registrars may be called Masters. (Added 52 of 1987 s. 29)
 (Amended 10 of 2005 s. 133)
 37AA.Professional qualifications of Registrar, senior deputy registrars, deputy registrars and assistant registrars
 (1)A person shall be eligible to be appointed as the Registrar if—
 (a)he is qualified to practise as a barrister, solicitor or advocate in a court in Hong Kong or any other common law jurisdiction having unlimited jurisdiction either in civil or criminal matters; and
 (b)since becoming so qualified, he has for a period of or periods totalling not less than 5 years—
 (i)practised as a barrister, solicitor or advocate in such a court;
 (ii)been a senior deputy registrar, deputy registrar or assistant registrar appointed in accordance with section 37;
 (iii)been a District Judge appointed in accordance with section 4 or 7 of the District Court Ordinance (Cap. 336);
 (iv)been the Registrar of the District Court or a deputy registrar or assistant registrar of the District Court, appointed in accordance with section 14 of the District Court Ordinance (Cap. 336);
 (v)been a permanent magistrate appointed in accordance with section 5 of the Magistrates Ordinance (Cap. 227);
 (vi)been a coroner appointed in accordance with section 3 of the Coroners Ordinance (Cap. 504);
 (vii)been an adjudicator appointed in accordance with section 4 of the Small Claims Tribunal Ordinance (Cap. 338);
 (viii)been a presiding officer appointed in accordance with section 4 of the Labour Tribunal Ordinance (Cap. 25);
 (ix)been a legal officer as defined in section 2 of the Legal Officers Ordinance (Cap. 87);
 (x)been the Director of Legal Aid or a Deputy Director of Legal Aid, Assistant Director of Legal Aid or Legal Aid Officer, appointed in accordance with section 3 of the Legal Aid Ordinance (Cap. 91);
 (xi)been the Official Receiver or an Assistant Official Receiver (Legal), Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 75 of the Bankruptcy Ordinance (Cap. 6); or
 (xii)been the Director of Intellectual Property or a Deputy Director of Intellectual Property, Assistant Director of Intellectual Property, Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 3 of the Director of Intellectual Property (Establishment) Ordinance (Cap. 412). (Amended 26 of 2012 s. 35)
 (2)A person shall be eligible to be appointed as a senior deputy registrar if—
 (a)he is qualified to practise as a barrister, solicitor or advocate in a court in Hong Kong or any other common law jurisdiction having unlimited jurisdiction either in civil or criminal matters; and
 (b)since becoming so qualified, he has for a period of or periods totalling not less than 5 years—
 (i)practised as a barrister, solicitor or advocate in such a court;
 (ii)been a deputy registrar or assistant registrar appointed in accordance with section 37;
 (iii)been a District Judge appointed in accordance with section 4 or 7 of the District Court Ordinance (Cap. 336);
 (iv)been the Registrar of the District Court or a deputy registrar or assistant registrar of the District Court, appointed in accordance with section 14 of the District Court Ordinance (Cap. 336);
 (v)been a permanent magistrate appointed in accordance with section 5 of the Magistrates Ordinance (Cap. 227);
 (vi)been a coroner appointed in accordance with section 3 of the Coroners Ordinance (Cap. 504);
 (vii)been an adjudicator appointed in accordance with section 4 of the Small Claims Tribunal Ordinance (Cap. 338);
 (viii)been a presiding officer appointed in accordance with section 4 of the Labour Tribunal Ordinance (Cap. 25);
 (ix)been a legal officer as defined in section 2 of the Legal Officers Ordinance (Cap. 87);
 (x)been the Director of Legal Aid or a Deputy Director of Legal Aid, Assistant Director of Legal Aid or Legal Aid Officer, appointed in accordance with section 3 of the Legal Aid Ordinance (Cap. 91);
 (xi)been the Official Receiver or an Assistant Official Receiver (Legal), Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 75 of the Bankruptcy Ordinance (Cap. 6); or
 (xii)been the Director of Intellectual Property or a Deputy Director of Intellectual Property, Assistant Director of Intellectual Property, Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 3 of the Director of Intellectual Property (Establishment) Ordinance (Cap. 412). (Amended 26 of 2012 s. 35)
 (3)A person shall be eligible to be appointed as a deputy registrar if—
 (a)he is qualified to practise as a barrister, solicitor or advocate in a court in Hong Kong or any other common law jurisdiction having unlimited jurisdiction either in civil or criminal matters; and
 (b)since becoming so qualified, he has for a period of or periods totalling not less than 5 years—
 (i)practised as a barrister, solicitor or advocate in such a court;
 (ii)been an assistant registrar appointed in accordance with section 37;
 (iii)been a District Judge appointed in accordance with section 4 or 7 of the District Court Ordinance (Cap. 336);
 (iv)been the Registrar of the District Court or a deputy registrar or assistant registrar of the District Court, appointed in accordance with section 14 of the District Court Ordinance (Cap. 336);
 (v)been a permanent magistrate appointed in accordance with section 5 of the Magistrates Ordinance (Cap. 227);
 (vi)been a coroner appointed in accordance with section 3 of the Coroners Ordinance (Cap. 504);
 (vii)been an adjudicator appointed in accordance with section 4 of the Small Claims Tribunal Ordinance (Cap. 338);
 (viii)been a presiding officer appointed in accordance with section 4 of the Labour Tribunal Ordinance (Cap. 25);
 (ix)been a legal officer as defined in section 2 of the Legal Officers Ordinance (Cap. 87);
 (x)been the Director of Legal Aid or a Deputy Director of Legal Aid, Assistant Director of Legal Aid or Legal Aid Officer, appointed in accordance with section 3 of the Legal Aid Ordinance (Cap. 91);
 (xi)been the Official Receiver or an Assistant Official Receiver (Legal), Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 75 of the Bankruptcy Ordinance (Cap. 6); or
 (xii)been the Director of Intellectual Property or a Deputy Director of Intellectual Property, Assistant Director of Intellectual Property, Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 3 of the Director of Intellectual Property (Establishment) Ordinance (Cap. 412). (Amended 26 of 2012 s. 35)
 (4)A person shall be eligible to be appointed as an assistant registrar if—
 (a)he is qualified to practise as a barrister, solicitor or advocate in a court in Hong Kong or any other common law jurisdiction having unlimited jurisdiction either in civil or criminal matters; and
 (b)since becoming so qualified, he has for a period of or periods totalling not less than 5 years—
 (i)practised as a barrister, solicitor or advocate in such a court;
 (ii)been a District Judge appointed in accordance with section 4 or 7 of the District Court Ordinance (Cap. 336);
 (iii)been the Registrar of the District Court or a deputy registrar or assistant registrar of the District Court, appointed in accordance with section 14 of the District Court Ordinance (Cap. 336);
 (iv)been a permanent magistrate appointed in accordance with section 5 of the Magistrates Ordinance (Cap. 227);
 (v)been a coroner appointed in accordance with section 3 of the Coroners Ordinance (Cap. 504);
 (vi)been an adjudicator appointed in accordance with section 4 of the Small Claims Tribunal Ordinance (Cap. 338);
 (vii)been a presiding officer appointed in accordance with section 4 of the Labour Tribunal Ordinance (Cap. 25);
 (viii)been a legal officer as defined in section 2 of the Legal Officers Ordinance (Cap. 87);
 (ix)been the Director of Legal Aid or a Deputy Director of Legal Aid, Assistant Director of Legal Aid or Legal Aid Officer, appointed in accordance with section 3 of the Legal Aid Ordinance (Cap. 91);
 (x)been the Official Receiver or an Assistant Official Receiver (Legal), Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 75 of the Bankruptcy Ordinance (Cap. 6); or
 (xi)been the Director of Intellectual Property or a Deputy Director of Intellectual Property, Assistant Director of Intellectual Property, Assistant Principal Solicitor, Senior Solicitor or Solicitor, appointed in accordance with section 3 of the Director of Intellectual Property (Establishment) Ordinance (Cap. 412). (Amended 26 of 2012 s. 35)
 (5)For the purposes of calculating the period of 5 years referred to in subsections (1)(b), (2)(b), (3)(b) and (4)(b)—
 (a)periods of less than 5 years falling within any of the subparagraphs of subsection (1)(b), (2)(b), (3)(b) or (4)(b), as the case may be, may be combined;
 (b)periods served in an office specified in Part I of the First Schedule to the repealed Registrar General (Establishment) Ordinance (Cap. 100) may be taken into account notwithstanding the repeal of that Ordinance.
 (Added 10 of 2005 s. 134)
 37AB.Appointment of temporary registrar
 (1)The Chief Justice may appoint a person who is eligible under section 37AA(1) to be appointed as the Registrar to be a temporary registrar if—
 (a)the office of the Registrar becomes vacant for any reason; or
 (b)he considers that the interest of the administration of justice requires that a temporary registrar should be appointed.
 (2)Without prejudice to the generality of the power conferred on him by subsection (1), the Chief Justice may appoint a temporary registrar for a specified period only.
 (2A)A temporary registrar has, during the period for which he or she is appointed, all the jurisdiction, privileges, powers and duties of the Registrar and a reference in any law to the Registrar is to be construed accordingly. (Added 17 of 2018 s. 6)
 (3)The Chief Justice may terminate the appointment of a temporary registrar at any time.
 (4)In this section and section 40A, temporary registrar (暫委司法常務官) means a person appointed under subsection (1) to be a temporary registrar.
 (Added 10 of 2005 s. 134)
 37AC.Appointment of temporary senior deputy registrars
 (1)The Chief Justice may appoint a person who is eligible under section 37AA(2) to be appointed as a senior deputy registrar to be a temporary senior deputy registrar if—
 (a)the office of any senior deputy registrar becomes vacant for any reason; or
 (b)he considers that the interest of the administration of justice requires that a temporary senior deputy registrar should be appointed.
 (2)Without prejudice to the generality of the power conferred on him by subsection (1), the Chief Justice may appoint a temporary senior deputy registrar for a specified period only.
 (2A)A temporary senior deputy registrar has, during the period for which he or she is appointed, all the jurisdiction, privileges, powers and duties of a senior deputy registrar and a reference in any law to a senior deputy registrar of the High Court is to be construed accordingly. (Added 17 of 2018 s. 7)
 (3)The Chief Justice may terminate the appointment of a temporary senior deputy registrar at any time.
 (4)A temporary senior deputy registrar may be called Master.
 (5)In this section and section 40A, temporary senior deputy registrar (暫委高級副司法常務官) means a person appointed under subsection (1) to be a temporary senior deputy registrar.
 (Added 10 of 2005 s. 134)
 37A.Appointment of temporary deputy registrars
 (1)The Chief Justice may appoint a person who is eligible under section 37AA(3) to be appointed as a deputy registrar to be a temporary deputy registrar if—  (Amended 10 of 2005 s. 135)
 (a)the office of any deputy registrar becomes vacant for any reason; or
 (b)he considers that the interest of the administration of justice requires that a temporary deputy registrar should be appointed.
 (2)Without prejudice to the generality of the power conferred on him by subsection (1), the Chief Justice may appoint a temporary deputy registrar for a specified period only.
 (2A)A temporary deputy registrar has, during the period for which he or she is appointed, all the jurisdiction, privileges, powers and duties of a deputy registrar and a reference in any law to a deputy registrar of the High Court is to be construed accordingly. (Added 17 of 2018 s. 8)
 (3)The Chief Justice may terminate the appointment of a temporary deputy registrar at any time.
 (4)A temporary deputy registrar may be called Master.
 (5)In this section and section 40A, temporary deputy registrar (暫委副司法常務官) means a person appointed under subsection (1) to be a temporary deputy registrar.
 (Added 1 of 1997 s. 5)
 37B.Appointment of temporary assistant registrars
 (1)The Chief Justice may appoint a person who is eligible under section 37AA(4) to be appointed as an assistant registrar to be a temporary assistant registrar if—  (Amended 10 of 2005 s. 136)
 (a)the office of any assistant registrar becomes vacant for any reason; or
 (b)he considers that the interest of the administration of justice requires that a temporary assistant registrar should be appointed.
 (2)Without prejudice to the generality of the power conferred on him by subsection (1), the Chief Justice may appoint a temporary assistant registrar for a specified period only.
 (2A)A temporary assistant registrar has, during the period for which he or she is appointed, all the jurisdiction, privileges, powers and duties of an assistant registrar and a reference in any law to an assistant registrar of the High Court is to be construed accordingly. (Added 17 of 2018 s. 9)
 (3)The Chief Justice may terminate the appointment of a temporary assistant registrar at any time.
 (4)A temporary assistant registrar may be called Master.
 (5)In this section and section 40A, temporary assistant registrar (暫委助理司法常務官) means a person appointed under subsection (1) to be a temporary assistant registrar.
 (Added 1 of 1997 s. 5)
 38.Jurisdiction, powers and duties of Registrar
 (1)The Registrar shall have and may exercise and perform—
 (a)the same jurisdiction, powers and duties as the Masters, Registrars and like officers of the Supreme Court of England and Wales; and
 (b)such other jurisdiction, powers and duties as may be conferred or imposed on him by or under rules of court or any other law.
 (2)Subject to rules of court, all the jurisdiction, powers and duties conferred or imposed on the Registrar may be had, exercised or performed by a Master.
 (Amended 52 of 1987 s. 30)
 38A.Bailiff
 There shall be a bailiff of the High Court together with such assistant bailiffs as may be appointed, to effect, in accordance with rules of court, orders for committal and for service and execution of the process of the Court.
 (Added 52 of 1987 s. 31. Amended 25 of 1998 s. 2)
 39.Protection of Registrar
 (1)No action shall be brought against the Registrar for—
 (a)any act done or omitted to be done by any bailiff without directions from the Registrar; or
 (b)any direction given to any bailiff with regard to the execution or non-execution of process if—
 (i)such directions are in accordance with an order from the Court of First Instance under section 40; and (Amended 25 of 1998 s. 2)
 (ii)no material fact is wilfully misrepresented or suppressed by the Registrar.
 (2)In this section—
 Registrar (司法常務官) includes a Master. (Amended 52 of 1987 s. 32)
 40.Registrar may apply for order
 The Registrar may, in case of doubt or difficulty, apply summarily to the Court of First Instance for an order for the direction and guidance of a bailiff, and the Court of First Instance may make such order in the matter as may seem just and reasonable.
 (Amended 25 of 1998 s. 2)
 40A.Powers of temporary registrars, etc. in case which is part-heard on termination of appointment
 (1)If the hearing of any proceedings before a temporary registrar is adjourned or he reserves judgment in any proceedings, the temporary registrar shall have power to resume the hearing and determine the proceedings or deliver judgment, notwithstanding that his appointment as a temporary registrar has expired or has been terminated.
 (2)Subsection (1) shall apply to a temporary senior deputy registrar, temporary deputy registrar or temporary assistant registrar as it applies to a temporary registrar.
 (Added 1 of 1997 s. 6. Amended 10 of 2005 s. 137)
 Part VI
 Discovery and Related Procedures
 41.Power of Court of First Instance to order disclosure, etc. of documents before commencement of proceedings
 (1)On the application, in accordance with rules of court, of a person who appears to the Court of First Instance to be likely to be a party to subsequent proceedings in that Court in which a claim is likely to be made, the Court of First Instance shall, in such circumstances as may be specified in the rules, have power to order a person who appears to the Court of First Instance to be likely to be a party to the proceedings and to be likely to have or to have had in his possession, custody or power any documents which are directly relevant to an issue arising or likely to arise out of that claim—  (Amended 25 of 1998 s. 2; 3 of 2008 s. 14)
 (a)to disclose whether those documents are in his possession, custody or power; and
 (b)to produce such of those documents as are in his possession, custody or power to the applicant or, on such conditions as may be specified in the order—
 (i)to the applicant’s legal advisers;
 (ii)to the applicant’s legal advisers and any medical or other professional adviser of the applicant; or
 (iii)if the applicant has no legal adviser, to any medical or other professional adviser of the applicant. (Replaced 52 of 1987 s. 33) [cf. 1981 c. 54 s. 33 U.K.]
 (2)For the purposes of subsection (1), a document is only to be regarded as directly relevant to an issue arising or likely to arise out of a claim in the anticipated proceedings if—
 (a)the document would be likely to be relied on in evidence by any party in the proceedings; or
 (b)the document supports or adversely affects any party’s case. (Added 3 of 2008 s. 14)
 [cf. 1970 c. 31 s. 31 U.K.]
 42.Extension of powers of Court of First Instance to order disclosure of documents, inspection of property, etc.
 (1)On the application, in accordance with rules of court, of a party to any proceedings in which a claim is made, the Court of First Instance shall, in such circumstances as may be specified in the rules, have power to order a person who is not a party to the proceedings and who appears to the Court of First Instance to be likely to have or to have had in his possession, custody or power any documents which are relevant to an issue arising out of that claim—  (Amended 3 of 2008 s. 17)
 (a)to disclose whether those documents are in his possession, custody or power; and
 (b)to produce such of those documents as are in his possession, custody or power to the applicant or, on such conditions as may be specified in the order—
 (i)to the applicant’s legal advisers;
 (ii)to the applicant’s legal advisers and any medical or other professional adviser of the applicant; or
 (iii)if the applicant has no legal adviser, to any medical or other professional adviser of the applicant. (Replaced 52 of 1987 s. 34) [cf. 1981 c. 54 s. 34 U.K.]
 (2)On the application, in accordance with rules of court, of a party to any such proceedings as are referred to in subsection (1), the Court of First Instance shall, in such circumstances as may be specified in the rules, have power to make an order providing for any one or more of the following matters—
 (a)the inspection, photographing, preservation, custody and detention of property which is not the property of, or in the possession of, any party to the proceedings but which is the subject matter of the proceedings or as to which any question arises in the proceedings;
 (b)the taking of samples of any such property as is mentioned in paragraph (a) and the carrying out of any experiment on or with any such property.
 (3)Subsections (1) and (2) are without prejudice to the exercise by the Court of First Instance of any power to make orders which is exercisable apart from those provisions.
 (4)In this section—
 property (財產) includes any land, chattel or other corporeal property of any description.
 (Amended 25 of 1998 s. 2)
 [cf. 1970 c. 31 s. 32 U.K.]
 43.Provisions supplementary to sections 41 and 42
 (1)The power to make rules of court under section 54 shall include power to make rules of court as to the circumstances in which an order under section 41 or 42 can be made; and any such rules may include such incidental, supplementary and consequential provisions as the Rules Committee may consider necessary or expedient.
 (2)Without prejudice to the generality of subsection (1), rules of court shall be made for the purpose of ensuring that the costs of and incidental to proceedings for an order under sections 41 and 42 incurred by the person against whom the order is sought shall be awarded to that person unless the Court of First Instance otherwise directs. (Amended 25 of 1998 s. 2)
 (3)(Repealed 3 of 2008 s. 18)
 [cf. 1970 c. 31 s. 33 U.K.]
 44.Powers of Court of First Instance exercisable before commencement of action
 (1)On the application of any person in accordance with rules of court, the Court of First Instance shall, in such circumstances as may be specified in the rules, have power to make an order providing for any one or more of the following matters—  (Amended 25 of 1998 s. 2)
 (a)the inspection, photographing, preservation, custody and detention of property which appears to the Court to be property which may become the subject matter of subsequent proceedings in the Court, or as to which any question may arise in any such proceedings; and
 (b)the taking of samples of any such property as is mentioned in paragraph (a) and the carrying out of any experiment on or with any such property.
 (2)The power to make rules of court shall include power to make rules of court as to the manner in which an application for such an order can be made, and as to the circumstances in which such an order can be made; and any such rules may include such incidental, supplementary and consequential provisions as the Rules Committee may consider necessary or expedient.
 (3)In this section—
 property (財產) includes any land, chattel or other corporeal property of any description.
 [cf. 1969 c. 58 s. 21 U.K.]
 44A.Withdrawal of privilege against incrimination of self or spouse in certain proceedings
 (1)In any proceedings to which this subsection applies a person shall not be excused, by reason that to do so may tend to expose that person, or the wife or husband of that person, to proceedings for a related offence or for the recovery of a related penalty—
 (a)from answering any question put to that person in the first mentioned proceedings; or
 (b)from complying with any order made in those proceedings.
 (2)Subsection (1) applies to the following civil proceedings in the Court of First Instance, namely—  (Amended 25 of 1998 s. 2)
 (a)proceedings for infringement of rights pertaining to any intellectual property or for passing off;
 (b)proceedings brought to obtain disclosure of information relating to any infringement of such rights or to any passing off; and
 (c)proceedings brought to prevent any apprehended infringement of such rights or any apprehended passing off.
 (3)Subject to subsection (4), no statement or admission made by a person on or after the commencement of the Supreme Court (Amendment) (No. 3) Ordinance 1982 (52 of 1982)—
 (a)in answering a question put to him in any proceedings to which subsection (1) applies; or
 (b)in complying with any order made in any such proceedings,
 shall, in proceedings for any related offence or for the recovery of any related penalty, be admissible in evidence against that person or (unless they married after the making of the statement or admission) against the wife or husband of that person.
 (4)Nothing in subsection (3) shall render any statement or admission made by a person as there mentioned inadmissible in evidence against that person in proceedings for perjury or contempt of court.
 (5)In this section—
 intellectual property (知識產權) means any patent, trade mark, copyright, registered design, technical or commercial information or other intellectual property;
 related offence (相關罪行), in relation to any proceedings to which subsection (1) applies, means—
 (a)in the case of proceedings within subsection (2)(a) or (b)—
 (i)any offence committed by or in the course of the infringement or passing off to which those proceedings relate; or
 (ii)any offence not within sub-paragraph (i) committed in connection with that infringement or passing off, being an offence involving fraud or dishonesty;
 (b)in the case of proceedings within subsection (2)(c), any offence revealed by the facts on which the plaintiff relies in those proceedings;
 related penalty (相關罰金), in relation to any proceedings to which subsection (1) applies, means—
 (a)in the case of proceedings within subsection (2)(a) or (b), any penalty incurred in respect of any thing done or omitted in connection with the infringement or passing off to which those proceedings relate;
 (b)in the case of proceedings within subsection (2)(c), any penalty incurred in respect of any act or omission revealed by the facts on which the plaintiff relies in those proceedings.
 (6)Any reference in this section to civil proceedings in the Court of First Instance of any description includes a reference to proceedings on appeal arising out of civil proceedings in the Court of First Instance of that description. (Amended 25 of 1998 s. 2)
 (Added 52 of 1982 s. 2)
 [cf. 1981 c. 54 s. 72 U.K.]
 45.Application to Government of sections 41 to 44
 (1)Section 44 shall bind the Government so far as it relates to property (within the meaning of that section) as to which it appears to the Court of First Instance that it may become the subject matters of subsequent proceedings. (Amended 3 of 2008 s. 19)
 (2)Sections 41, 42 and 43 shall bind the Government.
 (3)The Court of First Instance shall not make an order under section 41, 42 or 44 if it considers that compliance with the order, if made, would be likely to be injurious to the public interest.
 (Amended 25 of 1998 s. 2; 29 of 1998 s. 105)
 [cf. 1970 c. 31 s. 35 U.K.]
 Part VII
 Miscellaneous and Supplementary Provisions
 Writs
 (Replaced 52 of 1987 s. 35)
 46.Writs
 (1)All writs other than the writs listed in the Schedule are abolished.
 (2)The writs listed in the Schedule shall be issued according to the common law except to the extent that the common law is modified by any enactment.
 (Replaced 52 of 1987 s. 36)
 47.(Repealed 47 of 1997 s. 10)
 Interest
 48.Interest on claims for debt and damages
 (1)Subject to rules of court, in proceedings (whenever instituted) before the Court of First Instance for the recovery of a debt or damages there may be included in any sum for which judgment is given simple interest, at such rate as the Court thinks fit or as rules of court may provide, on all or any part of the debt or damages in respect of which judgment is given, or payment is made before judgment, for all or any part of the period between the date when the cause of action arose and—  (Amended 25 of 1998 s. 2)
 (a)in the case of any sum paid before judgment, the date of the payment; and
 (b)in the case of the sum for which judgment is given, the date of the judgment.
 (2)In relation to a judgment given for damages for personal injuries or death which exceed $30,000 subsection (1) shall have effect—
 (a)with the substitution of “shall be included” for “may be included”; and
 (b)with the addition of “unless the Court is satisfied that there are special reasons to the contrary” after “given”, where it first occurs.
 (3)Subject to rules of court, where—
 (a)there are proceedings (whenever instituted) before the Court of First Instance for the recovery of a debt; and (Amended 25 of 1998 s. 2)
 (b)the defendant pays the whole debt to the plaintiff (otherwise than in pursuance of a judgment in the proceedings),
 the defendant shall be liable to pay the plaintiff interest at such rate as the Court thinks fit or as rules of court may provide on all or any part of the debt for all or any part of the period between the date when the cause of action arose and the date of the payment.
 (4)Interest in respect of a debt shall not be awarded under this section for a period during which, for whatever reason, interest on the debt already runs.
 (5)Interest under this section may be calculated at different rates in respect of different periods.
 (6)For the avoidance of doubt it is declared that in determining, for the purposes of any enactment contained in Part 4 of the District Court Ordinance (Cap. 336), whether an amount exceeds, or is less than, a sum specified in that Part, no account shall be taken of any power exercisable by virtue of this section or of any order made in the exercise of such a power. 
 (7)Nothing in this section affects the damages recoverable for the dishonour of a bill of exchange.
 (8)In this section—
 defendant (被告人) means the person from whom the plaintiff seeks the debt or damages;
 personal injuries (人身傷害) includes any disease and any impairment of a person’s physical or mental condition; and
 plaintiff (原告人) means the person seeking the debt or damages.
 (Replaced 52 of 1987 s. 37. Amended E.R. 1 of 2013)
 [cf. 1981 c. 54 s. 35A U.K.]
 49.Interest on judgments
 (1)Judgment debts shall carry simple interest—
 (a)at such rate as the Court of First Instance may order; or (Amended 25 of 1998 s. 2)
 (b)in the absence of such order, at such rate as may be determined from time to time by the Chief Justice by order,
 on the aggregate amount thereof, or on such part thereof as for the time being remains unsatisfied from the date of the judgment until satisfaction.
 (2)Interest under this section may be calculated at different rates in respect of different periods.
 (Replaced 52 of 1987 s. 38)
 Contempt of Court
 50.Appeal in cases of contempt of court
 (1)Subject to this section, an appeal shall lie from any order or decision of a court, other than the Court of Appeal, in the exercise of jurisdiction to punish for contempt of court, including criminal contempt; and in relation to any such order or decision this section shall have effect in substitution for any other law relating to appeals in civil or criminal proceedings.
 (2)An appeal under this section shall lie to the Court of Appeal in any case at the instance of the person against whom the proceedings for contempt of court were brought or the order was made and, in the case of an application for committal or attachment, at the instance of the applicant.
 (3)The Court of Appeal may on appeal reverse or vary the order or decision of a court, and make such other order as may be just; and without prejudice to the powers of any court to grant bail, provision may be made by rules of court for authorizing the release on bail of an appellant under this section.
 (4)In this section—
 (a)court (法庭) includes any tribunal or person having power to punish for contempt; and
 (b)references to an order or decision of a court in the exercise of jurisdiction to punish for contempt of court include references to an order or decision of any court under any law enabling the court to deal with an offence as if it were contempt of court.
 (5)This section does not apply to a conviction or sentence in respect of which an appeal lies under the Criminal Procedure Ordinance (Cap. 221), or to a decision of the Court of Appeal under that Ordinance; and for the purposes of that Ordinance and of this subsection an order for the punishment of any person for contempt of court in proceedings in which he has a right of appeal against his sentence shall be treated as part of that sentence.
 [cf. 1960 c. 65 s. 13 U.K.]
 Seal, Expenses and Costs
 (Replaced 52 of 1987 s. 35)
 51.Seal of High Court
 (1)The High Court shall use such seal as the Chief Justice may direct. (Amended 25 of 1998 s. 2)
 (2)All writs, judgments, orders, documents and exemplifications or copies thereof, shall be sealed with such seal.
 (3)Any writ, judgment, order, document and any exemplification or copy thereof, shall, when purporting to be so sealed, be admitted in evidence in any criminal or civil proceedings before any court on its production without further proof.
 (Replaced 44 of 1982 s. 4)
 52.Expenses
 In any proceedings in the High Court, a judge may order the reimbursement of a witness in respect of any expenses reasonably and properly incurred by that witness.
 (Amended 25 of 1998 s. 2)
 52A.Costs in Court of First Instance and Court of Appeal in its civil jurisdiction
 (1)Subject to the provisions of rules of court, the costs of and incidental to all proceedings in the Court of Appeal in its civil jurisdiction and in the Court of First Instance, including the administration of estates and trusts, shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid. (Amended 25 of 1998 s. 2)
 (2)Without prejudice to the generality of subsection (1), the Court of Appeal or the Court of First Instance may, in accordance with rules of court, make an order awarding costs against a person who is not a party to the relevant proceedings, if the Court of Appeal or the Court of First Instance, as the case may be, is satisfied that it is in the interests of justice to do so. (Replaced 3 of 2008 s. 31)
 (3)Nothing in subsection (1) shall alter the practice in any criminal cause or matter, or in bankruptcy.
 (4)In any civil proceedings before it, the Court of Appeal or the Court of First Instance may, in accordance with rules of court, by order disallow, or order the legal representative concerned to meet, the whole or any part of any wasted costs. (Added 3 of 2008 s. 22)
 (5)When determining whether or not to make an order under subsection (4), the Court of Appeal or the Court of First instance shall, in addition to all other relevant circumstances, take into account the interest that there be fearless advocacy under the adversarial system of justice. (Added 3 of 2008 s. 22)
 (6)
 In subsection (4), wasted costs (虛耗訟費) means any costs incurred by a party as a result of—
 (a)an improper or unreasonable act or omission; or
 (b)any undue delay or other misconduct or default,
 on the part of any legal representative, whether personally or through an employee or agent of the legal representative. (Added 3 of 2008 s. 22)
 (7)In this section, legal representative (法律代表), in relation to a party to any proceedings, means a counsel or solicitor conducting litigation on behalf of the party. (Added 3 of 2008 s. 22)
 (Added 52 of 1987 s. 39)
 [cf. 1981 c. 54 s. 51 U.K.]
 52B.Costs-only proceedings
 (1)This section applies where—
 (a)the parties to a dispute have agreed on all the issues in dispute, including who is to pay the costs of and incidental to the dispute;
 (b)the agreement has been made or confirmed in writing;
 (c)no proceedings relating to the dispute have been commenced; and
 (d)the parties have failed to agree on the amount of the costs of and incidental to the dispute.
 (2)Subject to any other Ordinance, either party to the agreement may commence proceedings for an order for the costs of and incidental to the dispute, in accordance with rules of court.
 (3)In any proceedings commenced under subsection (2) or transferred to the Court of First Instance under section 53B of the District Court Ordinance (Cap. 336), the Court of First Instance may—
 (a)make an order for the costs of and incidental to the dispute to be taxed or assessed;
 (b)make an order awarding costs to or against any party to the proceedings; and
 (c)make an order awarding costs against a person who is not a party to the proceedings, if it is satisfied that it is in the interests of justice to do so.
 (4)A reference to costs in subsection (3)(b) and (c) is a reference to the costs of and incidental to the proceedings commenced under subsection (2) or transferred to the Court of First Instance under section 53B of the District Court Ordinance (Cap. 336).
 (5)In subsection (3), Court of First Instance (原訟法庭) includes the Registrar and a Master.
 (Added 3 of 2008 s. 3)
 52C.Transfer of costs-only proceedings to District Court
 (1)The Court of First Instance may, either of its own motion or on the application of any party, order the transfer of proceedings commenced under section 52B(2) to the District Court.
 (2)An order may be made under this section at any stage of the proceedings.
 (Added 3 of 2008 s. 3)
 52D.Scale of costs on which costs awarded under section 52A or 52B are taxed
 (1)Where the Court of Appeal or the Court of First Instance has made an award of costs under section 52A(1) or (2) or 52B(3), it may order that those costs be taxed in accordance with—
 (a)the First Schedule and the Second Schedule to Order 62 of the Rules of the High Court (Cap. 4 sub. leg. A); or
 (b)Schedule 1 and Schedule 2 to Order 62 of the Rules of the District Court (Cap. 336 sub. leg. H).
 (2)Where an award of costs under section 52B(3) is made by the Registrar or a Master, the power of the Court of First Instance under subsection (1) in relation to those costs may be exercised by the Registrar or that Master (as the case may be).
 (Added 3 of 2008 s. 3)
 Assessors
 53.Assessors
 (1)In any civil proceedings, the Court of First Instance may call to its aid one or more assessors specially qualified and may dispose of such proceedings, wholly or in part, with the aid of such assessor or assessors, but the decision of the judge shall be the decision of the Court of First Instance.
 (2)
 The Court of First Instance may determine the remuneration, if any, to be paid to an assessor in respect of his services:
 Provided that nothing in this subsection shall authorize the payment of remuneration to any person employed full time in any office of emolument under the Crown.
 (Amended 25 of 1998 s. 2)
 Rules
 54.Rules of court
 (1)The Rules Committee constituted under section 55 may make rules of court regulating and prescribing the procedure (including the method of pleading) and the practice to be followed in the High Court in all causes and matters whatsoever in or with respect to which the High Court has jurisdiction (including the procedure and practice to be followed in the Registries of the High Court) and any matters incidental to or relating to that procedure or practice. (Amended 25 of 1998 s. 2)
 (2)Without prejudice to the generality of subsection (1), rules of court may be made for the following purposes—
 (a)prescribing the procedure in connection with the transfer of proceedings between the Court of First Instance and the District Court, between the Court of First Instance and the Lands Tribunal, and between the Court of First Instance and the Competition Tribunal; (Amended 25 of 1998 s. 2; 3 of 2008 s. 44; 15 of 2014 s. 12)
 (b)prescribing the jurisdiction of the High Court which may be exercised by the Registrar or a Master (including provision for appeal against decisions in the exercise of such jurisdiction); (Amended 52 of 1987 s. 40; 25 of 1998 s. 2)
 (c)regulating matters relating to the fees and costs of proceedings (including proceedings in connection with the administration of estates and trusts) in the Court of Appeal in its civil jurisdiction and in the Court of First Instance; (Replaced 52 of 1987 s. 40. Amended 25 of 1998 s. 2)
 (d)(Repealed 52 of 1987 s. 40)
 (e)prescribing in what cases persons absent, but having an interest in a cause or matter, shall be bound by any order made therein;
 (f)prescribing in what cases and in what manner there may be submissions and references to special referees, how parties shall be bound thereby, and to what extent and with what consequences, and for the appointment, powers and duties of special referees and for proceedings before such special referees;
 (g)regulating the appointment and duties of commissioners for oaths, the revocation of such appointments, and matters incidental thereto;
 (h)regulating the execution of the process of the High Court, including—  (Amended 25 of 1998 s. 2)
 (i)the prohibition of judgment debtors and persons against whom civil claims are made from leaving Hong Kong and ordering the payment of compensation to them in prescribed circumstances;
 (ii)ordering the appearance of judgment debtors or officers of corporate judgment debtors for examination and their examination; and
 (iii)the arrest and imprisonment of judgment debtors; (Amended 1 of 1984 s. 3)
 (i)regulating matters which could heretofore be or which have heretofore been provided for or regulated by rules of court;
 (j)prescribing the procedure for the payment of money into the Court of First Instance by any party to arbitral proceedings; (Added 43 of 1982 s. 2. Amended 25 of 1998 s. 2; 17 of 2010 s. 112)
 (k)providing that, in any case where a document filed in, or in the custody of, any Registry is required to be produced to any court or tribunal (including an umpire or arbitrator) sitting elsewhere than at the High Court—  (Amended 25 of 1998 s. 2)
 (i)it shall not be necessary for any officer, whether served with a subpoena in that behalf or not, to attend for the purpose of producing the document; but
 (ii)the document may be produced to the court or tribunal by sending it to the court or tribunal, in the manner prescribed in the rules, together with a certificate, in the form so prescribed, to the effect that the document has been filed in, or is in the custody of, the Registry,
 and any such certificate shall be prima facie evidence of the facts stated in it; and (Added 52 of 1987 s. 40) [cf. 1981 c. 54 s. 136 U.K.]
 (l)prescribing the procedure in cases where an order of mandamus, prohibition or certiorari is sought, or proceedings are taken for an injunction under section 21J including a requirement that—
 (i)except in such cases as may be specified in the rules, leave shall be obtained before an application is made for any such order or before any such proceedings are commenced; and
 (ii)where leave is so obtained, no other relief shall be granted and no ground relied upon, except with the leave of the Court, other than the relief and grounds specified when the application for leave was made. (Added 52 of 1987 s. 40)
 (2A)Rules providing for the matters referred to in subsection (2)(k) may contain—
 (a)provisions for securing the safe custody and return to the Registry of any document sent to a court or tribunal in pursuance of the rules; and
 (b)such incidental and supplementary provisions as appear to the Rules Committee to be necessary or expedient. (Added 52 of 1987 s. 40) [cf. 1981 c. 54 s. 136 U.K.]
 (3)(Repealed 3 of 1989 s. 3)
 (4)The power to make rules of court under this section shall include power to make rules as to proceedings by or against the Crown.
 (5)Rules of court made under this section shall apply to all proceedings by or against the Crown insofar as they expressly purport so to do.
 55.Rules Committee
 (1)The rules of court shall be made by a Rules committee which shall consist of—
 (a)the Chief Judge of the High Court, who shall be chairman; (Amended 10 of 2005 s. 8)
 (b)2 judges of the High Court appointed by the Chief Judge of the High Court; (Replaced 52 of 1982 s. 3. Amended 52 of 1987 s. 41; 25 of 1998 s. 2; 10 of 2005 s. 8)
 (c)the Registrar or a Master appointed by the Chief Judge of the High Court to represent the Registrar; (Replaced 52 of 1982 s. 3. Amended 52 of 1987 s. 41; 10 of 2005 s. 8)
 (d)2 barristers nominated by the Hong Kong Bar Association;
 (e)2 solicitors nominated by The Law Society of Hong Kong;
 (f)the Secretary for Justice or a legal officer appointed by him. (Added 53 of 1980 s. 2. Amended L.N. 362 of 1997)
 (1A)The Registrar or such Master as the Chief Judge of the High Court may appoint under subsection (1)(c) shall be the secretary of the Rules Committee. (Added 52 of 1982 s. 3. Amended 52 of 1987 s. 41; 10 of 2005 s. 8)
 (2)5 members of the Rules Committee shall constitute a quorum if both a barrister and a solicitor are present.
 (3)(Repealed 52 of 1987 s. 41)
 55A.Rules concerning commencement of proceedings in respect of estates of deceased persons
 The power to make rules of court under section 54 shall include power by any such rules to make provision—
 (a)for enabling proceedings to be commenced in the Court of First Instance against the estate of a deceased person (whether by the appointment of a person to represent the estate or otherwise) where no grant of probate or administration has been made;
 (b)for enabling proceedings purporting to have been commenced in the Court of First Instance by or against a person to be treated, if he was dead at their commencement, as having been commenced by or against, as the case may be, his estate whether or not a grant of probate or administration was made before their commencement; and
 (c)for enabling any proceedings commenced or treated as commenced in the Court of First Instance by or against the estate of a deceased person to be maintained (whether by substitution of parties, amendment or otherwise) by or against, as the case may be, a person appointed to represent the estate or, if a grant of probate or administration is or has been made, by or against the personal representatives.
 (Added 52 of 1987 s. 42. Amended 25 of 1998 s. 2)
 [cf. 1981 c. 54 s. 87(2) U.K.]
 55B.Rules as to proof of facts and admission of statements in civil proceedings
 (1)The power to make rules of court under section 54 shall include power to make rules regulating the means by which particular facts may be proved, and the mode in which evidence thereof may be given in any proceedings in the Court of Appeal in its civil jurisdiction or in the Court of First Instance or on any application in connection with or at any stage of such proceedings. (Amended 25 of 1998 s. 2)
 (2)-(5)(Repealed 2 of 1999 s. 6)
 (6)In deciding for the purposes of any rules made by virtue of this section whether or not a person is fit to attend as a witness, the Court may act on a certificate purporting to be a certificate of a registered medical practitioner.
 (7)(Repealed 2 of 1999 s. 6)
 (8)Notwithstanding any enactment or rule of law by virtue of which documents prepared for the purpose of pending or contemplated civil proceedings or in connection with the obtaining or giving of legal advice are in certain circumstances privileged from disclosure, provision may be made by rules made by virtue of this section—
 (a)for enabling the Court in any civil proceedings to direct, with respect to medical matters or matters of any other class which may be specified in the direction, that the parties or some of them shall each by such date as may be so specified (or such later date as may be permitted or agreed in accordance with the rules) disclose to the other or others in the form of one or more expert reports the expert evidence on matters of that class which he proposes to adduce as part of his case at the trial; and
 (b)for prohibiting a party who fails to comply with a direction given in any such proceedings under rules made in pursuance of paragraph (a) from adducing in evidence by virtue of Part IV of the Evidence Ordinance (Cap. 8) except with the leave of the Court, any statement (whether of fact or opinion) contained in any expert report whatsoever in so far as that statement deals with matters of any class specified in the direction. (Amended 2 of 1999 s. 6)
 (9)Provision may be made by rules made by virtue of this section as to the conditions subject to which oral expert evidence may be given in civil proceedings.
 (10)Without prejudice to the generality of subsection (9) rules made in pursuance of that subsection may make provision for prohibiting a party who fails to comply with a direction given as mentioned in subsection (8)(b) from adducing, except with the leave of the Court, any oral expert evidence whatsoever with respect to matters of any class specified in the direction.
 (11)Any rules made by virtue of this section may make different provision for different classes of cases, for expert reports dealing with matters of different classes, and for other different circumstances.
 (12)In this section references to an expert report are references to a written report by a person dealing wholly or mainly with matters on which he is (or would if living be) qualified to give expert evidence.
 (Added 52 of 1987 s. 42)
 55C.Rules as to stop orders and notices
 (1)In this section—
 stop order (停止令) means an order of the Court of First Instance prohibiting the taking, in respect of any of the securities specified in the order, of any of the steps mentioned in subsection (4); (Amended 25 of 1998 s. 2)
 stop notice (停止通知書) means a notice requiring any person on whom it is duly served to refrain from taking, in respect of any of the securities specified in the notice, any of the steps mentioned in subsection (4) without first notifying the person by whom, or on whose behalf, the notice was served; and
 prescribed securities (訂明的保證物) means securities (including funds in court) of a kind prescribed by rules of court made by virtue of this section.
 (2)The power to make rules of court under section 54 shall include power by any such rules to make provision—
 (a)for the Court to make a stop order on the application of any person claiming to be entitled to an interest in prescribed securities; and
 (b)for the service of a stop notice by any person claiming to be entitled to an interest in prescribed securities.
 (3)Rules of court made by virtue of this section shall prescribe the person on whom a copy of any stop order or stop notice is to be served.
 (4)The steps mentioned in subsection (1) are—
 (a)the registration of any transfer of the securities;
 (b)in the case of funds in court, the transfer, sale, delivery out, payment or other dealing with the funds, or of the income thereon;
 (c)the making of any payment by way of dividend, interest or otherwise in respect of the securities; and
 (d)in the case of a unit trust, any acquisition of or other dealing with the units by any person or body exercising functions under the trust.
 (5)Any rules of court made by virtue of this section may include such incidental, supplemental and consequential provisions as the Rules Committee considers necessary or expedient, and may make different provision in relation to different cases or classes of case.
 (Added 52 of 1987 s. 42)
 [cf. 1979 c. 53 s. 5 U.K.]
 55D.Rules as to costs and interest
 (1)Notwithstanding sections 49 and 52A, the power to make rules of court under section 54 includes power to make provision for enabling the Registrar, in such circumstances as may be specified in the rules, to—
 (a)disallow all or part of any costs to be taxed pursuant to a costs order made by the Court of First Instance or the Court of Appeal;
 (b)disallow all or part of any interest otherwise payable under section 49 on taxed costs, or reduce the period for which such interest is payable or the rate prescribed in section 49 at which such interest is payable; and
 (c)increase the rate prescribed in section 49 at which interest on taxed costs or costs of taxation is payable.
 (2)Any rules made by virtue of this section may include such incidental, supplementary and consequential provisions as the Rules Committee may consider necessary or expedient.
 (Added 3 of 2008 s. 33)
 56.Orders for interim payment
 (1)The power to make rules of court under section 54 shall include power to make provision for enabling the High Court in such circumstances as may be specified to make an order requiring a party to pending proceedings to make an interim payment of such amount as may be specified in the order, either by payment into court or (if the order so provides) by paying it to another party to the proceedings. (Amended 25 of 1998 s. 2)
 (2)Where any such rules make provision in accordance with subsection (1), the rules may include provision for enabling a party to any proceedings who, in pursuance of such an order, has made an interim payment to recover the whole or part of the amount of the payment in such circumstances, and from such other party to the proceedings, as may be determined in accordance with the rules.
 (3)Any rules made by virtue of this section may include such incidental, supplementary and consequential provisions as the Rules Committee may consider necessary or expedient.
 (4)Nothing in this section shall be construed as affecting the exercise of any power relating to costs, including any power to make rules of court relating to costs.
 (5)In this section—
 (a)interim payment (中期付款), in relation to a party to any proceedings, means a payment on account of any damages, debt or other sum (excluding any costs) which that party may be held liable to pay to or for the benefit of another party to the proceedings if a final judgment or order of the Court in the proceedings is given or made in favour of that other party; and
 (b)any reference to a party to any proceedings includes a reference to any person who for the purposes of the proceedings acts as next friend or guardian of a party to the proceedings.
 (6)This section shall bind the Crown so far as any proceedings to which the section is applicable can be brought by or against the Crown in accordance with the Crown Proceedings Ordinance (Cap. 300).
 [cf. 1969 c. 58 s. 20 U.K.]
 56A.Orders for provisional damages for personal injuries
 (1)This section applies to an action for damages for personal injuries in which there is proved or admitted to be a chance that at some definite or indefinite time in the future the injured person will, as a result of the act or omission which gave rise to the cause of action, develop some serious disease or suffer some serious deterioration in his physical or mental condition.
 (2)Subject to subsection (4), as regards any action for damages to which this section applies in which a judgment is given in the Court of First Instance, provision may be made by rules of court for enabling the Court, in such circumstances as may be prescribed, to award the injured person—  (Amended 25 of 1998 s. 2)
 (a)damages assessed on the assumption that the injured person will not develop the disease or suffer the deterioration in his condition; and
 (b)further damages at a future date if he develops the disease or suffers the deterioration.
 (3)Any rules made by virtue of this section may include such incidental, supplementary and consequential provisions as the rule-making authority may consider necessary or expedient, and may provide for the injured person to elect whether or not to accept an award of damages assessed in accordance with such rules.
 (4)Nothing in this section shall be construed—
 (a)as affecting the exercise of any power relating to costs, including any power to make rules of court relating to costs; or
 (b)as prejudicing any duty of the Court under any enactment or rule of law to reduce or limit the total damages which would have been recoverable apart from any such duty.
 (Added 40 of 1986 s. 5)
 [cf. 1982 c. 53 s. 6 U.K.]
 57.Suitors’ Funds Rules
 (Replaced 20 of 2014 s. 23)
 (1)The Chief Judge of the High Court may make rules for regulating— (Amended 10 of 2005 s. 11)
 (a)the deposit, payment, delivery, and transfer in, into, and out of the High Court of money, securities, and movable property of suitors; (Amended 25 of 1998 s. 2)
 (b)the evidence of such deposit, payment, delivery, or transfer, and the investment of and other dealings with money, securities, and movable property in court;
 (c)the execution of the orders of the High Court; and (Amended 25 of 1998 s. 2)
 (d)the powers and duties of the Registrar with reference to such money, securities, and property.
 (2)Without prejudice to the generality of the foregoing, rules made under this section may provide for—
 (a)regulating the placing on and withdrawal from deposit of money in court, and the payment or crediting of interest on money placed on deposit;
 (b)determining the smallest amount of money on deposit on which interest is to be credited to an account to which money placed on deposit belongs;
 (c)determining the time at which money placed on deposit is to begin and to cease to bear interest and the mode of computing such interest;
 (d)determining the cases in which money placed on deposit is to begin and to cease to bear interest and the mode of computing such interest;
 (e)determining the cases in which interest on money placed on deposit and the dividends on any securities standing in the name of the Registrar is or are to be placed on deposit; and
 (f)disposing of money remaining unclaimed in court. (Amended 20 of 2014 s. 23)
 (3)In this section—
 securities (證券) includes shares;
 suitors (訴訟人) includes any party to arbitral proceedings who makes payment of money into the Court of First Instance in accordance with rules of court. (Replaced 20 of 2014 s. 23)
 Part VIII
 General
 58.(Had its effect)
 59.Amendment of references in laws to Full Court and High Court
 In any law, unless the context otherwise requires—
 (a)for any reference to the Full Court, there shall be substituted a reference to the Court of Appeal;
 (b)for any reference to the High Court, there shall be substituted a reference to the Court of First Instance; and
 (c)any reference to a judge or officer of the Full Court or the High Court shall be construed as a reference to a judge or officer of the Court of Appeal and the Court of First Instance, respectively.
 (Amended 25 of 1998 s. 2)
 60.(Omitted as spent—E.R. 2 of 2017)
 61.(Omitted as spent—E.R. 2 of 2017)
 62.(Omitted as spent—E.R. 2 of 2017)
 Schedule
 [s. 46]
 Writs
 (1)Writ of Summons
 (2)Writ of Subpoena
 (3)Writ of Fieri Facias
 (4)Writ of Possession
 (5)Writ of Delivery
 (6)Writ of Sequestration
 (7)Writ of Assistance
 (8)Writ of Restitution
 (9)Writ of Habeas Corpus ad subjiciendum
 (10)-(11)(Repealed 95 of 1997 s. 6)
 (Added 52 of 1987 s. 43)
diff --git a/cap571.txt b/cap571.txt
 An Ordinance to consolidate and amend the law relating to financial products, the securities and futures market and the securities and futures industry, the regulation of activities and other matters connected with financial products, the securities and futures market and the securities and futures industry, the protection of investors, and other matters incidental thereto or connected therewith, and for connected purposes.
 [1 April 2003] L.N. 12 of 2003
 (Enacting provision omitted—E.R. 2 of 2012)
 Part I
 Preliminary
 (Format changes—E.R. 2 of 2012)
 1.Short title
 (1)This Ordinance may be cited as the Securities and Futures Ordinance.
 (2)(Omitted as spent—E.R. 2 of 2012)
 2.Interpretation
 (1)Schedule 1 contains interpretation provisions which apply to this Ordinance in accordance with their terms.
 (2)Individual Parts and provisions of this Ordinance contain interpretation provisions which have application in accordance with their terms.
 (3)The Commission may, by notice published in the Gazette, amend Parts 2, 3, 4 and 5 of Schedule 1.
 Part II
 Securities and Futures Commission
 (Format changes—E.R. 2 of 2012)
 Division 1The Commission
 3.Securities and Futures Commission
 (1)Notwithstanding the repeal of the Securities and Futures Commission Ordinance (Cap. 24) under section 406, the body established by section 3 of that Ordinance as the Securities and Futures Commission shall continue in existence in its original name as a body corporate with power to sue and be sued in that name.
 (2)Subject to the provisions of this Ordinance, the corporate identity of the Commission, and the rights, privileges, powers, obligations and liabilities of the Commission and those of others in relation to the Commission, are not affected by the repeal of the Securities and Futures Commission Ordinance (Cap. 24) under section 406, and any reference to the Commission (whether by reference to that Ordinance or otherwise) in any Ordinance or any instrument, record or document, or in or for the purposes of any proceedings, agreement or arrangement (whether in writing or not) shall be construed accordingly.
 (3)The receipts of the Commission are not subject to taxation under the Inland Revenue Ordinance (Cap. 112).
 (4)Part 1 of Schedule 2 contains provisions relating to the constitution and proceedings of and other matters relating to the Commission.
 4.Regulatory objectives of Commission
 The regulatory objectives of the Commission are—
 (a)to maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry;
 (b)to promote understanding by the public of financial services including the operation and functioning of the securities and futures industry; (Replaced 9 of 2012 s. 30)
 (c)to provide protection for members of the public investing in or holding financial products;
 (d)to minimize crime and misconduct in the securities and futures industry;
 (e)to reduce systemic risks in the securities and futures industry; and
 (f)to assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the securities and futures industry.
 5.Functions and powers of Commission
 (1)The functions of the Commission are, so far as reasonably practicable—
 (a)to take such steps as it considers appropriate to maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry;
 (b)to supervise, monitor and regulate—
 (i)the activities carried on by recognized exchange companies, recognized clearing houses, recognized exchange controllers or recognized investor compensation companies, or by persons carrying on activities regulated by the Commission under any of the relevant provisions, other than registered institutions; and
 (ii)such of the activities carried on by registered institutions as are required to be regulated by the Commission under any of the relevant provisions;
 (c)to promote and develop an appropriate degree of self-regulation in the securities and futures industry;
 (d)to promote, encourage and enforce the proper conduct, competence and integrity of persons carrying on activities regulated by the Commission under any of the relevant provisions in the conduct of such activities;
 (e)to encourage the provision of sound, balanced and informed advice regarding transactions or activities related to financial products;
 (f)to take such steps as it considers appropriate to ensure that the relevant provisions are complied with;
 (g)to maintain and promote confidence in the securities and futures industry in such manner as it considers appropriate, including by the exercise of its discretion to disclose to the public any matter relating or incidental to the performance of any of its functions;
 (h)to co-operate with and provide assistance to regulatory authorities or organizations, whether formed or established in Hong Kong or elsewhere;
 (i)to enhance the understanding and knowledge of members of the public of financial services including—
 (i)the operation and functioning of the securities and futures industry; and
 (ii)the benefits, risks and liabilities associated with purchasing financial services including investing in financial products; (Replaced 9 of 2012 s. 31)
 (j)to encourage the public to appreciate the relative benefits of purchasing different types of financial services including investing in financial products through persons carrying on activities regulated by the Commission under any of the relevant provisions; (Amended 9 of 2012 s. 31)
 (k)to promote understanding by the public of the importance of—
 (i)making informed decisions regarding the purchasing of financial services and transactions and activities related to financial products; and
 (ii)taking responsibility for those decisions; (Replaced 9 of 2012 s. 31)
 (l)to secure an appropriate degree of protection for members of the public investing in or holding financial products, having regard to their degree of understanding and expertise in respect of investing in or holding financial products;
 (m)to promote, encourage and enforce—
 (i)the adoption of appropriate internal controls and risk management systems by persons carrying on activities regulated by the Commission under any of the relevant provisions, other than registered institutions; and
 (ii)the adoption of appropriate internal controls and risk management systems by registered institutions in the conduct of activities regulated by the Commission under any of the relevant provisions;
 (n)to suppress illegal, dishonourable and improper practices in the securities and futures industry;
 (o)to take appropriate steps in relation to the securities and futures industry further to any requirement of the Financial Secretary for the purpose of providing assistance in maintaining the financial stability of Hong Kong;
 (p)to recommend reforms of the law relating to the securities and futures industry;
 (q)to advise the Financial Secretary on matters relating to the securities and futures industry and provide him with such information in relation thereto as it considers appropriate; and
 (r)to perform functions conferred or imposed on it by or under this or any other Ordinance.
 (2)Subsection (1)(c) does not limit or otherwise affect any other function of the Commission.
 (3)The Commission, in performing any of its functions in relation to—
 (a)any authorized financial institution as a registered institution or as an associated entity of an intermediary; or
 (b)any person as an associated entity of an authorized financial institution that is a registered institution,
 may rely, in whole or in part, on the supervision of such authorized financial institution or person (as the case may be) by the Monetary Authority.
 (4)For the purposes of this Ordinance, the Commission may—
 (a)acquire, hold and dispose of property of any description;
 (b)make contracts or other agreements;
 (c)receive and expend moneys;
 (d)with the approval of the Financial Secretary, borrow money on security or other conditions;
 (da)establish a wholly owned subsidiary of the Commission to facilitate the performance of functions under subsection (1)(i), (j) and (k); (Added 9 of 2012 s. 31)
 (e)publish or otherwise make available materials (however described) indicating to persons who are, or who carry on activities, regulated by the Commission under any of the relevant provisions and, where the Commission considers appropriate, to any other persons the manner in which, in the absence of any particular consideration or circumstance, the Commission proposes to perform any of its functions; and
 (f)publish or otherwise make available materials (however described) indicating to the public any matter relating or incidental to the performance of any of the functions of the Commission.
 (5)Materials published or otherwise made available under subsection (4)(e) or (f) are not subsidiary legislation.
 6.General duties of Commission
 (1)In performing its functions, the Commission shall, so far as reasonably practicable, act in a way which—
 (a)is compatible with its regulatory objectives; and
 (b)it considers most appropriate for the purpose of meeting those objectives.
 (2)In pursuing its regulatory objectives and performing its functions, the Commission shall have regard to—
 (a)the international character of the securities and futures industry and the desirability of maintaining the status of Hong Kong as a competitive international financial centre;
 (b)the desirability of facilitating innovation in connection with financial products and with activities regulated by the Commission under any of the relevant provisions;
 (c)the principle that competition among persons carrying on activities regulated by the Commission under any of the relevant provisions should not be impeded unnecessarily;
 (d)the importance of acting in a transparent manner, having regard to its obligations of preserving secrecy and confidentiality; and
 (e)the need to make efficient use of its resources.
 7.Advisory Committee
 (1)There shall be an Advisory Committee to advise the Commission on matters of policy regarding any of its regulatory objectives and functions.
 (2)The Advisory Committee is constituted in accordance with Part 1 of Schedule 2 and shall conduct its business in accordance with that Part.
 (3)The Advisory Committee shall meet at least once every 3 months to advise the Commission.
 (4)The Commission may request the Advisory Committee to advise it on matters of policy regarding any of its regulatory objectives and functions.
 8.Commission may establish committees
 (1)The Commission may establish—
 (a)standing committees; and
 (b)special committees.
 (2)The Commission may refer a matter to a committee established under this section for consideration, inquiry or management.
 (3)The Commission may appoint a person to be a member of a committee established under this section, whether or not the person is a member of the Commission, and may appoint a member of the committee to be the chairman of the committee.
 (4)A reference of a matter to a committee under subsection (2) does not prevent the Commission from performing any of its functions.
 (5)The Commission may—
 (a)withdraw a reference under subsection (2) from a committee;
 (b)revoke an appointment of a member or chairman of a committee under subsection (3).
 (6)A committee established under this section may elect one of its members—
 (a)to be its chairman if a chairman has not been appointed by the Commission under subsection (3); or
 (b)to act as its chairman for any period during which a chairman appointed by the Commission under subsection (3) is unable to act as chairman due to illness, absence from Hong Kong or any other cause,
 and may at any time remove the member so elected from the office of the chairman.
 (7)A committee established under this section may, subject to the provisions of this Ordinance, regulate its own procedure and business.
 (8)A committee established under this section shall meet when and where the chairman of the committee determines, subject to any procedure fixed by the committee and any direction given by the Commission under subsection (9).
 (9)The Commission may give directions to a committee established under this section, whether generally or in any particular case, and whether regarding the manner in which it shall act or otherwise, and the committee shall act in accordance with any such directions.
 9.Staff of Commission
 (1)The Commission may employ persons for such remuneration and allowances, and on such other terms and conditions, as the Commission determines.
 (2)The Commission may provide and maintain schemes (whether contributory or not) for the payment of retirement benefits, gratuities or other allowances to its employees and their dependants.
 (3)The Commission may engage consultants, agents and advisers to assist it in the performance of its functions.
 10.Delegation and sub-delegation of Commission’s functions
 (1)Subject to subsection (2), the Commission may delegate any of its functions to—
 (a)a member of the Commission;
 (b)a committee established under section 8; or
 (c)an employee of the Commission, whether by reference to his name or to the office held by him.
 (1A)The Commission may delegate any of its functions under section 5(1)(i), (j) or (k) to a wholly owned subsidiary established under section 5(4)(da). (Added 9 of 2012 s. 32)
 (2)No delegation shall be made under subsection (1) in respect of—
 (a)the power of the Commission to delegate under this section; or
 (b)a function specified in Part 2 of Schedule 2.
 (2AA)However, subsection (2)(b) does not prevent a function specified in Part 3 of Schedule 2 from being delegated to the chief executive officer of the Commission for the purpose of the application of a stabilization option under the Financial Institutions (Resolution) Ordinance (Cap. 628) to any of the following— (Amended E.R. 2 of 2017)
 (a)a recognized clearing house;
 (b)a recognized exchange company that is designated under section 6(1)(b) of that Ordinance as a within scope financial institution;
 (c)a holding company (within the meaning of that Ordinance) or affiliated operational entity of an entity mentioned in paragraph (a) or (b). (Added 23 of 2016 s. 215)
 (2A)The Commission may delegate any of its functions under section 17 (investment of funds) or 241 (investment of money forming part of the compensation fund) to a consultant, agent or adviser engaged by the Commission under section 9(3). (Added 9 of 2012 s. 37)
 (3)Where the Commission delegates a function under this section, it may at the same time authorize the delegate to sub-delegate the function and the authorization may contain restrictions or conditions on the exercise of the power to sub-delegate.
 (4)A delegation or sub-delegation under this section does not prevent the Commission or its delegate from concurrently performing the function delegated or sub-delegated.
 (5)The Commission may—
 (a)revoke a delegation under this section;
 (b)revoke an authorization in respect of a sub-delegation under this section,
 whereupon the delegation or sub-delegation (as the case may be) shall cease to have effect.
 (6)Where a person or committee purports to act pursuant to a delegation or sub-delegation under this section, he or it shall be presumed, unless the contrary is proved, to be acting in accordance with the terms of the delegation or sub-delegation.
 (7)Without prejudice to subsection (4), where there is a delegation or sub-delegation under this section in respect of a function of the Commission, any reference in this or any other Ordinance to the Commission in connection with the performance of the function shall, unless the context otherwise requires, be construed accordingly.
 (8)The Legislative Council may by resolution amend Part 2 or 3 of Schedule 2. (Amended 23 of 2016 s. 215)
 11.Directions to Commission
 (1)After consultation with the chief executive officer of the Commission, the Chief Executive may, upon being satisfied that it is in the public interest to do so, give the Commission written directions as to the furtherance of any of its regulatory objectives or the performance of any of its functions. (Amended 15 of 2006 s. 2)
 (2)The Commission shall comply with any written direction given under subsection (1).
 (3)Where any written direction is given under subsection (1), any requirement under any other provision of this or any other Ordinance that the Commission shall, for the purpose of performing any of the functions to which the written direction relates—
 (a)form any opinion;
 (b)be satisfied as to any matter (including existence of particular circumstances); or
 (c)consult any person,
 shall not apply for all purposes connected with the performance of functions pursuant to, or consequent upon, the written direction.
 (4)Written directions given under subsection (1) are not subsidiary legislation.
 12.Commission to furnish information
 The Commission shall, when required by the Financial Secretary, furnish to the Financial Secretary such information as he specifies on the principles, practices and policy it is pursuing or adopting, or proposes to pursue or adopt, in furthering any of its regulatory objectives or performing any of its functions, and the reasons therefor.
 Division 2Accounting and financial arrangements
 13.Financial year and estimates
 (1)The financial year of the Commission commences on 1 April in each year.
 (2)The Commission shall, not later than 31 December in each financial year of the Commission, submit to the Chief Executive for his approval estimates of its income and expenditure for the next financial year.
 (3)The Financial Secretary shall cause the estimates as approved pursuant to subsection (2) to be laid on the table of the Legislative Council.
 14.Appropriation
 For each financial year of the Commission, the Government shall pay to the Commission out of the general revenue the moneys appropriated by the Legislative Council for that purpose.
 15.Accounts and annual report
 (1)The Commission shall keep proper accounts and records of its transactions.
 (2)The Commission shall, as soon as reasonably practicable after the end of each financial year of the Commission, prepare financial statements which shall—
 (a)give a true and fair view of the state of affairs of the Commission as at the end of the financial year and of the results of its operations and cash flows in the financial year; and
 (b)be signed by the chairman and the chief executive officer of the Commission. (Amended 15 of 2006 s. 3)
 (3)The Commission shall, as soon as reasonably practicable after the end of each financial year of the Commission, prepare a report on its activities during the financial year and send a copy of the report to the Financial Secretary who shall cause a copy thereof to be laid on the table of the Legislative Council.
 16.Auditors and audit
 (1)The Commission shall, with the approval of the Financial Secretary, appoint auditors.
 (2)The Commission shall, as soon as reasonably practicable after the end of each financial year of the Commission, submit to the auditors appointed under subsection (1) for audit the financial statements prepared for the financial year under section 15(2).
 (3)The auditors appointed under subsection (1) shall prepare a report on the financial statements submitted to them under subsection (2) and send the report to the Commission which shall, as soon as reasonably practicable after its receipt, send to the Financial Secretary a copy of the report and a copy of the financial statements to which the report relates.
 (4)The auditors appointed under subsection (1) shall include in their report a statement as to whether, in their opinion, the financial statements to which the report relates give a true and fair view of the state of affairs of the Commission as at the end of the financial year for which the financial statements are prepared and of the results of its operations and cash flows in the financial year.
 (5)An auditor appointed under subsection (1) has a right of access at all reasonable times to the books, accounts, vouchers, records and documents kept by the Commission and is entitled to require from the officers of the Commission such information and explanations as he considers necessary for the performance of his duties as auditor.
 (6)The Financial Secretary shall cause a copy of the report referred to in subsection (3), and a copy of the financial statements to which the report relates, to be laid on the table of the Legislative Council.
 (7)The Director of Audit or another public officer authorized by the Director under subsection (8) may at any reasonable time—
 (a)examine any books, accounts, vouchers, records or documents kept by the Commission; and
 (b)if the Director or the public officer (as the case may be) considers appropriate, make a copy of the whole of, or any entry in, such books, accounts, vouchers, records or documents.
 (8)The Director of Audit may authorize any public officer to perform any function for the purposes of subsection (7).
 17.Investment of funds
 The Commission may invest its funds which are not immediately required in the manner that the Financial Secretary approves.
 Part III
 Exchange Companies, Clearing Houses, Exchange Controllers, Investor Compensation Companies and Automated Trading Services
 (Format changes—E.R. 3 of 2015)
 Division 1Interpretation
 18.Interpretation of Part III
 (1)In this Part, unless the context otherwise requires—
 associated person (相聯者), in relation to a person entitled to exercise, or control the exercise of, voting power in relation to, or holding securities in, a corporation—
 (a)subject to paragraph (c), means any other person in respect of whom that first-mentioned person has an agreement or arrangement, whether oral or in writing, express or implied, with respect to the acquisition, holding or disposal of securities or other interests in that corporation or under which they act together in exercising their voting power in relation to it;
 (b)subject to paragraph (c), includes, in relation to such provisions of Division 4 as are specified in Part 2 of Schedule 3, a person, or a person belonging to a class of persons, specified in that Part to be an associated person;
 (c)excludes, in relation to such provisions of Division 4 as are specified in Part 3 of Schedule 3, a person, or a person belonging to a class of persons, specified in that Part not to be an associated person;
 controller (控制人), in relation to a corporation, means any person who is—
 (a)a shareholder controller of the corporation; or
 (b)an indirect controller of the corporation;
 default proceedings (違責處理程序) means any proceedings or other action taken by a recognized clearing house under its default rules;
 default rules (違責處理規則), in relation to a recognized clearing house, means the rules of the clearing house required by section 40(2) or made under section 40(2A); (Amended 6 of 2014 s. 57)
 defaulter (違責者) means a recognized clearing house, or a clearing participant, that is the subject of any default proceedings; (Amended 6 of 2014 s. 57)
 indirect controller (間接控制人), in relation to a corporation—
 (a)subject to paragraph (b), means a person in accordance with whose directions or instructions the directors of the corporation or of another corporation of which it is a subsidiary are accustomed or obliged to act;
 (b)excludes, in relation to such provisions of Division 4 as are specified in Part 4 of Schedule 3, a person, or a person belonging to a class of persons, specified in that Part not to be an indirect controller;
 market charge (市場押記) means a charge, whether fixed or floating, granted in favour of a recognized clearing house—
 (a)over any property which is held by or deposited with the clearing house; and
 (b)for the purpose of securing liabilities arising directly in connection with the clearing house’s ensuring the settlement of a market contract;
 market collateral (市場抵押品) means any property which is held by or deposited with a recognized clearing house for the purpose of securing liabilities arising directly in connection with the clearing house’s ensuring the settlement of a market contract;
 relevant corporation (相關法團) means a corporation of which a relevant recognized exchange controller is a controller;
 relevant office-holder (有關人員) means—
 (a)the Official Receiver;
 (b)a person acting in relation to a company as its liquidator, receiver or manager;
 (c)a person acting in relation to an individual as his trustee in bankruptcy or interim receiver of his property; or
 (d)a person appointed pursuant to an order for the administration in bankruptcy of an insolvent estate of a deceased person;
 relevant recognized exchange controller (相關認可控制人) means a recognized exchange controller which is a controller of the Stock Exchange Company;
 settlement (交收), in relation to a market contract, includes partial settlement;
 shareholder controller (股東控制人), in relation to a corporation, means any person who, either alone or with any associated person or persons, is entitled to exercise, or control the exercise of, more than 35% of the voting power at any general meeting of the corporation or of another corporation of which it is a subsidiary.
 (2)Where a charge is granted partly for the purpose specified in the definition of market charge in subsection (1) and partly for other purposes, the charge is in Division 3 a market charge in so far as it has effect for that specified purpose.
 (3)Where any collateral is granted partly for the purpose specified in the definition of market collateral in subsection (1) and partly for other purposes, the collateral is in Division 3 market collateral in so far as it has been provided for that specified purpose.
 (4)In Division 3, a reference to the law of insolvency includes a reference to every provision made by or under—
 (a)the Bankruptcy Ordinance (Cap. 6);
 (b)the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32); and (Amended 28 of 2012 ss. 912 & 920)
 (c)any other enactment which is concerned with or in any way related to the insolvency of a person.
 (5)In Division 3, a reference to settlement in relation to a market contract is a reference to the discharge of the rights and liabilities of the parties to the contract, whether by performance, compromise or otherwise.
 (6)Where there is a reference in this or any other Ordinance to a controller of a recognized exchange company or recognized clearing house (however expressed), the term controller shall be construed in accordance with the provisions of this section.
 (7)In this section—
 (a)to avoid doubt, the reference to property held by or deposited with a recognized clearing house for the purpose described in the definition of market collateral in subsection (1) includes property held or deposited as collateral, margin or guarantee fund contributions (by whatever name called in the rules of the clearing house) and whether the property is held or deposited by way of charge, transfer or other arrangement; and
 (b)
 guarantee fund contribution (保證基金供款) means any contribution by a recognized clearing house or its clearing participants to a fund that—
 (i)is maintained by the clearing house to cover losses, including losses arising in connection with—
 (A)it being unable or likely to become unable to meet its obligations in respect of any unsettled or open market contract; or
 (B)a clearing participant being unable, or appearing to be, or likely to become, unable to meet obligations in respect of unsettled or open market contracts to which that participant is a party; and
 (ii)may be applied for that purpose under the default rules of the clearing house. (Added 6 of 2014 s. 57)
 Division 2Exchange companies
 19.Recognition of exchange company
 (1)No person shall—
 (a)operate a stock market unless the person is—
 (i)the Stock Exchange Company;
 (ii)a recognized exchange company of which a relevant recognized exchange controller is a controller; or
 (iii)a relevant recognized exchange controller which is itself a recognized exchange company;
 (b)operate a futures market unless the person is a recognized exchange company;
 (c)assist in the operation of a stock market which is operated in contravention of this subsection;
 (d)assist in the operation of a futures market which is operated in contravention of this subsection.
 (2)Where the Commission is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 it may, after consultation with the public and then the Financial Secretary, by notice in writing served on a company, recognize the company as an exchange company—
 (i)subject to such conditions as it considers appropriate specified in the notice; and
 (ii)with effect from a date specified in the notice for the purpose.
 (3)Without limiting the generality of conditions which may be specified in a notice under subsection (2), the Commission may, by notice in writing served on a recognized exchange company, amend or revoke any condition specified in the first-mentioned notice or impose new conditions, where the Commission—
 (a)is satisfied that it is appropriate to do so on a ground specified in paragraph (a) or (b) of that subsection; and
 (b)has consulted the Financial Secretary.
 (4)Where the Commission amends or revokes any condition or imposes any new condition by a notice under subsection (3), the amendment, revocation or imposition takes effect at the time of service of the notice or at the time specified in the notice, whichever is the later.
 (5)A person who, without reasonable excuse, contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (6)Where a company becomes a recognized exchange company, the Commission shall cause notice of that fact to be published in the Gazette.
 (7)Where a company is seeking to be a recognized exchange company and the Commission is minded not to recognize the company under subsection (2), the Commission shall give the company a reasonable opportunity of being heard before making a decision not to recognize the company.
 (8)Where the Commission refuses to recognize a company as an exchange company under subsection (2), the Commission shall, by notice in writing served on the company, inform the company of the refusal and of the reasons for it.
 (9)A person shall not be regarded as contravening—
 (a)subsection (1)(b) by reason only of—
 (i)carrying on a business of providing automated trading services that constitutes an operation of a futures market if—
 (A)that person is authorized to provide the services under section 95(2) or is an intermediary licensed or registered for Type 7 regulated activity; and
 (B)by virtue of the authorization, licence or registration, that person is permitted to engage in activities that constitute an operation of a futures market; or
 (ii)carrying on a business of dealing in futures contracts that constitutes an operation of a futures market if—
 (A)that person is an intermediary licensed or registered for Type 2 regulated activity; and
 (B)by virtue of the licence or registration, that person is permitted to engage in activities that constitute an operation of a futures market; or
 (b)subsection (1)(d) by reason only of assisting in carrying on a business of providing automated trading services that constitutes an operation of a futures market or carrying on a business of dealing in futures contracts that constitutes an operation of a futures market if the conditions referred to in paragraph (a)(i)(A) and (B) or (ii)(A) and (B) (as the case may be) are fulfilled in relation to the business of providing automated trading services or the business of dealing in futures contracts.
 (10)In subsection (1), stock market (證券市場) shall have the meaning assigned to it in the definition of stock market in section 1 of Part 1 of Schedule 1, except that a reference to securities in that definition shall be construed as not including a reference to interests in any collective investment scheme.
 20.Transactions that may be conducted on recognized stock market and recognized futures market
 (1)No transaction may be conducted on a recognized stock market other than dealings in—
 (a)securities; and
 (b)other financial products which are approved by the Commission by notice published in the Gazette, either generally or in a particular case.
 (2)No transaction may be conducted on a recognized futures market other than dealings in—
 (a)futures contracts; and
 (b)other financial products,
 which are approved by the Commission by notice published in the Gazette, either generally or in a particular case.
 (3)A notice under subsection (1) or (2) is not subsidiary legislation.
 21.Duties of recognized exchange company
 (1)It shall be the duty of a recognized exchange company to ensure—
 (a)so far as reasonably practicable, an orderly, informed and fair market—
 (i)in the case of a recognized exchange company which operates a stock market, in securities that are traded on that stock market or through the facilities of that company; (Amended 6 of 2014 s. 3)
 (ii)in the case of a recognized exchange company which operates a futures market, in futures contracts that are traded on that futures market or through the facilities of that company; or (Amended 6 of 2014 s. 3)
 (iii)in OTC derivative products that are traded through the facilities of the recognized exchange company; and (Added 6 of 2014 s. 3)
 (b)that risks associated with its business and operations are managed prudently.
 (2)In discharging its duty under subsection (1), a recognized exchange company shall—
 (a)act in the interest of the public, having particular regard to the interest of the investing public; and
 (b)ensure that the interest of the public prevails where it conflicts with the interest of the recognized exchange company.
 (3)A recognized exchange company shall operate its facilities in accordance with the rules made under section 23 and approved under section 24.
 (4)A recognized exchange company shall formulate and implement appropriate procedures for ensuring that its exchange participants comply with the rules of the company.
 (5)A recognized exchange company shall immediately notify the Commission if it becomes aware—
 (a)that any of its exchange participants is unable to comply with any rules of the company or any financial resources rules; or
 (b)of a financial irregularity or other matter which in the opinion of the company may indicate that the financial standing or integrity of an exchange participant is in question, or that an exchange participant may not be able to meet his legal obligations.
 (6)A recognized exchange company shall at all times provide and maintain—
 (a)adequate and properly equipped premises;
 (b)competent personnel; and
 (c)automated systems with adequate capacity, facilities to meet contingencies or emergencies, security arrangements and technical support,
 for the conduct of its business.
 22.Immunity, etc.
 (1)Without limiting the generality of section 380(1), no civil liability, whether arising in contract, tort, defamation, equity or otherwise, shall be incurred by—
 (a)a recognized exchange company; or
 (b)any person acting on behalf of a recognized exchange company, including—
 (i)any member of the board of directors of the company; or
 (ii)any member of any committee established by the company,
 in respect of anything done or omitted to be done in good faith in the discharge or purported discharge of the duties of the company under section 21 or in the performance or purported performance of its functions under its rules.
 (2)Where, in the discharge or purported discharge of its duties under section 63, a recognized exchange controller gives an instruction or direction or makes a request to a recognized exchange company of which it is a controller, the company’s duties under section 21 or under its rules are not applicable to the company in respect of anything done or omitted to be done in good faith by the company in compliance with the instruction, direction or request.
 23.Rules by recognized exchange company
 (1)Without limiting any of its other powers to make rules, a recognized exchange company may make rules for such matters as are necessary or desirable—
 (a)for the proper regulation and efficient operation of the market which it operates;
 (b)for the proper regulation of its exchange participants and holders of trading rights;
 (c)for the establishment and maintenance of compensation arrangements for the investing public.
 (2)Without limiting the generality of subsection (1), a recognized exchange company which may operate a stock market may make rules for—
 (a)applications for the listing of securities and the requirements to be met before securities may be listed;
 (b)the entering into of agreements between the recognized exchange company and other persons in connection with the listing of securities, and the enforcement of those agreements by the company;
 (c)the cancellation and withdrawal of the listing of, and the suspension and resumption of dealings in, securities listed on the recognized stock market operated by the recognized exchange company;
 (d)the imposition on any person of obligations to observe specified standards of conduct or to perform, or refrain from performing, specified acts reasonably imposed in connection with the listing or continued listing of securities;
 (e)the admission of securities which are regulated in a jurisdiction outside Hong Kong to trading on a recognized stock market operated by the recognized exchange company;
 (f)the penalties or sanctions which may be imposed by the recognized exchange company for a breach of rules made under this section;
 (g)procedures or conditions which may be imposed, or circumstances which are required to exist, in relation to matters which are provided for in the rules made under this section;
 (h)dealing with possible conflicts of interest that might arise where a relevant corporation or a relevant recognized exchange controller seeks to be or is a listed corporation;
 (i)such other matters as are necessary or desirable for the proper and efficient operation and management of the recognized exchange company.
 (3)The Commission may, by notice in writing served on a recognized exchange company, request the company—
 (a)to make rules specified in the request within the period specified in that request; or
 (b)to amend rules referred to in the request in the manner and within the period specified in that request.
 (4)Before making a request under subsection (3), the Commission shall consult the Financial Secretary and the recognized exchange company to which the request relates.
 (5)Where the Commission is satisfied that a recognized exchange company has not complied with a request referred to in subsection (3) within the period specified in the request, the Commission may make or amend the rules specified in the request instead of the company.
 (6)The following persons or anyone who seeks to become any such person shall, if required to do so by the rules of a recognized exchange company, make a statutory declaration concerning such matters as may be specified in the rules—
 (a)an exchange participant or holder of trading rights of the company;
 (b)a director of a corporation which uses the facilities of the company;
 (c)a director of a corporation which is seeking to have any of its securities listed; and
 (d)a director or adviser of a listed corporation.
 (7)In making rules under this section, a recognized exchange company shall take into account that a solicitor or certified public accountant acting in his professional capacity in private practice has duties imposed by law and under rules of professional conduct. (Amended 23 of 2004 s. 56)
 (8)A recognized exchange company shall, in circumstances stipulated in arrangements agreed from time to time between it and The Law Society of Hong Kong or the Accounting and Financial Reporting Council, refer breaches of rules made under this section— (Amended 23 of 2004 s. 56; L.N. 66 of 2022)
 (a)which are alleged to have been committed by a solicitor or certified public accountant in private practice; and (Amended 23 of 2004 s. 56)
 (b)which may also constitute a breach of duty imposed by law or under rules of professional conduct,
 to The Law Society of Hong Kong or the Accounting and Financial Reporting Council (as the case may be), for determination of whether to make a finding, impose a penalty or sanction or take other disciplinary action. (Amended 23 of 2004 s. 56; L.N. 66 of 2022)
 (9)For the purposes of subsections (7) and (8), a person shall be regarded as acting in the capacity of a solicitor or certified public accountant in private practice if in the course of private practice he provides legal or professional accountancy services to a client, but shall not be regarded as so acting where, in respect of a matter governed by rules made under this section, he is also connected with the matter in any other capacity. (Amended 23 of 2004 s. 56)
 24.Approval of rules or amendments to rules of recognized exchange company
 (1)Subject to subsection (7), no rule (whether or not made under section 23) of a recognized exchange company or any amendment thereto shall have effect unless it has the approval in writing of the Commission.
 (2)A recognized exchange company shall submit or cause to be submitted to the Commission—
 (a)for its approval the rules and every amendment thereto that require approval under subsection (1), together with explanations of their purpose and likely effect, including their effect on the investing public, in sufficient detail to enable the Commission to decide whether to approve them or refuse to approve them; and
 (b)for its information the rules which belong to a class the subject of a declaration under subsection (7) and every amendment to the rules, as soon as reasonably practicable after they have been made.
 (3)The Commission shall, not later than 6 weeks after the receipt of a submission under subsection (2)(a) from a recognized exchange company, by notice in writing served on the company, give its approval or refuse to give its approval (together with its reasons for the refusal) to the rules or amendment of the rules (as the case may be) or any part thereof, the subject of the submission.
 (4)The Commission may give its approval under subsection (3) subject to requirements which shall be satisfied before the rules or amendment of the rules or any part thereof take effect.
 (5)The Commission may in a particular case, with the agreement of the recognized exchange company concerned, extend the time prescribed in subsection (3).
 (6)The Financial Secretary may, after consultation with the Commission and the recognized exchange company concerned, extend the time prescribed in subsection (3).
 (7)The Commission may, by notice published in the Gazette, declare any class of rules of a recognized exchange company to be a class of rules which are not required to be approved under subsection (1) and, accordingly, any rules of the company which belong to that class (including any amendment thereto) shall have effect notwithstanding that they have not been so approved.
 (8)Neither the rules under section 23 nor a notice under subsection (7) is subsidiary legislation.
 25.Transfer and resumption of functions of Commission
 (1)The Commission may request the Chief Executive in Council to transfer, by order (transfer order) published in the Gazette, to a recognized exchange company (designated exchange company)—
 (a)a function to which this section applies; or
 (b)that function in so far as it applies to the exchange participants or applicants to be exchange participants of the designated exchange company,
 if the Commission is satisfied that the designated exchange company is willing and able to perform the function.
 (2)This section applies to a function of the Commission under—
 (a)Part V;
 (b)section 145; (Amended 28 of 2012 ss. 912 & 920)
 (c)Parts II and XII of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32); and (Replaced 28 of 2012 ss. 912 & 920)
 (d)Part 5 of the Companies Ordinance (Cap. 622). (Added 28 of 2012 ss. 912 & 920)
 (3)A function to which this section applies may be transferred by a transfer order either in whole or in part, and the transfer may be subject to—
 (a)a reservation that the Commission is to perform the function concurrently with the designated exchange company; and
 (b)such other conditions as the Commission considers appropriate.
 (4)A transfer order may contain such incidental, supplemental and consequential provisions as may be necessary or expedient for the purpose of giving full effect to the order.
 (5)The Commission shall not request that a transfer order be made in respect of the making of financial resources rules unless the proposed designated exchange company has first supplied the Commission with a draft of the financial resources rules which it proposes to make, and the Commission is satisfied that the rules, if made, will afford the investing public an adequate level of protection.
 (6)The Commission may at the request or with the consent of a designated exchange company resume a function transferred by a transfer order, but the resumption takes effect only by order of the Chief Executive in Council.
 (7)The Chief Executive in Council may order that the Commission resume a function transferred to a designated exchange company by a transfer order if the Commission so requests and if it appears to the Chief Executive in Council to be in the public interest to do so.
 (8)A transfer order may provide for a designated exchange company to retain all or any of the fees payable in relation to the performance of a transferred function, and an order made under subsection (6) or (7) may provide for the Commission to retain all or any such fees, from a date specified in the order.
 26.Appointment of chief executive of recognized exchange company requires approval of Commission
 No appointment of a person as chief executive of a recognized exchange company shall have effect unless the appointment has the approval in writing of the Commission.
 27.Production of records, etc. by recognized exchange company
 (1)The Commission may, by notice in writing served on a recognized exchange company, require the company to provide to the Commission, within such period as the Commission may specify in the notice—
 (a)such books and records kept by it in connection with or for the purposes of its business or in respect of any trading in securities, futures contracts or OTC derivative products; and
 (b)such other information relating to its business or any trading in securities, futures contracts or OTC derivative products,
 as the Commission may reasonably require for the performance of its functions. (Amended 6 of 2014 s. 4)
 (2)A recognized exchange company served with a notice under subsection (1) which, without reasonable excuse, fails to comply with the notice commits an offence and is liable on conviction to a fine at level 5.
 28.Withdrawal of recognition of exchange company and direction to cease to provide facilities or services
 (1)Subject to subsections (4), (5) and (6), the Commission may, after consultation with the Financial Secretary, by notice in writing served on a recognized exchange company—
 (a)withdraw the company’s recognition as an exchange company with effect from a date specified in the notice for the purpose; or
 (b)direct the company to cease with effect from a date specified in the notice for the purpose—
 (i)to provide or operate such facilities as are specified therein; or
 (ii)to provide such services as are specified therein.
 (2)The Commission may by the notice served under subsection (1) permit the recognized exchange company to continue, on or after the date on which the withdrawal or direction is to take effect, to carry on such activities affected by the withdrawal or direction as the Commission may specify in the notice for the purpose of—
 (a)closing down the operations of the company or ceasing to provide the services specified in the notice; or
 (b)protecting the interest of the investing public or the public interest.
 (3)Where the Commission has granted a permission to a recognized exchange company under subsection (2), the company shall not, by reason of its carrying on the activities in accordance with the permission, be regarded as having contravened section 19(1).
 (4)The Commission may only serve a notice under subsection (1) in relation to a recognized exchange company that—
 (a)fails to comply with any requirement of this Ordinance or with a condition imposed under section 19;
 (b)is being wound up;
 (c)ceases to operate a market that it has been authorized to operate by virtue of section 19; or
 (d)requests the Commission to do so.
 (5)Except where responding to a request under subsection (4)(d), the Commission shall not exercise its power under subsection (1) in relation to a recognized exchange company unless it has given the company a reasonable opportunity of being heard.
 (6)Except where responding to a request under subsection (4)(d), the Commission shall give the recognized exchange company not less than 14 days’ notice in writing of its intention to serve a notice under subsection (1) and the grounds for doing so.
 (7)Where the Commission withdraws a company’s recognition as an exchange company under subsection (1)(a), it shall cause notice of that fact to be published in the Gazette.
 (8)A notice served under subsection (1)(a) shall not take effect—
 (a)subject to paragraph (b), until the expiration of the period within which an appeal against the notice may be made under section 33; or
 (b)if an appeal against the notice is made under section 33, until the appeal is withdrawn, abandoned or determined.
 (9)A notice served under subsection (1)(b) shall take effect immediately.
 29.Direction to cease to provide facilities or services in emergencies
 (1)In addition to the powers of the Commission under section 28, the Commission may, after consultation with a recognized exchange company, by notice in writing served on the company, direct the company to cease to provide or operate such facilities or cease to provide such services as are specified in the notice for a period not exceeding 5 business days.
 (2)The Commission may only serve a notice under subsection (1) if it is of the opinion that the orderly transaction of business on the stock market or futures market (as the case may be) is being, or is likely to be, impeded because—
 (a)an emergency or natural disaster has occurred in Hong Kong; or
 (b)there exists an economic or financial crisis, whether in Hong Kong or elsewhere, or any other circumstances, which is likely to prejudice orderly transaction of business on the stock market or futures market (as the case may be).
 (3)The Commission may, by notice in writing served on the recognized exchange company, extend the direction under subsection (1) for further periods not exceeding 10 business days in all.
 (4)A notice served under this section shall take effect immediately.
 30.Contravention of notice constitutes offence
 A person who, without reasonable excuse—
 (a)provides or operates facilities; or
 (b)provides services,
 in contravention of a notice under section 28(1)(b) or 29(1) or (3) commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 31.Prevention of entry into closed trading markets
 (1)The Commission may take all necessary steps to ensure compliance with a notice under section 28(1)(b) or 29(1) or (3) and may, in particular, secure—
 (a)the facilities to which the notice relates; or
 (b)the premises on which such facilities are kept or the premises on which the services to which the notice relates are provided,
 against use for dealings in securities or futures contracts or other purposes.
 (2)A person commits an offence and is liable on conviction to a fine at level 5 if, without the authority of the Commission or reasonable excuse, he—
 (a)makes use of any facilities or services to which the notice under section 28(1)(b) or 29(1) or (3) relates; or
 (b)enters the premises on which such facilities are kept or the premises on which such services are provided.
 32.Publication of directions
 Where the Commission—
 (a)directs a recognized exchange company under section 28(1)(b) or 29(1) to cease to provide or operate any facilities or cease to provide any services; or
 (b)extends under section 29(3) a direction referred to in that section,
 it shall cause notice of the particulars of the direction or extension (as the case may be) to be published in the Gazette.
 33.Appeals
 (1)A company served with a notice under section 28(1) or 29(1) or (3) may appeal against the notice to the Chief Executive in Council not later than 14 days after the date of service of the notice or such longer period (if any) as the Commission specifies in the notice.
 (2)The decision of the Chief Executive in Council on an appeal under subsection (1) shall be final.
 34.Restriction on use of titles relating to exchanges, markets, etc.
 (1)A person commits an offence if he, without the authority of the Commission or reasonable excuse, takes or uses the title—
 (a)“stock exchange”;
 (b)“stock market”;
 (c)“commodity exchange”;
 (d)“futures exchange”;
 (e)“futures market”;
 (f)“unified exchange”;
 (g)“united exchange”;
 (h)“證券交易所”;
 (i)“股票交易所”;
 (j)“證券市場”;
 (k)“股票市場”;
 (l)“商品交易所”;
 (m)“期貨交易所”;
 (n)“期貨市場”;
 (o)“聯合交易所”,
 or anything which closely resembles any such title.
 (2)A person who commits an offence under this section is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 35.Contract limits and reportable open position
 (1)Without prejudice to section 398(7) and (8), the Commission may make rules to—
 (a)prescribe limits on, or conditions relating to, the number of futures contracts which may be held or controlled, directly or indirectly, by any person, whether or not such contracts are traded on a recognized futures market or through the facilities of a recognized exchange company;
 (b)prescribe limits on, or conditions relating to, the number of options contracts which may be held or controlled, directly or indirectly, by any person, whether or not such contracts are traded on a recognized stock market or recognized futures market or through the facilities of a recognized exchange company;
 (c)require a person holding or controlling a reportable position to lodge a notice of that reportable position with a recognized exchange company or the Commission;
 (d)prescribe the manner in which and the period within which a notice of a reportable position is to be lodged;
 (e)prescribe the information by which a notice of a reportable position is to be accompanied.
 (2)The Commission shall consult the Financial Secretary before making rules under subsection (1)(e).
 (3)Subsection (1) does not prohibit the Commission from prescribing different limits or conditions, or different reportable positions, for different types or classes of futures or options contracts, or from exempting specified futures or options contracts.
 (4)Without limiting the generality of subsection (1) and without prejudice to section 398(7) and (8), the Commission may make rules for the purposes of this section to prohibit a person from—
 (a)directly or indirectly entering, during a specified period, into transactions of a specified class in excess of a specified amount; or
 (b)directly or indirectly holding or controlling positions of a specified class in excess of a specified position limit.
 (5)Rules made under this section may provide that a person who, without reasonable excuse, contravenes any specified provision of the rules that applies to the person commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine at level 6 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 3 and a term of imprisonment of 6 months.
 (6)In this section reportable position (須申報的持倉量) means an open position in futures or options contracts the number or total value of which is in excess of a number or total value specified by rules made under this section.
 36.Rules by Commission
 (1)Without prejudice to section 398(7) and (8), the Commission may make rules in respect of the following matters—
 (a)the listing of securities, and in particular—
 (i)prescribing the requirements to be met before securities may be listed;
 (ii)prescribing the procedure for dealing with applications for the listing of securities;
 (iii)providing for the cancellation of the listing of any specified securities if the Commission’s requirements for listing, or the requirements of the undertaking referred to in paragraph (e), are not complied with or the Commission considers that such action is necessary to maintain an orderly market in Hong Kong;
 (b)the conditions subject to which, and the circumstances in which, a recognized exchange company shall suspend dealings in securities or shall direct that dealings in securities recommence;
 (c)the procedure for and the method of allotment of any securities arising out of an offer made to members of the public in respect of those securities;
 (d)persons who may be admitted as an exchange participant of a recognized exchange company;
 (e)requiring corporations the securities of which are listed or accepted for listing to enter into an undertaking in the form prescribed in the rules with a recognized exchange company which may operate a stock market under section 19 to provide such information at such times as may be specified, and to carry out such duties in relation to its securities as may be imposed, in the undertaking; (Amended 16 of 2016 s. 3)
 (f)requiring a recognized exchange company which has become aware of any matter which adversely affects, or is likely to adversely affect, the ability of any exchange participant of the company to meet its obligations as an exchange participant, to make a report concerning the matter to the Commission as soon as reasonably practicable after becoming aware of the matter;
 (g)requiring a recognized exchange company when it expels any of its exchange participants, or suspends any of its exchange participants from trading on the recognized stock market or recognized futures market it operates or through its facilities, or requests any of its exchange participants to resign as an exchange participant, to notify the Commission of that fact within 3 business days after the expulsion, suspension or making of the request (as the case may be) and, in addition, to cause the expulsion, suspension or request to be notified to the public in such manner and within such period as may be prescribed in the rules;
 (h)any matter which is to be or may be prescribed by rules made under section 23.
 (2)Before making any rules in respect of any matter specified in subsection (1), the Commission shall consult—
 (a)the Financial Secretary; and
 (b)the recognized exchange company or all the recognized exchange companies (as the case may be) to which that matter relates.
 (3)Nothing in this section prevents a recognized exchange company from making rules under section 23 on any matter referred to in subsection (1), but any such rules shall have effect only to the extent that they are not repugnant to any rule made by the Commission under subsection (1).
 Division 3Clearing houses
 37.Recognition of clearing house
 (1)Where the Commission is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 it may, after consultation with the Financial Secretary, by notice in writing served on a company, recognize the company as a clearing house—
 (i)subject to such conditions as it considers appropriate specified in the notice; and
 (ii)with effect from a date specified in the notice for the purpose.
 (2)Without limiting the generality of conditions which may be specified in a notice under subsection (1), the Commission may, by notice in writing served on a recognized clearing house, amend or revoke any condition specified in the first-mentioned notice or impose new conditions, where the Commission—
 (a)is satisfied that it is appropriate to do so on a ground specified in paragraph (a) or (b) of that subsection; and
 (b)has consulted the Financial Secretary.
 (3)Where the Commission amends or revokes any condition or imposes any new condition by a notice under subsection (2), the amendment, revocation or imposition takes effect at the time of service of the notice or at the time specified in the notice, whichever is the later.
 (4)Where a company becomes a recognized clearing house, the Commission shall cause notice of that fact to be published in the Gazette.
 (5)Where a company is seeking to be a recognized clearing house and the Commission is minded not to recognize the company under subsection (1), the Commission shall give the company a reasonable opportunity of being heard before making a decision not to recognize the company.
 (6)Where the Commission refuses to recognize a company as a clearing house under subsection (1), the Commission shall, by notice in writing served on the company, inform the company of the refusal and of the reasons for it.
 38.Duties of recognized clearing house
 (1)It shall be the duty of a recognized clearing house to ensure—
 (a)so far as reasonably practicable, that there are orderly, fair and expeditious clearing and settlement arrangements for any transactions in securities, futures contracts or OTC derivative products cleared or settled through its facilities; and (Amended 6 of 2014 s. 5)
 (b)that risks associated with its business and operations are managed prudently.
 (2)In discharging its duty under subsection (1), a recognized clearing house shall—
 (a)act in the interest of the public, having particular regard to the interest of the investing public; and
 (b)ensure that the interest of the public prevails where it conflicts with the interest of the recognized clearing house.
 (3)A recognized clearing house shall operate its facilities in accordance with the rules made under section 40 and approved under section 41.
 (4)A recognized clearing house shall formulate and implement appropriate procedures for ensuring that its clearing participants comply with the rules of the clearing house.
 (5)A recognized clearing house shall at all times provide and maintain—
 (a)adequate and properly equipped premises;
 (b)competent personnel; and
 (c)automated systems with adequate capacity, facilities to meet contingencies or emergencies, security arrangements and technical support,
 for the conduct of its business.
 39.Immunity, etc.
 (1)Without limiting the generality of section 380(1), no civil liability, whether arising in contract, tort, defamation, equity or otherwise, shall be incurred by—
 (a)a recognized clearing house; or
 (b)any person acting on behalf of a recognized clearing house, including—
 (i)any member of the board of directors of the clearing house; or
 (ii)any member of any committee established by the clearing house,
 in respect of anything done or omitted to be done in good faith in the discharge or purported discharge of the duties of the clearing house under sections 38 and 47 or in the performance or purported performance of its functions under its rules, including its default rules.
 (2)Where, in the discharge or purported discharge of its duties under section 63, a recognized exchange controller gives an instruction or direction or makes a request to a recognized clearing house of which it is a controller, the clearing house’s duties under sections 38 and 47 or under its rules (including its default rules) are not applicable to the clearing house in respect of anything done or omitted to be done in good faith by the clearing house in compliance with the instruction, direction or request.
 (3)Without limiting the generality of section 380(1), no civil liability, whether arising in contract, tort, defamation, equity or otherwise, shall be incurred by—
 (a)a person performing, by virtue of a delegation under the default rules of a recognized clearing house, a function of the clearing house in connection with any default proceedings; or
 (b)any person acting on behalf of a person referred to in paragraph (a), including—
 (i)any member of the board of directors of that person; or
 (ii)any member of any committee established by that person,
 in respect of anything done or omitted to be done in good faith in the performance and purported performance of that function.
 (4)Any failure by a recognized clearing house to comply with its rules in relation to a matter does not prevent the matter from being treated for the purposes of this Ordinance as done in accordance with the rules so long as the failure does not substantially affect the rights of a person entitled to require compliance with the rules.
 (5)Where a relevant office-holder takes action in relation to property of a defaulter which is liable to be dealt with in accordance with the default rules of a recognized clearing house, and believes on reasonable grounds that he is entitled to take that action, he is not liable to any person in respect of any loss or damage resulting from his action except in so far as the loss or damage (as the case may be) is caused by the office-holder’s own negligence.
 40.Rules by recognized clearing houses
 (1)Without limiting any of its other powers to make rules, a recognized clearing house may make rules for such matters as are necessary or desirable—
 (a)for the proper regulation and efficient operation of the clearing or settlement facilities which it operates;
 (b)for the proper regulation of its clearing participants;
 (c)for the establishment and maintenance of compensation arrangements for the investing public.
 (2)A recognized clearing house shall make rules which—
 (a)provide for the taking of proceedings or other action if a clearing participant appears to be unable, or likely to become unable, to meet his obligations in respect of all unsettled or open market contracts to which he is a party; and
 (b)comply with Part 5 of Schedule 3.
 (2A)A recognized clearing house may make rules to provide for the following purposes—
 (a)taking proceedings or other action if—
 (i)the clearing house is unable, or likely to become unable, to meet its obligations in respect of any unsettled or open market contract to which it is a party as those obligations fall due; and
 (ii)it becomes necessary or desirable for the clearing house to cease to provide or operate any clearing and settlement facilities provided or operated by it;
 (b)taking proceedings or other action in relation to any contracts entered into between a clearing participant and its clients if—
 (i)the clearing participant appears to be unable, or likely to become unable, to meet its obligations in respect of all unsettled or open market contracts to which it is a party; and
 (ii)those contracts relate to such unsettled or open market contracts recorded in a client account;
 (c)taking proceedings or other action in relation to any positions or collateral relating to a contract entered into between a clearing participant and its clients referred to in paragraph (b) if—
 (i)the clearing participant appears to be unable, or likely to become unable, to meet its obligations in respect of all unsettled or open market contracts to which it is a party; and
 (ii)those positions or collateral relate to such unsettled or open market contracts recorded in a client account. (Added 6 of 2014 s. 58)
 (3)Where a recognized clearing house takes default proceedings, all subsequent proceedings or other action taken under its rules for the settlement of market contracts to which the defaulter is a party shall be treated as taken under the default rules.
 (4)The Commission may, by notice in writing served on a recognized clearing house, request the clearing house—
 (a)to make rules specified in the request within the period specified in that request; or
 (b)to amend rules referred to in the request in the manner and within the period specified in that request.
 (5)Before making a request under subsection (4), the Commission shall consult the Financial Secretary and the recognized clearing house to which the request relates.
 (6)Where the Commission is satisfied that a recognized clearing house has not complied with a request referred to in subsection (4) within the period specified in the request, the Commission may make or amend the rules specified in the request instead of the recognized clearing house.
 (7)In this section—
 client account (客户帳户), in relation to a clearing participant, means an account held with a recognized clearing house in the name of the clearing participant, other than a house account in which positions or collateral are recorded;
 house account (結算所帳户), in relation to a clearing participant, means an account—
 (a)which is held with a recognized clearing house in the name of the clearing participant; and
 (b)in which the following are recorded—
 (i)the clearing participant’s own positions or collateral;
 (ii)the positions or collateral of other persons that are regarded by the rules of the recognized clearing house to be the clearing participant’s own positions or collateral. (Added 6 of 2014 s. 58)
 41.Approval of rules or amendments to rules of recognized clearing house
 (1)Subject to subsection (7), no rule (whether or not made under section 40) of a recognized clearing house or any amendment thereto shall have effect unless it has the approval in writing of the Commission.
 (2)A recognized clearing house shall submit or cause to be submitted to the Commission—
 (a)for its approval the rules and every amendment thereto that require approval under subsection (1), together with explanations of their purpose and likely effect, including their effect on the investing public, in sufficient detail to enable the Commission to decide whether to approve them or refuse to approve them; and
 (b)for its information the rules which belong to a class the subject of a declaration under subsection (7) and every amendment to the rules, as soon as reasonably practicable after they have been made.
 (3)The Commission shall, not later than 6 weeks after the receipt of a submission under subsection (2)(a) from a recognized clearing house, by notice in writing served on the clearing house, give its approval or refuse to give its approval (together with its reasons for the refusal) to the rules or amendment of the rules (as the case may be) or any part thereof, the subject of the submission.
 (4)The Commission may give its approval under subsection (3) subject to requirements which shall be satisfied before the rules or amendment of the rules or any part thereof take effect.
 (5)The Commission may in a particular case, with the agreement of the recognized clearing house concerned, extend the time prescribed in subsection (3).
 (6)The Financial Secretary may, after consultation with the Commission and the recognized clearing house concerned, extend the time prescribed in subsection (3).
 (7)The Commission may, by notice published in the Gazette, declare any class of rules of a recognized clearing house (except any default rules of the clearing house) to be a class of rules which are not required to be approved under subsection (1) and, accordingly, any rules of the clearing house which belong to that class (including any amendment thereto) shall have effect notwithstanding that they have not been so approved.
 (8)Neither the rules under section 40 nor a notice under subsection (7) is subsidiary legislation.
 42.Production of records, etc. by recognized clearing house
 (1)The Commission may, by notice in writing served on a recognized clearing house, require the clearing house to provide to the Commission, within such period as the Commission may specify in the notice—
 (a)such books and records kept by it in connection with or for the purposes of its business or in respect of any clearing and settlement arrangements for any transactions in securities, futures contracts or OTC derivative products; and
 (b)such other information relating to its business or any clearing and settlement arrangements for any transactions in securities, futures contracts or OTC derivative products,
 as the Commission may reasonably require for the performance of its functions. (Amended 6 of 2014 s. 6)
 (2)A recognized clearing house served with a notice under subsection (1) which, without reasonable excuse, fails to comply with the notice commits an offence and is liable on conviction to a fine at level 5.
 43.Withdrawal of recognition of clearing house and direction to cease to provide facilities
 (1)Subject to subsections (3), (4) and (5), the Commission may, after consultation with the Financial Secretary, by notice in writing served on a recognized clearing house—
 (a)withdraw the company’s recognition as a clearing house with effect from a date specified in the notice for the purpose; or
 (b)direct the clearing house to cease to provide or operate with effect from a date specified in the notice for the purpose such clearing or settlement facilities as are specified therein.
 (2)The Commission may by the notice served under subsection (1) permit the recognized clearing house to continue, on or after the date on which the withdrawal or direction is to take effect, to carry on such activities affected by the withdrawal or direction as the Commission may specify in the notice for the purpose of—
 (a)closing down the operations of the clearing house; or
 (b)protecting the interest of the investing public or the public interest.
 (3)The Commission may only serve a notice under subsection (1) in relation to a recognized clearing house that—
 (a)fails to comply with any requirement of this Ordinance or with a condition imposed under section 37;
 (b)is being wound up;
 (c)ceases to operate as a clearing house; or
 (d)requests the Commission to do so.
 (4)Except where responding to a request under subsection (3)(d), the Commission shall not exercise its power under subsection (1) in relation to a recognized clearing house unless it has given the clearing house a reasonable opportunity of being heard.
 (5)Except where responding to a request under subsection (3)(d), the Commission shall give the recognized clearing house not less than 14 days’ notice in writing of its intention to serve a notice under subsection (1) and the grounds for doing so.
 (6)Where the Commission withdraws a company’s recognition as a clearing house under subsection (1)(a), it shall cause notice of that fact to be published in the Gazette.
 (7)Where the Commission directs under subsection (1)(b) a recognized clearing house to cease to provide or operate any clearing or settlement facilities, it shall cause notice of the particulars of the direction to be published in the Gazette.
 (8)A notice served under subsection (1)(a) shall not take effect—
 (a)subject to paragraph (b), until the expiration of the period within which an appeal against the notice may be made under section 44; or
 (b)if an appeal against the notice is made under section 44, until the appeal is withdrawn, abandoned or determined.
 (9)A notice served under subsection (1)(b) shall take effect immediately.
 44.Appeals
 (1)A company served with a notice under section 43(1) may appeal against the notice to the Chief Executive in Council not later than 14 days after the date of service of the notice or such longer period (if any) as the Commission specifies in the notice.
 (2)The decision of the Chief Executive in Council on an appeal under subsection (1) shall be final.
 45.Proceedings of recognized clearing house take precedence over law of insolvency
 (1)None of the following shall be regarded as to any extent invalid at law on the ground of inconsistency with the law relating to distribution of the assets of a person on insolvency, bankruptcy or winding up, or on the appointment of a receiver over any of the assets of a person—
 (a)a market contract;
 (b)the rules of a recognized clearing house relating to the settlement of a market contract;
 (c)any proceedings or other action taken under the rules of a recognized clearing house relating to the settlement of a market contract;
 (d)a market charge;
 (da)the provision of market collateral; (Added 6 of 2014 s. 59)
 (e)the default rules of a recognized clearing house; or
 (f)any default proceedings.
 (2)The powers of a relevant office-holder in his capacity as such, and the powers of a court acting under the law of insolvency, shall not be exercised in such a way as to prevent or interfere with—
 (a)the settlement in accordance with the rules of a recognized clearing house of a market contract; or
 (b)any default proceedings.
 (3)Subsection (2) shall not operate to prevent a relevant office-holder from recovering an amount under section 51 after the completion of a matter referred to in paragraph (a) or (b) of that subsection.
 46.Supplementary provisions as to default proceedings
 (1)A court may, on an application by a relevant office-holder, make such order as it considers appropriate altering or releasing him from compliance with the functions of his office that are affected by the fact that default proceedings are pending or could be taken, or have been or could have been taken.
 (2)The functions of the relevant office-holder referred to in subsection (1) shall be construed subject to an order made under that subsection.
 (3)Section 12, 14 or 20 to 20K of the Bankruptcy Ordinance (Cap. 6), sections 181, 183, 186 and 254 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and sections 670 and 673 of the Companies Ordinance (Cap. 622) do not prevent or interfere with any default proceedings. (Amended 28 of 2012 ss. 912 & 920)
 47.Duty to report on completion of default proceedings
 (1)A recognized clearing house shall, upon the completion by it of any default proceedings, make a report on such proceedings stating in respect of each defaulter—
 (a)any net sum certified by the clearing house to be payable by or to the defaulter; or (Amended 6 of 2014 s. 60)
 (b)the fact that no sum is so payable,
 (as the case may be) and the clearing house may include in that report such other particulars in respect of such proceedings as it considers appropriate.
 (2)A recognized clearing house which has made a report pursuant to subsection (1) shall supply the report to—
 (a)the Commission; and
 (b)(i)any relevant office-holder acting in relation to—
 (A)the defaulter to whom the report relates; or
 (B)that defaulter’s estate; or
 (ii)if there is no relevant office-holder referred to in subparagraph (i), the defaulter to whom the report relates.
 (3)Where the Commission receives pursuant to subsection (2) a report made pursuant to subsection (1), it may publish notice of that fact in such manner as it considers appropriate to bring it to the attention of creditors of the defaulter to whom the report relates.
 (4)Where a relevant office-holder or defaulter receives pursuant to subsection (2) a report made pursuant to subsection (1), he shall, at the request of a creditor of the defaulter to whom the report relates—
 (a)make the report available for inspection by the creditor;
 (b)on payment of such reasonable fee as the relevant office-holder or defaulter (as the case may be) determines, supply to the creditor all or any part of that report.
 (5)In subsections (2), (3) and (4), report (報告) includes a copy of a report.
 48.Net sum payable on completion of default proceedings
 (1)This section applies with respect to any net sum referred to in section 47(1)(a).
 (2)Where a bankruptcy or winding-up order has been made, or a resolution for voluntary winding up has been passed, any net sum shall, notwithstanding any provision of section 34 or 35 of the Bankruptcy Ordinance (Cap. 6) or section 264 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), be— (Amended 28 of 2012 ss. 912 & 920)
 (a)provable in the bankruptcy or winding up or (as the case may be) payable to the relevant office-holder; and
 (b)taken into account, where appropriate, under section 35 of the Bankruptcy Ordinance (Cap. 6) or that section as applied in the case of a winding-up order under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32). (Amended 28 of 2012 ss. 912 & 920)
 49.Disclaimer of property, rescission of contracts, etc.
 (1)Section 59 of the Bankruptcy Ordinance (Cap. 6) and section 268 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) do not apply in relation to— (Amended 28 of 2012 ss. 912 & 920)
 (a)a market contract;
 (b)a contract effected by a recognized clearing house for the purpose of realizing property provided as market collateral;
 (c)a market charge; or
 (d)any default proceedings.
 (2)Section 42 of the Bankruptcy Ordinance (Cap. 6) and section 182 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) do not apply in relation to any act, matter or thing which has been done pursuant to— (Amended 28 of 2012 ss. 912 & 920)
 (a)a market contract;
 (b)a disposal of property pursuant to a market contract;
 (c)the provision of market collateral;
 (d)a contract effected by a recognized clearing house for the purpose of realizing property provided as market collateral, or any disposal of property pursuant to such a contract;
 (e)a disposal of property in accordance with the rules of a recognized clearing house as to the application of property provided as market collateral;
 (f)a disposal of property as a result of which the property becomes subject to a market charge, or any transaction pursuant to which that disposal is made;
 (g)a disposal of property made in enforcing a market charge;
 (h)a market charge; or
 (i)any default proceedings.
 50.Adjustment of prior transactions
 (1)No order shall be made pursuant to—
 (a)section 49 or 50 of the Bankruptcy Ordinance (Cap. 6);
 (b)section 265D or 266 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32); or (Amended 28 of 2012 ss. 912 & 920; 14 of 2016 s. 184)
 (c)section 60 of the Conveyancing and Property Ordinance (Cap. 219),
 in relation to any matter to which this section applies.
 (2)The matters to which this section applies are—
 (a)a market contract;
 (b)a disposal of property pursuant to a market contract;
 (c)the provision of market collateral;
 (d)a contract effected by a recognized clearing house for the purpose of realizing property provided as market collateral;
 (e)a disposal of property in accordance with the rules of a recognized clearing house as to the application of property provided as market collateral;
 (f)a market charge; and
 (g)any default proceedings.
 (3)In subsection (1)(b), the reference to section 266 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) includes that section as in force immediately before the commencement date of the Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 (14 of 2016). (Added 14 of 2016 s. 184)
 51.Right of relevant office-holder to recover certain amounts arising from certain transactions
 (1)Where a clearing participant (the first participant) enters into a transaction for the sale or purchase of securities with another clearing participant (the second participant) at an undervalue or an over-value in circumstances described in subsection (2), and thereafter a relevant office-holder is acting in relation to—
 (a)the second participant;
 (b)the person who was, in respect of the transaction, the principal of the second participant (the second principal); or
 (c)the estate of the second participant or the second principal,
 then, unless a court otherwise orders, the relevant office-holder may recover, from the first participant, or the person who was, in respect of the transaction, the principal of the first participant (the first principal), an amount equal to the prescribed gain obtained under the transaction by the first participant or the first principal (as the case may be). The amount is recoverable even if the transaction may have been discharged in accordance with the rules of a recognized clearing house and replaced by a market contract.
 (2)The circumstances referred to in subsection (1) in which a transaction is entered into occur when—
 (a)a prescribed event has occurred in relation to the second participant or the second principal; or
 (b)the first participant or the first principal knew or ought reasonably to have known—
 (i)in the case of the first participant, that a prescribed event was likely to occur in relation to the second participant or the second principal;
 (ii)in the case of the first principal, that a prescribed event was likely to occur in relation to the second principal,
 and the event occurs within the period of 6 months immediately following the date on which the transaction was so entered into.
 (3)In this section—
 prescribed event (訂明事件), in relation to a second participant or a second principal, means—
 (a)grounds exist for a creditor to present a bankruptcy petition against the second participant or the second principal (as the case may be);
 (b)the making of a statement in the specified form in respect of the second participant or the second principal (as the case may be) pursuant to section 228A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32); (Amended 28 of 2003 s. 129; 28 of 2012 ss. 912 & 920; 14 of 2016 s. 185)
 (c)a meeting of creditors summoned in relation to the second participant or the second principal (as the case may be) pursuant to section 241 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32); or (Amended 28 of 2012 ss. 912 & 920)
 (d)the presentation of a petition for the winding up of the second participant or the second principal (as the case may be) by a court;
 prescribed gain (訂明收益), in relation to a transaction referred to in subsection (1), means the difference between—
 (a)the market value of the securities the subject of the transaction; and
 (b)the value of the consideration for the transaction,
 as at the time the transaction was entered into.
 52.Application of market collateral not affected by certain other interests, etc.
 (1)The provisions of this section have effect with respect to the application by a recognized clearing house of property provided as market collateral.
 (2)So far as necessary to enable the property to be applied in accordance with the rules of a recognized clearing house, it may be so applied notwithstanding any prior equitable interest or right, or any right or remedy arising from a breach of fiduciary duty, unless the clearing house had actual notice of the interest, right or breach of duty (as the case may be) at the time the property was provided as market collateral.
 (3)No right or remedy arising subsequently to the property being provided as market collateral may be enforced so as to prevent or interfere with the application of the property by the recognized clearing house in accordance with its rules.
 (4)Where a recognized clearing house has power by virtue of the provisions of this section to apply property notwithstanding an interest, right or remedy, a person to whom the clearing house disposes of the property in accordance with its rules takes free from that interest, right or remedy.
 53.Enforcement of judgments over property subject to market charge, etc.
 (1)Where property is subject to a market charge or has been provided as market collateral, no execution or other legal process for the enforcement of a judgment or order may be commenced or continued, and no distress may be levied, against the property by a person not seeking to enforce any interest in or security over the property, except with the consent of the recognized clearing house concerned.
 (2)Where by virtue of this section a person would not be entitled to enforce a judgment or order against any property, any injunction or other remedy granted with a view to facilitating the enforcement of any such judgment or order shall not extend to that property.
 54.Law of insolvency in other jurisdictions
 (1)A court shall not, pursuant to any enactment or rule of law, recognize or give effect to—
 (a)an order of a court exercising jurisdiction under the law of insolvency in a place outside Hong Kong; or
 (b)an act of a person appointed in that place to perform a function under the law of insolvency there,
 in so far as making the order or doing the act would be prohibited in the case of a court in Hong Kong or a relevant office-holder by provisions made by or under this Ordinance.
 (2)In this section, law of insolvency (破產清盤法), in relation to a place outside Hong Kong, means any law of that place which is similar to, or serves the same purposes as, any part of the law of insolvency in Hong Kong.
 55.Clearing participant to be party to certain transactions as principal
 (1)Where a clearing participant—
 (a)in his capacity as such enters into any transaction (including a market contract) with a recognized clearing house; and
 (b)but for this subsection, would be a party to that transaction as agent,
 then, notwithstanding any other enactment or rule of law, as between, but only as between, the clearing house and any other person (including the clearing participant and the person who is his principal in respect of that transaction), the clearing participant shall for all purposes (including any action, claim or demand, either civil or criminal)—
 (i)be deemed not to be a party to that transaction as agent; and
 (ii)be deemed to be a party to that transaction as principal.
 (2)Where—
 (a)2 or more clearing participants in their capacities as such enter into any transaction; and
 (b)but for this subsection, any such clearing participant would be a party to that transaction as agent,
 then, notwithstanding any other enactment or rule of law, any such clearing participant to whom paragraph (b) applies shall for all purposes (including any action, claim or demand, either civil or criminal), except as between, but only as between, him and the person who is his principal in respect of that transaction—
 (i)be deemed not to be a party to that transaction as agent; and
 (ii)be deemed to be a party to that transaction as principal.
 56.Property deposited with recognized clearing house
 (1)Subject to subsections (2) and (3), where any property is deposited as market collateral by a clearing participant with a recognized clearing house in accordance with the rules of the clearing house, then, notwithstanding any other enactment or rule of law, no action, claim or demand, either civil or criminal, in respect of any right, title or interest in such property held or enjoyed by any person lies, or shall be commenced or allowed, against the clearing house or its nominees.
 (2)The operation of subsection (1) in respect of any property deposited as market collateral with a recognized clearing house is subject to the modifications and exclusions provided in the rules of the clearing house.
 (3)This section does not operate to prejudice the operation of— (Amended 28 of 2012 ss. 912 & 920; 16 of 2016 s. 4)
 (a)section 633 of the Companies Ordinance (Cap. 622); or
 (b)any provision of the OFC rules relating to the rectification of the register of shareholders of an open-ended fund company. (Amended 16 of 2016 s. 4)
 57.Preservation of rights, etc.
 Except to the extent that they expressly provide, the provisions of this Division do not operate to limit, restrict or otherwise affect—
 (a)any right, title, interest, privilege, obligation or liability of a person;
 (b)any investigation, legal proceeding or remedy in respect of any such right, title, interest, privilege, obligation or liability.
 58.Amendment of Schedule 3
 (1)The Financial Secretary may, by notice published in the Gazette, amend Part 5 of Schedule 3.
 (2)For the avoidance of doubt, it is hereby declared that the power of the Financial Secretary under subsection (1) to amend Part 5 of Schedule 3 may be exercised in such a way as to include in that Part a provision which requires a recognized clearing house to have, as part of its default rules, rules which prohibit the clearing house from taking any proceedings or other action specified in the provision, either generally or in a particular case.
 Division 4Exchange controllers
 59.Recognition of exchange controller
 (1)Subject to subsection (20) and section 62, no person shall become or continue to be a controller of a recognized exchange company or recognized clearing house unless the person is a recognized exchange controller.
 (2)Where the Commission is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 it may, with the consent in writing of the Financial Secretary, by notice in writing served on a company, recognize the company as an exchange controller—
 (i)subject to such conditions as it considers appropriate specified in the notice; and
 (ii)with effect from a date specified in the notice for the purpose.
 (3)Without limiting the generality of conditions which may be specified in a notice under subsection (2), the Commission may, by notice in writing served on a recognized exchange controller, amend or revoke any condition specified in the first-mentioned notice or impose new conditions, where the Commission—
 (a)is satisfied that it is appropriate to do so on a ground specified in paragraph (a) or (b) of that subsection; and
 (b)has the consent in writing of the Financial Secretary to do so.
 (4)Where the Commission amends or revokes any condition or imposes any new condition by a notice under subsection (3), the amendment, revocation or imposition takes effect at the time of service of the notice or at the time specified in the notice, whichever is the later.
 (5)Subject to subsection (6), a person who contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (6)Where a person is charged with an offence under subsection (5), it is a defence to the charge for the person to prove that the person did not know that the acts or circumstances by virtue of which the person became a controller of the recognized exchange company or recognized clearing house concerned were such as to have that effect.
 (7)Where a person—
 (a)is a controller of a recognized exchange company or recognized clearing house in contravention of subsection (1) (and whether or not the person is charged with an offence under subsection (5) in relation to the contravention);
 (b)did not know and had no reason to suspect the existence of any of the acts or circumstances by virtue of which the person became the controller of the recognized exchange company or recognized clearing house; and
 (c)subsequently becomes aware of the fact that the person has become such a controller,
 the person shall serve on the Commission, not later than 14 days after becoming aware of that fact, a notice in writing stating that the person has become such a controller.
 (8)The Commission may, upon the service of a notice under subsection (7)—
 (a)recognize the person as an exchange controller in accordance with subsection (2); or
 (b)refuse to recognize the person as an exchange controller.
 (9)Where a person is a controller of a recognized exchange company or recognized clearing house in contravention of subsection (1) (and whether or not the person is charged with an offence under subsection (5) in relation to the contravention)—
 (a)the Commission may, by notice published in the Gazette—
 (i)declare that any votes cast at any meeting of the recognized exchange company or recognized clearing house (as the case may be) by the person after the person became the controller shall be void and of no effect; and
 (ii)give such directions as it considers appropriate for any such meetings to be reconvened for voting anew on the business on which such votes were cast;
 (b)the person or any of his associated persons shall not exercise any rights conferred on the person as a holder of securities in the recognized exchange company or recognized clearing house, or any rights in securities in any such company which are otherwise controlled by the person, except for the purpose of ceasing to be such controller; and
 (c)the Commission may, by notice in writing served on the person, direct the person to take such steps as are specified in the notice—
 (i)for the purpose of causing the person to cease to be such controller; and
 (ii)within such period as is specified in the notice for the purpose.
 (10)Without limiting the generality of steps referred to in subsection (9)(c) which may be specified in a notice under that subsection to be served on a person referred to in that subsection, such steps may consist in whole or in part of steps proposed in writing to the Commission by that person.
 (11)The steps specified in a notice under subsection (9)(c) may be framed so as to afford the person on whom the notice is served a choice between different ways of ceasing to be a controller of the recognized exchange company or recognized clearing house concerned.
 (12)A notice served under subsection (9)(c) shall not take effect—
 (a)subject to paragraph (b), until the expiration of the period within which an appeal against the notice may be made under section 73; or
 (b)if an appeal against the notice is made under section 73, until the appeal is withdrawn, abandoned or determined.
 (13)Subject to subsection (14), a person served with a notice under subsection (9)(c) who fails to comply with the notice commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (14)It is a defence for a person charged with an offence under subsection (13) to prove that the person exercised reasonable diligence to comply with the notice concerned under subsection (9)(c) served on the person.
 (15)Where a person served with a notice under subsection (9)(c) fails to comply with the notice (and whether or not the person is charged with an offence under subsection (13) in relation to the failure), the provisions of Part 6 of Schedule 3 shall immediately apply.
 (16)The provisions of this section, except subsection (5), shall apply to a person who became a controller of a recognized exchange company or recognized clearing house before the commencement of this section as they apply to a person who became a controller of a recognized exchange company or recognized clearing house on or after that commencement.
 (17)Where a company becomes a recognized exchange controller, the Commission shall cause notice of that fact to be published in the Gazette.
 (18)Where a company is seeking to be a recognized exchange controller and the Commission is minded not to recognize the company under subsection (2), the Commission shall give the company a reasonable opportunity of being heard before making a decision not to recognize the company.
 (19)Where the Commission refuses to recognize a company or a person as an exchange controller under subsection (2) or (8)(b), the Commission shall, by notice in writing served on the company or the person (as the case may be), inform the company or the person of the refusal and of the reasons for it.
 (20)Subsection (1) shall not apply to a person who is a controller of a recognized exchange company or recognized clearing house if the recognized exchange company or recognized clearing house is itself a recognized exchange controller.
 (21)A notice under subsection (9)(a) is not subsidiary legislation.
 60.Interest of recognized exchange controller in recognized exchange company or recognized clearing house cannot be increased or decreased except with approval of Commission
 Where a recognized exchange controller is a controller of a recognized exchange company or recognized clearing house, then, by virtue of this section and notwithstanding any other enactment or rule of law—
 (a)any interest the recognized exchange controller has in the recognized exchange company or recognized clearing house (as the case may be) as such controller cannot be increased or decreased except with the approval in writing of the Commission;
 (b)any attempt (whether in the form of an agreement or otherwise and by whomsoever) to increase or decrease any such interest in contravention of paragraph (a) is void for all purposes.
 61.Person not to become minority controller of exchange controller, etc. without approval of Commission
 (1)Subject to subsections (2) and (16), on or after the commencement of this section, a person shall not—
 (a)be or become a minority controller of a recognized exchange controller, recognized exchange company or recognized clearing house except with the approval in writing of the Commission after consultation with the Financial Secretary; and
 (b)if such approval is given, and subject to any condition specified in the approval disapplying this paragraph in whole or in part, increase the interest the person has as such minority controller except with the further approval in writing of the Commission after consultation with the Financial Secretary.
 (2)The Commission shall not give an approval under subsection (1)(a) or (b) unless it is satisfied that it is appropriate to do so in the interest of the investing public or in the public interest.
 (3)Where the Commission refuses to give an approval under subsection (1)(a) or (b), it shall give notice in writing of its reasons for the refusal to the person concerned.
 (4)Subject to subsection (5), a person who contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (5)Where a person is charged with an offence under subsection (4), it is a defence to the charge for the person to prove that the person—
 (a)did not know that the acts or circumstances by virtue of which the person became a minority controller, or increased the interest the person has as a minority controller (as the case may be) of the recognized exchange controller, recognized exchange company or recognized clearing house concerned were such as to have that effect; or
 (b)exercised reasonable diligence to avoid contravening subsection (1).
 (6)Where a person—
 (a)is a minority controller of a recognized exchange controller, recognized exchange company or recognized clearing house in contravention of subsection (1) (and whether or not the person is charged with an offence under subsection (4) in relation to the contravention);
 (b)did not know and had no reason to suspect the existence of any of the acts or circumstances by virtue of which the person became the minority controller of that recognized exchange controller, recognized exchange company or recognized clearing house; and
 (c)subsequently becomes aware of the fact that the person has become such a minority controller,
 the person shall serve on the Commission, not later than 14 days after becoming aware of that fact, a notice in writing stating that the person has become such a minority controller.
 (7)The Commission may, upon the service of a notice under subsection (6)—
 (a)approve the person as a minority controller in accordance with subsection (1); or
 (b)refuse to approve the person as a minority controller.
 (8)Where a person is a minority controller of a recognized exchange controller, recognized exchange company or recognized clearing house in contravention of subsection (1) (and whether or not the person is charged with an offence under subsection (4) in relation to the contravention), the Commission may, by notice published in the Gazette—
 (a)declare that any votes cast at any meeting of the recognized exchange controller, recognized exchange company or recognized clearing house (as the case may be) by the person after the person became the minority controller, shall be void and of no effect; and
 (b)give such directions as it considers appropriate for any such meetings to be reconvened for voting anew on the business on which such votes were cast.
 (9)Where a person is a minority controller of a recognized exchange controller, recognized exchange company or recognized clearing house in contravention of subsection (1) or has failed to comply with a condition specified in an approval under that subsection (and whether or not the person is charged with an offence under subsection (4) in relation to the contravention)—
 (a)the person or any of his associated persons shall not exercise any rights conferred on the person as a holder of securities in the recognized exchange controller, recognized exchange company or recognized clearing house concerned or any rights in securities in any such company which are otherwise controlled by the person, except for the purpose of ceasing to be such controller; and
 (b)the Commission may, by notice in writing served on the person, direct the person to take such steps as are specified in the notice—
 (i)for the purpose of causing the person to cease to be a minority controller of the recognized exchange controller, recognized exchange company or recognized clearing house the subject of that contravention or failure; and
 (ii)within such period as is specified in the notice for the purpose.
 (10)Without limiting the generality of steps referred to in subsection (9)(b) which may be specified in a notice under that subsection to be served on a person referred to in that subsection, such steps may consist in whole or in part of steps proposed in writing to the Commission by that person.
 (11)The steps specified in a notice under subsection (9)(b) may be framed so as to afford the person on whom the notice is served a choice between different ways of ceasing to be a minority controller of the recognized exchange controller, recognized exchange company or recognized clearing house concerned.
 (12)A notice served under subsection (9)(b) shall not take effect—
 (a)subject to paragraph (b), until the expiration of the period within which an appeal against the notice may be made under section 73; or
 (b)if an appeal against the notice is made under section 73, until the appeal is withdrawn, abandoned or determined.
 (13)Subject to subsection (14), a person served with a notice under subsection (9)(b) who fails to comply with the notice commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (14)It is a defence for a person charged with an offence under subsection (13) to prove that the person exercised reasonable diligence to comply with the notice concerned under subsection (9)(b) served on the person.
 (15)Where a person served with a notice under subsection (9)(b) fails to comply with the notice (and whether or not the person is charged with an offence under subsection (13) in relation to the failure), the provisions of Part 6 of Schedule 3 shall immediately apply.
 (16)The Commission may, after consultation with the Financial Secretary, make rules to exempt a person, or a person belonging to a class of persons, specified in the rules from one or more of the requirements of subsection (1) subject to such conditions (if any) as are specified in the rules.
 (17)Where a person is seeking to be a minority controller of a recognized exchange controller, recognized exchange company or recognized clearing house and the Commission is minded not to give approval under subsection (1) in relation thereto, the Commission shall give the person a reasonable opportunity of being heard before making a decision not to give such approval.
 (18)Nothing in this section shall operate to prevent the Commission from approving under this or any other Ordinance the provisions of the constitution, or the provisions of an amendment to the constitution, of a recognized exchange controller, recognized exchange company or recognized clearing house which impose requirements additional to this section in relation to—
 (a)interests held in the recognized exchange controller, recognized exchange company or recognized clearing house (as the case may be) including, but not limited to, the exercise, or the control of the exercise, of voting power at any general meeting of the recognized exchange controller, recognized exchange company or recognized clearing house (as the case may be); or
 (b)steps to be taken for the purpose of causing a person to dispose of any such interest including, but not limited to, ceasing to be a minority controller (by whatever name called) of the recognized exchange controller, recognized exchange company or recognized clearing house (as the case may be).
 (19)A notice under subsection (8) is not subsidiary legislation.
 (20)
 In this section, minority controller (次要控制人), in relation to a recognized exchange controller, recognized exchange company or recognized clearing house—
 (a)subject to paragraph (b), means any person who, either alone or with any associated person or persons, is entitled to exercise, or control the exercise of, 5% or more of the voting power at any general meeting of the recognized exchange controller, recognized exchange company or recognized clearing house (as the case may be) or of a corporation of which the recognized exchange controller, recognized exchange company or recognized clearing house (as the case may be) is a subsidiary;
 (b)does not include—
 (i)a recognized exchange controller; or
 (ii)a person, or a person belonging to a class of persons, specified in Part 7 of Schedule 3 not to be a minority controller for the purposes of this Division.
 62.Exemption from section 59(1) and revocation of exemption
 (1)Where the Financial Secretary is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 he may, by notice in writing served on a person, exempt the person from section 59(1)—
 (i)subject to such conditions as he considers appropriate specified in the notice; and
 (ii)with effect from a date specified in the notice for the purpose.
 (2)Where the Financial Secretary is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 he may, by notice in writing served on a person the subject of an exemption under subsection (1) stating the reasons in support of the ground or grounds for the notice, revoke the exemption—
 (i)subject to such conditions as he considers appropriate specified in the notice; and
 (ii)with effect from a date specified in the notice for the purpose, being a date reasonable in all the circumstances of the case.
 (3)Subject to subsection (4), a person who fails to comply with a condition specified in a notice under subsection (1) or (2) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (4)It is a defence for a person charged with an offence under subsection (3) to prove that the person exercised reasonable diligence to comply with the notice concerned under subsection (1) or (2) served on the person.
 (5)Without limiting the generality of the Financial Secretary’s power under subsection (1), a person is exempt from section 59(1) in the cases specified in Part 8 of Schedule 3.
 (6)For the avoidance of doubt, it is hereby declared that the Financial Secretary’s power under subsection (2) to revoke an exemption under subsection (1) includes the power to revoke and replace the exemption.
 63.Duties of recognized exchange controller
 (1)It shall be the duty of a recognized exchange controller which is a controller of a recognized exchange company or recognized clearing house to ensure so far as reasonably practicable—
 (a)an orderly, informed and fair market in securities or futures contracts traded on the stock market or futures market operated by the recognized exchange company or through the facilities of the company;
 (ab)an orderly, informed and fair market in OTC derivative products traded through the facilities of the recognized exchange company; (Added 6 of 2014 s. 7)
 (b)that there are orderly, fair and expeditious clearing and settlement arrangements for any transactions in securities, futures contracts or OTC derivative products cleared or settled through the facilities of the recognized clearing house; (Amended 6 of 2014 s. 7)
 (c)that risks associated with its business and operations are managed prudently;
 (d)that the recognized exchange company or recognized clearing house (as the case may be) complies with any lawful requirement placed on it under any enactment or rule of law and with any other legal requirement placed on it.
 (2)In discharging its duty under subsection (1)(a), (b) or (c), a recognized exchange controller shall—
 (a)act in the interest of the public, having particular regard to the interest of the investing public; and
 (b)ensure that the interest of the public prevails where it conflicts with the interest of the recognized exchange controller.
 64.Immunity, etc.
 Without limiting the generality of section 380(1), no civil liability, whether arising in contract, tort, defamation, equity or otherwise, shall be incurred by—
 (a)a recognized exchange controller; or
 (b)any person acting on behalf of a recognized exchange controller, including—
 (i)any member of the board of directors of the recognized exchange controller; or
 (ii)any member of any committee established by the recognized exchange controller,
 in respect of anything done or omitted to be done in good faith in the discharge or purported discharge of the duties of the controller under section 63 or in the performance or purported performance of its functions under its rules.
 65.Establishment and functions of Risk Management Committee
 (1)A recognized exchange controller shall establish and keep established a committee, to be called the Risk Management Committee, to formulate policies on risk management matters relating to the activities of the recognized exchange controller and of any recognized exchange company or recognized clearing house of which the recognized exchange controller is a controller and to submit such policies to the recognized exchange controller for its consideration.
 (2)The Risk Management Committee shall consist of—
 (a)the chairman of the recognized exchange controller who shall also be the chairman of the Committee; and
 (b)not less than 4 or more than 7 other members.
 (3)The Financial Secretary shall appoint not less than 3 or more than 5 of the members referred to in subsection (2)(b).
 (4)The recognized exchange controller shall appoint not more than 2 of the members referred to in subsection (2)(b) of whom not less than one shall be a member of the board of directors of the recognized exchange controller who—
 (a)is such a member otherwise than by virtue of an appointment under section 77(1); and
 (b)is not the chief executive of the recognized exchange controller.
 66.Rules by recognized exchange controllers
 (1)Without limiting any of its other powers to make rules, a recognized exchange controller may make rules for such matters as are necessary or desirable—
 (a)for the discharge of its duties under section 63;
 (b)for the establishment and maintenance of compensation arrangements for the investing public.
 (2)The Commission may, after consultation with the Financial Secretary, by notice published in the Gazette, declare a person or body of persons specified in the notice to be a person or body of persons (as the case may be) to which paragraph (c)(ii)(C) of the definition of rules in section 1 of Part 1 of Schedule 1 shall apply.
 67.Approval of rules or amendments to rules of recognized exchange controller
 (1)Subject to subsection (7), no rule (whether or not made under section 66) of a recognized exchange controller or any amendment thereto shall have effect unless it has the approval in writing of the Commission.
 (2)A recognized exchange controller shall submit or cause to be submitted to the Commission—
 (a)for its approval the rules and every amendment thereto that require approval under subsection (1), together with explanations of their purpose and likely effect, including their effect on the investing public, in sufficient detail to enable the Commission to decide whether to approve them or refuse to approve them; and
 (b)for its information the rules which belong to a class the subject of a declaration under subsection (7) and every amendment to the rules, as soon as reasonably practicable after they have been made.
 (3)The Commission shall, not later than 6 weeks after the receipt of a submission under subsection (2)(a) from a recognized exchange controller, by notice in writing served on the controller, give its approval or refuse to give its approval (together with its reasons for the refusal) to the rules or amendment of the rules (as the case may be) or any part thereof, the subject of the submission.
 (4)The Commission may give its approval under subsection (3) subject to requirements which shall be satisfied before the rules or amendment of the rules or any part thereof take effect.
 (5)The Commission may in a particular case, with the agreement of the recognized exchange controller concerned, extend the time prescribed in subsection (3).
 (6)The Financial Secretary may, after consultation with the Commission and the recognized exchange controller concerned, extend the time prescribed in subsection (3).
 (7)The Commission may, by notice published in the Gazette, declare any class of rules of a recognized exchange controller to be a class of rules which are not required to be approved under subsection (1) and, accordingly, any rules of the controller which belong to that class (including any amendment thereto) shall have effect notwithstanding that they have not been so approved.
 (8)Neither the rules under section 66(1) nor a notice under subsection (7) is subsidiary legislation.
 68.Transfer and resumption of functions of Commission
 (1)The Commission may request the Chief Executive in Council to transfer, by order (transfer order) published in the Gazette, to a recognized exchange controller (designated exchange controller), a function to which this section applies, if the Commission is satisfied that the designated exchange controller is willing and able to perform the function.
 (2)This section applies to a function of the Commission under—
 (a)Part V;
 (b)section 145;(Amended 28 of 2012 ss. 912 & 920)
 (c)Parts II and XII of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32); and (Replaced 28 of 2012 ss. 912 & 920)
 (d)Part 5 of the Companies Ordinance (Cap. 622). (Added 28 of 2012 ss. 912 & 920)
 (3)A function to which this section applies may be transferred by a transfer order either in whole or in part, and the transfer may be subject to—
 (a)a reservation that the Commission is to perform the function concurrently with the designated exchange controller; and
 (b)such other conditions as the Commission considers appropriate.
 (4)A transfer order may contain such incidental, supplemental and consequential provisions as may be necessary or expedient for the purpose of giving full effect to the order.
 (5)The Commission shall not request that a transfer order be made in respect of the making of financial resources rules unless the proposed designated exchange controller has first supplied the Commission with a draft of the financial resources rules which it proposes to make, and the Commission is satisfied that the rules, if made, will afford the investing public an adequate level of protection.
 (6)The Commission may at the request or with the consent of a designated exchange controller resume a function transferred by a transfer order, but the resumption takes effect only by order of the Chief Executive in Council.
 (7)The Chief Executive in Council may order that the Commission resume a function transferred to a designated exchange controller by a transfer order if the Commission so requests and if it appears to the Chief Executive in Council to be in the public interest to do so.
 (8)A transfer order may provide for a designated exchange controller to retain all or any of the fees payable in relation to the performance of a transferred function, and an order made under subsection (6) or (7) may provide for the Commission to retain all or any such fees, from a date specified in the order.
 69.Chairman of recognized exchange controller
 (1)No person shall be the chairman of a company which is a recognized exchange controller unless he has the approval in writing of the Chief Executive to hold that office.
 (2)Where the Chief Executive is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 he may, by notice in writing served on a person who is the chairman of a recognized exchange controller, remove the person from that office with effect from a date specified in the notice for the purpose.
 70.Appointment of chief executive or chief operating officer of recognized exchange controller requires approval of Commission
 (1)No appointment of a person as chief executive or chief operating officer of a company which is a recognized exchange controller shall have effect unless the appointment has the approval in writing of the Commission.
 (2)Where the Commission, after consultation with the Financial Secretary and the chairman of a recognized exchange controller, is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 it may, by notice in writing served on a person who is the chief executive or chief operating officer of the controller, remove the person from that office with effect from a date specified in the notice for the purpose.
 (3)A notice served under subsection (2) shall take effect immediately.
 71.Production of records, etc. by recognized exchange controller
 (1)The Commission may, by notice in writing served on a recognized exchange controller, require the controller to provide to the Commission, within such period as the Commission may specify in the notice—
 (a)such books and records kept by it—
 (i)in connection with or for the purposes of its business;
 (ii)in respect of any trading in securities or futures contracts traded on the stock market or futures market operated by the recognized exchange company of which it is a controller, or through the facilities of that company;
 (iia)in respect of any trading in OTC derivative products traded through the facilities of the recognized exchange company of which it is a controller; or (Added 6 of 2014 s. 8)
 (iii)in respect of any clearing and settlement arrangements for any transactions in securities, futures contracts or OTC derivative products cleared or settled through the facilities of the recognized clearing house of which it is a controller; and (Amended 6 of 2014 s. 8)
 (b)such other information relating to its business or any such trading or clearing and settlement arrangements,
 as the Commission may reasonably require for the performance of its functions.
 (2)A recognized exchange controller served with a notice under subsection (1) which, without reasonable excuse, fails to comply with the notice commits an offence and is liable on conviction to a fine at level 5.
 72.Withdrawal of recognition of exchange controller
 (1)Subject to subsection (2), where the Commission is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the proper regulation of markets in securities or futures contracts,
 it may, with the consent in writing of the Financial Secretary, by notice in writing served on a recognized exchange controller stating the reasons in support of the ground or grounds for the notice—
 (i)withdraw the company’s recognition as an exchange controller with effect from a date specified in the notice for the purpose; or
 (ii)direct the company to take such steps as are specified in the notice—
 (A)for the purpose of causing the company to cease to be such controller; and
 (B)within such period as is specified in the notice for the purpose.
 (2)The Commission shall not exercise its power under subsection (1) in relation to a recognized exchange controller unless it has given the controller a reasonable opportunity of being heard.
 (3)Without limiting the generality of steps referred to in subsection (1)(ii) which may be specified in a notice under that subsection to be served on a company referred to in that subsection, such steps may consist in whole or in part of steps proposed in writing to the Commission by that company.
 (4)The steps specified in a notice under subsection (1)(ii) may be framed so as to afford the company on which the notice is served a choice between different ways of ceasing to be a controller of the recognized exchange company or recognized clearing house concerned.
 (5)Where the Commission withdraws a company’s recognition as an exchange controller under subsection (1)(i), it shall cause notice of that fact to be published in the Gazette.
 (6)A notice served under subsection (1) shall not take effect—
 (a)subject to paragraph (b), until the expiration of the period within which an appeal against the notice may be made under section 73; or
 (b)if an appeal against the notice is made under section 73, until the appeal is withdrawn, abandoned or determined.
 (7)Subject to subsection (8), a company served with a notice under subsection (1) which fails to comply with the notice commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (8)It is a defence for a person charged with an offence under subsection (7) to prove that the person exercised reasonable diligence to comply with the notice concerned under subsection (1) served on the person.
 (9)Where a company served with a notice under subsection (1) fails to comply with the notice (and whether or not the company is charged with an offence under subsection (7) in relation to the failure), the provisions of Part 6 of Schedule 3 shall immediately apply.
 73.Appeals
 (1)A person served with a notice under section 59(9)(c), 61(9)(b), 70(2), 72(1) or 75(1) may appeal against the notice to the Chief Executive in Council not later than 14 days after the date of service of the notice or such longer period (if any) as the Commission specifies in the notice.
 (2)The decision of the Chief Executive in Council on an appeal under subsection (1) shall be final.
 74.Provisions applicable where recognized exchange controller, etc. seeks to be listed corporation
 (1)A relevant recognized exchange controller, or a relevant corporation, shall not become a listed corporation unless and until the Commission states in writing that it is satisfied that—
 (a)subject to subsection (2), rules made under section 23 adequately deal with possible conflicts of interest that might arise if the relevant recognized exchange controller or relevant corporation (as the case may be) were to be a listed corporation; and
 (b)the relevant recognized exchange controller or relevant corporation (as the case may be) has entered into arrangements with the Commission that adequately ensure—
 (i)the integrity of the market in securities or futures contracts traded on the stock market or futures market operated by the recognized exchange company concerned or through the facilities of that recognized exchange company; and
 (ii)the compliance with obligations as a listed corporation which would fall on the relevant recognized exchange controller or relevant corporation (as the case may be) if it were to become a listed corporation.
 (2)Rules referred to in subsection (1)(a) shall make provision to the effect that the Commission shall, instead of the Stock Exchange Company, take all actions and make all decisions in relation to the relevant recognized exchange controller or relevant corporation that would be taken by the Stock Exchange Company in the case of a corporation that was neither a recognized exchange controller nor a relevant corporation except in the case of any action or decision in respect of which the Commission states in writing that it is satisfied that a conflict of interest will not arise if that action or decision were to be taken or made (as the case may be) by the Stock Exchange Company.
 (3)By virtue of this section, the Commission shall have such functions as are provided for it under—
 (a)rules made for the purposes of subsections (1)(a) and (2);
 (b)arrangements referred to in subsection (1)(b).
 (4)Where a fee is payable to the Stock Exchange Company by a person for the taking of an action or the making of a decision which may be taken or made (as the case may be) by the Commission by virtue of subsections (1)(a) and (2), then, notwithstanding any other enactment or rule of law, that person shall pay that fee to the Commission in any case where the Commission takes that action or makes that decision (as the case may be) by virtue of those subsections.
 75.Commission may give directions to recognized exchange controller where it is satisfied that conflict of interest exists, etc.
 (1)Where the Commission is satisfied that—
 (a)a conflict of interest exists or may come into existence between—
 (i)the interest of a recognized exchange controller or a relevant corporation; and
 (ii)the interest of the proper performance of the functions conferred by this or any other Ordinance (including any rules made under any Ordinance, whether or not they are subsidiary legislation) on the controller or the relevant corporation; or
 (b)such a conflict of interest has existed in circumstances that make it likely that the conflict of interest will continue or be repeated,
 then the Commission may, by notice in writing served on the controller or relevant corporation (as the case may be) stating the reasons in support of the ground or grounds for the notice, direct the controller or relevant corporation (as the case may be) to forthwith take such steps as are specified in the notice (including steps in relation to any of its affairs, business and property whatsoever) for the purposes of remedying the conflict of interest or the matters occasioning the conflict of interest (as the case may be).
 (2)A notice served under subsection (1) shall take effect immediately.
 (3)A recognized exchange controller or relevant corporation served with a notice under subsection (1) which, without reasonable excuse, fails to comply with the notice commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 76.Fees to be approved by Commission
 (1)No fee imposed on or after the commencement of this section by—
 (a)a recognized exchange controller in its capacity as a recognized exchange controller; or
 (b)a recognized exchange company or recognized clearing house—
 (i)of which the recognized exchange controller is a controller; and
 (ii)in its capacity as a recognized exchange company or recognized clearing house (as the case may be),
 shall have effect unless the fee is specified in the rules of the recognized exchange controller, recognized exchange company or recognized clearing house (as the case may be) and has the approval in writing of the Commission.
 (2)The Commission shall, in deciding whether or not to approve a fee referred to in subsection (1), have regard to, among other matters—
 (a)the level of competition (if any) in Hong Kong for the matter for which the fee is to be imposed; and
 (b)the level of fee (if any) imposed by another recognized exchange controller, recognized exchange company or recognized clearing house or any similar body outside Hong Kong, for the same or a similar matter to which the fee relates.
 77.Financial Secretary may appoint not more than 8 persons to board of directors of HKEC
 (1)Notwithstanding any enactment or rule of law but subject to subsection (2), the Financial Secretary may appoint not more than 8 persons to be members of the board of directors of the HKEC where the Financial Secretary is satisfied that it is appropriate to do so in the interest of the investing public or in the public interest.
 (2)The Financial Secretary shall exercise his power under subsection (1) in such a way that immediately following the annual general meeting of the HKEC held in 2003 and thereafter, the number of members of its board of directors who are such members by virtue of an appointment under that subsection is not more than the maximum number of members of that board who may be such members otherwise than by virtue of such an appointment (but excluding the chief executive of the HKEC).
 (3)Subject to subsection (4), a member of the board of directors of the HKEC who is such a member by virtue of an appointment under subsection (1) shall have the same rights, privileges, obligations and liabilities under any enactment or rule of law as a member of that board who is such a member otherwise than by virtue of such an appointment.
 (4)Notwithstanding any enactment or rule of law, no person appointed under subsection (1) as a member of the board of directors of the HKEC may be removed from that office by a resolution of the other directors of the board or a special resolution of the HKEC.
 (5)In this section, HKEC (交易結算公司) means the company incorporated, and registered by the name Hong Kong Exchanges and Clearing Limited, under the relevant Ordinance. (Amended 28 of 2012 ss. 912 & 920)
 78.Amendment of Schedule 3
 The Chief Executive in Council may, by order published in the Gazette, amend Parts 2, 3, 4, 6, 7 or 8 of Schedule 3.
 Division 5Investor compensation companies
 79.Recognition of investor compensation company
 (1)Where the Commission is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest; or
 (b)for the facilitation of the management and administration of the compensation fund under Part XII,
 it may, after consultation with the Financial Secretary, by notice in writing served on a company, recognize the company as an investor compensation company—
 (i)subject to such conditions as it considers appropriate specified in the notice; and
 (ii)with effect from a date specified in the notice for the purpose.
 (2)Without limiting the generality of conditions which may be specified in a notice under subsection (1), the Commission may, by notice in writing served on a recognized investor compensation company, amend or revoke any condition specified in the first-mentioned notice or impose new conditions, where the Commission—
 (a)is satisfied that it is appropriate to do so on a ground specified in paragraph (a) or (b) of that subsection; and
 (b)has consulted the Financial Secretary.
 (3)Where the Commission amends or revokes any condition or imposes any new condition by a notice under subsection (2), the amendment, revocation or imposition takes effect at the time of service of the notice or at the time specified in the notice, whichever is the later.
 (4)Where a company becomes a recognized investor compensation company, the Commission shall cause notice of that fact to be published in the Gazette.
 (5)Where a company is seeking to be a recognized investor compensation company and the Commission is minded not to recognize the company under subsection (1), the Commission shall give the company a reasonable opportunity of being heard before making a decision not to recognize the company.
 (6)Where the Commission refuses to recognize a company as an investor compensation company under subsection (1), the Commission shall, by notice in writing served on the company, inform the company of the refusal and of the reasons for it.
 80.Transfer and resumption of functions of Commission
 (1)The Commission may request the Chief Executive in Council to transfer, by order (transfer order) published in the Gazette, to a recognized investor compensation company (designated investor compensation company), a function to which this section applies, if the Commission is satisfied that the designated investor compensation company is willing and able to perform the function.
 (2)This section applies to a function of the Commission under Part XII (other than sections 240(4) and (9) and 244(2)) or rules made under that Part.
 (3)For the purposes of subsection (2), the function of the Commission under Part XII to maintain the compensation fund includes a function to maintain all or any part of the compensation fund, and the other provisions of this Ordinance shall apply accordingly.
 (4)A function to which this section applies may be transferred by a transfer order either in whole or in part, and the transfer may be subject to—
 (a)a reservation that the Commission is to perform the function concurrently with the designated investor compensation company; and
 (b)such other conditions as the Commission considers appropriate.
 (5)A transfer order may contain such incidental, supplemental and consequential provisions as may be necessary or expedient for the purpose of giving full effect to the order.
 (6)The Commission may at the request or with the consent of a designated investor compensation company resume a function transferred by a transfer order, but the resumption takes effect only by order of the Chief Executive in Council.
 (7)The Chief Executive in Council may order that the Commission resume a function transferred to a designated investor compensation company by a transfer order if the Commission so requests and if it appears to the Chief Executive in Council to be in the public interest to do so.
 81.Immunity, etc.
 (1)Without limiting the generality of section 380(1), no civil liability, whether arising in contract, tort, defamation, equity or otherwise, shall be incurred by—
 (a)a recognized investor compensation company; or
 (b)any person acting on behalf of a recognized investor compensation company, including—
 (i)any member of the board of directors of the company; or
 (ii)any member of any committee established by the company,
 in respect of anything done or omitted to be done in good faith in the discharge or purported discharge of the duties to which this subsection applies.
 (2)The duties to which subsection (1) applies are those—
 (a)that relate to or arise out of a function that has been transferred to the recognized investor compensation company under section 80; or
 (b)to which the company is subject under rules made under Part XII.
 82.Rules by recognized investor compensation company
 Without limiting any of its other powers to make rules, a recognized investor compensation company may make rules for such matters as are necessary or desirable—
 (a)for the proper and efficient management and operation of the company;
 (b)for the obtaining of such insurance, surety, guarantee or other security or the making of such financial arrangement by the company as may be necessary or appropriate for the purposes of its operation;
 (c)for the proper and efficient performance of a function transferred to the company under section 80.
 83.Approval of rules or amendments to rules of recognized investor compensation companies
 (1)Subject to subsection (7), no rule (whether or not made under section 82) of a recognized investor compensation company or any amendment thereto shall have effect unless it has the approval in writing of the Commission.
 (2)A recognized investor compensation company shall submit or cause to be submitted to the Commission—
 (a)for its approval the rules and every amendment thereto that require approval under subsection (1), together with explanations of their purpose and likely effect, including their effect on the investing public, in sufficient detail to enable the Commission to decide whether to approve them or refuse to approve them; and
 (b)for its information the rules which belong to a class the subject of a declaration under subsection (7) and every amendment to the rules, as soon as reasonably practicable after they have been made.
 (3)The Commission shall, not later than 6 weeks after the receipt of a submission under subsection (2)(a) from a recognized investor compensation company, by notice in writing served on the company, give its approval or refuse to give its approval (together with its reasons for the refusal) to the rules or amendment of the rules (as the case may be) or any part thereof, the subject of the submission.
 (4)The Commission may give its approval under subsection (3) subject to requirements which shall be satisfied before the rules or amendment of the rules or any part thereof take effect.
 (5)The Commission may in a particular case, with the agreement of the recognized investor compensation company concerned, extend the time prescribed in subsection (3).
 (6)The Financial Secretary may, after consultation with the Commission and the recognized investor compensation company concerned, extend the time prescribed in subsection (3).
 (7)The Commission may, by notice published in the Gazette, declare any class of rules of a recognized investor compensation company to be a class of rules which are not required to be approved under subsection (1) and, accordingly, any rules of the company which belong to that class (including any amendment thereto) shall have effect notwithstanding that they have not been so approved.
 (8)A recognized investor compensation company shall make its rules available to the public in a manner approved by the Commission.
 (9)Neither the rules under section 82 nor a notice under subsection (7) is subsidiary legislation.
 84.Production of records, etc. by recognized investor compensation company
 (1)The Commission may, by notice in writing served on a recognized investor compensation company, require the company to provide to the Commission, within such period as the Commission may specify in the notice—
 (a)such books and records kept by it in connection with or for the purposes of its business or in respect of the management and administration of the compensation fund under Part XII; and
 (b)such other information relating to its business or the management and administration of the compensation fund under Part XII,
 as the Commission may reasonably require for the performance of its functions.
 (2)A recognized investor compensation company served with a notice under subsection (1) which, without reasonable excuse, fails to comply with the notice commits an offence and is liable on conviction to a fine at level 5.
 85.Withdrawal of recognition of investor compensation company
 (1)Subject to subsections (3), (4) and (5), the Commission may, after consultation with the Financial Secretary, by notice in writing served on a recognized investor compensation company, withdraw the company’s recognition as an investor compensation company with effect from a date specified in the notice for the purpose.
 (2)The Commission may by the notice served under subsection (1) permit the recognized investor compensation company to continue, on or after the date on which the withdrawal is to take effect, to carry on such activities affected by the withdrawal as the Commission may specify in the notice for the purpose of—
 (a)closing down the operations of the company; or
 (b)protecting the interest of the investing public or the public interest.
 (3)The Commission may only serve a notice under subsection (1) in relation to a recognized investor compensation company that—
 (a)fails to comply with any requirement of this Ordinance or with a condition imposed under section 79;
 (b)is being wound up;
 (c)ceases to perform any function transferred to it under section 80; or
 (d)requests the Commission to do so.
 (4)Except where responding to a request under subsection (3)(d), the Commission shall not exercise its power under subsection (1) in relation to a recognized investor compensation company unless it has given the company a reasonable opportunity of being heard.
 (5)Except where responding to a request under subsection (3)(d), the Commission shall give the recognized investor compensation company not less than 14 days’ notice in writing of its intention to serve a notice under subsection (1) and the grounds for doing so.
 (6)Where the Commission withdraws a company’s recognition as an investor compensation company under subsection (1), it shall cause notice of that fact to be published in the Gazette.
 (7)A notice served under this section shall take effect immediately.
 86.Appeals
 (1)A company served with a notice under section 85(1) may appeal against the notice to the Chief Executive in Council not later than 14 days after the date of service of the notice or such longer period (if any) as the Commission specifies in the notice.
 (2)The decision of the Chief Executive in Council on an appeal under subsection (1) shall be final.
 87.Subrogation of recognized investor compensation company to rights, etc. of claimant on payment from compensation fund
 (1)Where a recognized investor compensation company makes any payment out of the compensation fund in respect of any claim made under rules made under Part XII—
 (a)subject to subsection (1A), the company shall be subrogated, to the extent which that payment bears to the loss sustained (without taking into account any compensation paid or payable out of the compensation fund for the loss) by the claimant by reason of the default on which the claim was based, to all the rights and remedies of the claimant in relation to the loss; and (Amended 7 of 2004 s. 55)
 (b)the respective rights of the claimant and the company in bankruptcy or winding up or by legal proceedings or otherwise to receive in respect of the loss—
 (i)any sum out of the assets of the person concerned who is in default; or
 (ii)any property held on trust by that person for the claimant,
 shall rank equally.
 (1A)The company is not subrogated to any rights and remedies of the claimant in respect of compensation from the Deposit Protection Scheme Fund established by section 14 of the Deposit Protection Scheme Ordinance (Cap. 581). (Added 7 of 2004 s. 55)
 (2)All assets (whether in cash or otherwise) recovered by the recognized investor compensation company under subsection (1) shall be dealt with in such manner as the Commission may direct and shall become part of the compensation fund.
 88.Financial statements of a recognized investor compensation company
 (1)Subject to subsection (3), a recognized investor compensation company shall—
 (a)prepare such financial statements and other documents, for such periods, as are prescribed by rules made under section 397 for the purposes of this section; and
 (b)submit the financial statements and other documents, together with an auditor’s report, to the Commission not later than 4 months after the end of the financial year to which they relate.
 (2)Without limiting the generality of subsection (1), the requirements under that subsection relating to the financial statements and other documents, and the auditor’s report, referred to in that subsection include the requirements that—
 (a)the financial statements and other documents are to relate to such matters and contain such particulars as are prescribed by rules made under section 397 for the purposes of this section;
 (b)the auditor’s report is to contain such particulars, including such statement of opinion, as are prescribed by the rules;
 (c)the financial statements and other documents, and the auditor’s report, are to be prepared in accordance with such principles or bases as are prescribed by the rules; and
 (d)without limiting the generality of section 387 of the Companies Ordinance (Cap. 622), the financial statements and other documents are to be signed by the chief executive officer of the recognized investor compensation company, by which they are prepared. (Amended 28 of 2012 ss. 912 & 920)
 (3)On an application in writing by the recognized investor compensation company by which any financial statements and other documents, and any auditor’s report, are required under subsection (1) to be submitted, the Commission may, where it is satisfied that there are special reasons for so doing, extend the period within which the financial statements and other documents, and the auditor’s report, are required to be submitted, for such period and subject to such conditions as the Commission considers appropriate, and upon the Commission granting the extension, subsection (1) shall apply subject to the extension accordingly.
 (4)A recognized investor compensation company shall cause a copy of each of the financial statements and other documents and the auditor’s report that are required under subsection (1) to be submitted by it to be sent to the Financial Secretary and to be published in the Gazette.
 (5)A reference in this section to financial statements shall not be construed as including a reference to financial statements of the compensation fund.
 89.Employees of and delegations by a recognized investor compensation company
 (1)The Commission may arrange for any of its officers, employees, agents or consultants to assist in the operations of a recognized investor compensation company.
 (2)A recognized exchange company or recognized exchange controller may, with the consent of a recognized investor compensation company, arrange for any of its officers, employees, agents or consultants to assist in the operations of that recognized investor compensation company.
 (3)A recognized investor compensation company may by resolution and subject to the approval of the Commission, with or without restrictions or conditions as the company considers appropriate, delegate in writing to any person any of its powers and duties other than its power under section 82.
 90.Further activities of recognized investor compensation company
 (1)A recognized investor compensation company may, in addition to performing a function transferred to it under section 80, conduct such activities or businesses as may be approved in writing by the Commission.
 (2)The Commission shall not approve the conduct of any activities or businesses referred to in subsection (1) unless it is satisfied that such activities or businesses are incidental to the management or administration of the compensation fund under Part XII.
 Division 6General—Exchange companies, clearing houses, exchange controllers and investor compensation companies
 91.Supply of information
 (1)The Commission, a recognized exchange company, a recognized clearing house, a recognized exchange controller or a recognized investor compensation company shall be entitled to supply each other with information about its affairs and—
 (a)in the case of a recognized exchange company, the affairs of any of its exchange participants;
 (b)in the case of a recognized clearing house, the affairs of any of its clearing participants;
 (c)in the case of a recognized exchange controller, the affairs of any of its subsidiaries; or
 (d)in the case of a recognized investor compensation company, any claim made against the compensation fund,
 if the supply of information is reasonably required for the performance of—
 (i)in the case where the information is supplied to the Commission, the functions of the Commission under the relevant provisions; or
 (ii)in any other cases, the functions of the recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company to which the information is supplied, under this Part or their respective rules.
 (2)The Commission may, by notice in writing served on a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company, require it to supply the Commission with such information as the Commission may reasonably require for the performance of the functions of the Commission under any of the relevant provisions, including information in its possession relating to—
 (a)in the case of a recognized exchange company, the affairs of any of its exchange participants;
 (b)in the case of a recognized clearing house, the affairs of any of its clearing participants;
 (c)in the case of a recognized exchange controller, the affairs of any of its subsidiaries; or
 (d)in the case of a recognized investor compensation company, any claim made against the compensation fund.
 (3)The supply of information under subsection (1) or (2) shall not be treated as publication for the purposes of the law of defamation and, without limiting the generality of section 380(3) but subject to section 378, a person supplying the information does not incur liability as a consequence thereof.
 (4)Where any information is supplied under subsection (1) to a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company, the company concerned, the clearing house or the controller to whom the information is supplied shall not disclose the information, or any part of it, to any other person without the consent of the Commission.
 92.Additional powers of Commission—restriction notices
 (1)Subject to subsections (2), (6) and (14), where the Commission is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest;
 (b)for the protection of investors; or
 (c)for the proper regulation of a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company,
 it may by notice in writing (restriction notice) served on the exchange company, clearing house, exchange controller or investor compensation company do any or all of the following—
 (i)require the exchange company, clearing house, exchange controller or investor compensation company before the expiry of a period specified in the notice—
 (A)to amend, supplement, withdraw or revoke, in the manner specified in the notice, a provision of its rules or other instrument so specified;
 (B)to take such action relating to the management, conduct or operation of its business as may be so specified;
 (ii)prohibit the exchange company, clearing house, exchange controller or investor compensation company from doing, during a period so specified, such act or other thing relating to the management, conduct or operation of its business as may be so specified.
 (2)The Commission shall not serve a restriction notice unless—
 (a)it has previously consulted the Financial Secretary in relation to the notice;
 (b)it has previously requested in writing the exchange company, clearing house, exchange controller or investor compensation company concerned to put, or cause to be put, into effect a provision (which includes a request to refrain from doing any act or other thing) specified in the request and similar in effect to the requirement or prohibition specified in the restriction notice or, where there is more than one such requirement or prohibition so specified, provisions the combined effect of all of which is similar to the combined effect of the requirements or prohibitions so specified; and
 (c)in the case of a request under paragraph (b) which—
 (i)contains a provision requesting the exchange company, clearing house, exchange controller or investor compensation company concerned to amend, supplement, withdraw or revoke any provision of its constitution under subsection (1)(i), the provision has not been complied with before the expiration of the period specified in relation thereto in the request being not less than 45 days; or
 (ii)contains a provision requesting the exchange company, clearing house, exchange controller or investor compensation company concerned to do or refrain from doing any act or other thing, the Commission is satisfied that the provision has not been complied with.
 (3)A recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company may appeal to the Chief Executive in Council against a restriction notice that requires the exchange company, clearing house, exchange controller or investor compensation company to amend, supplement, withdraw or revoke any provision of its constitution.
 (4)The decision of the Chief Executive in Council on an appeal under subsection (3) shall be final.
 (5)A restriction notice served under this section shall take effect immediately.
 (6)A period specified in a restriction notice in relation to a prohibition under subsection (1)(ii) shall not exceed 6 months beginning on the date of the notice.
 (7)The Commission may, after consultation with the Financial Secretary, by notice in writing served on the exchange company, clearing house, exchange controller or investor compensation company concerned, extend, for a period or successive periods of not more than 3 months each, the period during which a restriction notice is to remain in force.
 (8)Where a restriction notice is issued or extended under this section, the Commission may publish in the Gazette a copy of the notice or, as may be appropriate, particulars of the extension.
 (9)A restriction notice may, on the application of the Commission to the Court of First Instance, be enforced by an order of the Court as if it were a judgment or order of the Court.
 (10)Where a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company is in breach of a requirement in a restriction notice under subsection (1)(i)(A) relating to a provision of its rules or other instrument—
 (a)in the case of a requirement to amend or supplement such provision, the provision shall be deemed to have effect as if the requirement had been complied with; or
 (b)in the case of a requirement to withdraw or revoke such provision, the provision ceases to have effect.
 (11)Where—
 (a)a restriction notice includes a requirement described in subsection (1)(i)(A) and the requirement relates to the constitution of a company; and
 (b)by virtue of subsection (10) the provision to which the requirement relates has effect as if the requirement had been complied with or has ceased to have effect (as the case may be),
 the Commission shall, as soon as may be, deliver to the Registrar of Companies a copy of the notice.
 (12)If there is an appeal under subsection (3) against the notice and the appeal is not withdrawn, the Commission shall, as soon as may be, inform the Registrar of Companies in writing of the outcome of the appeal.
 (13)Without limiting the generality of section 380(1), no civil liability, whether arising in contract, tort, defamation, equity or otherwise, shall be incurred by—
 (a)a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company;
 (b)an officer or employee of a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company;
 (c)an exchange participant; or
 (d)a clearing participant,
 in respect of anything done or omitted to be done in good faith in compliance or purported compliance with a restriction notice.
 (14)This section shall not be construed as enabling the Commission to do under this section anything which may be done by the Commission by direction under section 28(1)(b) or 29.
 93.Additional powers of Commission—suspension orders
 (1)Where the Commission is satisfied that it is appropriate to do so—
 (a)in the interest of the investing public or in the public interest;
 (b)for the protection of investors; or
 (c)for the proper regulation of a recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company,
 it may, after consultation with the Financial Secretary, make an order (suspension order) relating to all or any of the following—
 (i)the functions of the board of directors or governing body of the exchange company, clearing house, exchange controller or investor compensation company;
 (ii)the functions of a director of a board or a member of a body referred to in paragraph (i);
 (iii)the functions of a committee, including a sub-committee, established by a board or body referred to in paragraph (i);
 (iv)the functions of the chief executive officer (by whatever name called) of the exchange company, clearing house, exchange controller or investor compensation company.
 (2)While a suspension order is in force the following provisions apply—
 (a)neither the recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company to which the order relates nor any board, governing body, committee or officer of it shall perform a function to which the order relates;
 (b)a function to which paragraph (a) applies may be performed by the person specified in the order in relation to that function;
 (c)a person referred to in paragraph (a) shall not, by act or omission, either directly or indirectly, affect the manner in which a function referred to in that paragraph is performed.
 (3)A recognized exchange company, recognized clearing house, recognized exchange controller or recognized investor compensation company may appeal to the Chief Executive in Council against a suspension order made in respect of the exchange company, clearing house, exchange controller or investor compensation company.
 (4)The decision of the Chief Executive in Council on an appeal under subsection (3) shall be final.
 (5)Subject to subsection (9), a suspension order shall continue in force for the period not exceeding 6 months specified in the order.
 (6)A suspension order or an extension of it under subsection (9) shall take effect when a copy of the order or notice of the extension is served under subsection (10)(a) on the exchange company, clearing house, exchange controller or investor compensation company to which the order relates.
 (7)Where a suspension order is made or extended under this section, the Commission shall, as soon as reasonably practicable to do so, give a copy of a suspension order or, as may be appropriate, notice of its extension to the chief executive officer of the exchange company, clearing house, exchange controller or investor compensation company to which the order relates and to the directors or members of its committee (if any) as the Commission considers appropriate in the circumstances.
 (8)Nothing in subsection (7) affects subsection (6).
 (9)The Commission may, after consultation with the Financial Secretary, extend for a period or successive periods of not more than 3 months each the period during which a suspension order is to remain in force.
 (10)Where a suspension order is made or extended under this section, the Commission shall—
 (a)forthwith serve a copy of the order or notice in writing of the extension on the exchange company, clearing house, exchange controller or investor compensation company to which the order relates; and
 (b)publish in the Gazette and publish through at least one other medium a copy of the suspension order or, as may be appropriate, notice of its extension.
 (11)A suspension order may, on the application of the Commission to the Court of First Instance, be enforced by an order of the Court as if it were a judgment or order of the Court.
 (12)The exchange company, clearing house, exchange controller or investor compensation company concerned shall pay to the Commission on demand costs and expenses reasonably incurred by the Commission or a member or employee of the Commission in connection with a suspension order.
 (13)The amount of the costs and expenses demanded under subsection (12) are recoverable by the Commission as a civil debt.
 (14)A person who knowingly contravenes subsection (2)(c) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 94.Application of Companies Ordinance and Companies (Winding Up and Miscellaneous Provisions) Ordinance
 (Amended 28 of 2012 ss. 912 & 920)
 Where there is any inconsistency between this Part and the Companies Ordinance (Cap. 622) or the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) in its application to a recognized exchange company, a recognized clearing house, a recognized exchange controller or a recognized investor compensation company, this Part prevails.
 (Amended 28 of 2012 ss. 912 & 920)
 Division 7Automated trading services
 95.Authorization for providing automated trading services
 (1)No person shall—
 (a)provide automated trading services; or
 (b)offer to provide automated trading services,
 unless that person—
 (i)is authorized under subsection (2);
 (ii)is an employee or agent of a person authorized under subsection (2), and is acting in that capacity for or on behalf of that person;
 (iii)is an intermediary licensed or registered for Type 7 regulated activity;
 (iv)is a licensed representative for Type 7 regulated activity, and is acting in that capacity for the licensed corporation to which the representative is accredited; or
 (v)is an individual whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged in respect of Type 7 regulated activity by a registered institution registered for that regulated activity, and is acting in that capacity for the registered institution.
 (2)Where the Commission is satisfied that it is appropriate to do so, the Commission may upon application by a person, by notice in writing served on that person, authorize that person to provide automated trading services—
 (a)subject to such conditions as it considers appropriate specified in the notice; and
 (b)with effect from a date specified in the notice for the purpose.
 (3)Where a person is granted an authorization under subsection (2), the Commission shall cause notice of that fact to be published in the Gazette.
 (4)Where a person is seeking an authorization to provide automated trading services and the Commission is minded not to grant the authorization under subsection (2), the Commission shall give the person a reasonable opportunity of being heard before making a decision not to grant the authorization.
 (5)Where the Commission refuses to authorize a person to provide automated trading services under subsection (2), the Commission shall, by notice in writing served on the person, inform the person of the refusal and of the reasons for it.
 (6)The Commission shall prepare and publish in the Gazette or otherwise guidelines setting out the principles, procedures and standards in relation to authorization for providing automated trading services under this section.
 (7)Guidelines published under subsection (6) are not subsidiary legislation.
 (8)Subject to subsection (9), for the purposes of subsection (1)(b), a person offers to provide automated trading services only if the services are actively marketed, whether in Hong Kong or elsewhere, to persons in Hong Kong by the first-mentioned person or by another person on his behalf.
 (9)For the purposes of subsection (1)(b), a person shall not be regarded as offering to provide automated trading services if the persons to whom the offer is made are persons to whom the first-mentioned person or a related corporation thereof, at any time during the period of 3 years immediately preceding the day on which the offer is made, has provided or has agreed to provide any financial services, including automated trading services.
 96.Application for authorization
 (1)An application under section 95(2) shall be accompanied by—
 (a)such information and particulars as the Commission may reasonably require; and
 (b)an application fee prescribed by rules made under section 395 for the purposes of this section.
 (2)Without limiting the generality of subsection (1)(a), an application under section 95(2) shall also be accompanied by such information as may reasonably be required by the Commission regarding—
 (a)the services and facilities which the applicant will hold itself out as being able to provide if the application is allowed;
 (b)the business which the applicant proposes to carry on and to which the application relates, and any person whom the applicant proposes to employ or with whom the applicant intends to be associated in the course of carrying on the business;
 (c)the business which the applicant is carrying on, the officers it employs and the persons with whom the applicant is associated in the course of carrying on the business; and
 (d)its directors and substantial shareholders and, if any of its substantial shareholders is a corporation, the directors and substantial shareholders of that corporation.
 (3)In considering an application under section 95(2), the Commission may have regard to any information in its possession whether provided by the applicant or not.
 97.Conditions for authorization
 (1)Without limiting the generality of conditions which may be specified in a notice under section 95(2), the Commission may, by notice in writing served on a person authorized under that section, amend or revoke any conditions specified under that section or impose new conditions, where the Commission is satisfied that it is appropriate to do so.
 (2)Where the Commission amends or revokes any condition or imposes any new condition under subsection (1), the amendment, revocation or imposition takes effect at the time of service of the notice or at the time specified in the notice, whichever is the later.
 (3)Without limiting the generality of subsection (1) or section 95(2), a notice served thereunder may contain a condition that the person authorized to provide automated trading services shall comply with all or any of the following requirements, that is to say, the person shall—
 (a)provide the services according to rules approved by the Commission for the purpose;
 (b)ensure as far as is reasonably practicable that there is an orderly, informed and fair market in relation to all transactions which are carried out by means of or through the services;
 (c)ensure that the securities or futures contract, the sale or purchase of which is to be negotiated or concluded by means of or through the services, belongs to a class of securities or futures contracts specified in the notice by the Commission for this purpose;
 (d)ensure that the transaction that is to be novated, cleared, settled or guaranteed by means of or through the services belongs to a class of transactions specified in the notice by the Commission for this purpose;
 (e)disclose to the Commission within the time and in the manner specified in the notice, such information as the Commission may request for the purpose of performing its functions under this Ordinance;
 (f)permit any person authorized in that behalf by the Commission to enter at any reasonable time the premises on which the services are provided and to inspect the electronic facilities by means of which the services are provided;
 (g)provide and maintain automated systems with adequate capacity, facilities to meet contingencies or emergencies, security arrangements and technical support for the provision of the services;
 (h)notify the Commission of any changes to the information and particulars required by the Commission under section 96(1) or (2);
 (i)pay to the Commission a fee prescribed by rules made under section 395 for the purposes of this section.
 98.Withdrawal of authorization
 (1)Subject to subsection (4), where the Commission is satisfied that it is appropriate to do so in the interest of the investing public or in the public interest, it may, by notice in writing served on a person who has been granted an authorization under section 95(2), stating the reasons in support of the ground or grounds for the notice, withdraw the authorization with effect from a date specified in the notice for the purpose.
 (2)The Commission may by the notice served under subsection (1) permit the person to continue, on or after the date on which the withdrawal is to take effect, to carry on such activities affected by the withdrawal as the Commission may specify in the notice for the purpose of—
 (a)ceasing to provide the automated trading services to which the withdrawal relates; or
 (b)protecting the interest of the investing public or the public interest.
 (3)Where the Commission has granted a permission to a person under subsection (2), the person shall not, by reason of its carrying on the activities in accordance with the permission, be regarded as having contravened section 95.
 (4)The Commission shall not exercise its power under subsection (1) in relation to a person who has been granted an authorization under section 95(2) unless it has given the person a reasonable opportunity of being heard.
 (5)Where the Commission withdraws an authorization under subsection (1), it shall cause notice of that fact to be published in the Gazette.
 (6)A notice served under this section shall take effect immediately.
 99.Commission to maintain register of authorized automated trading services
 (1)The Commission shall maintain a register of authorized automated trading services in such form as it considers appropriate.
 (2)The register maintained under subsection (1) shall contain in relation to each person who has been granted an authorization under section 95(2)—
 (a)the name and business address of the person;
 (b)such conditions of the authorization as the Commission considers appropriate; and
 (c)such other particulars as are prescribed by rules made under section 397 for the purposes of this subsection.
 (3)The register may be maintained—
 (a)in a documentary form; or
 (b)by recording the information required under subsection (2) otherwise than in a legible form, so long as the information is capable of being reproduced in a legible form.
 (4)For the purposes of enabling any member of the public to ascertain whether he is dealing with a person who has been granted an authorization under section 95(2) in matters of or connected with any automated trading services and to ascertain the particulars of the authorization of such person, the register shall be made available for public inspection at all reasonable times.
 (5)At all reasonable times, a member of the public may—
 (a)inspect the register, or (where the register is maintained otherwise than in a documentary form) a reproduction of the information or the relevant part of it in a legible form; and
 (b)obtain a copy of an entry in or extract of the register on payment of a fee prescribed by rules made under section 395.
 (6)A document purporting to be—
 (a)a copy of an entry in or extract of the register maintained under this section; and
 (b)certified by an authorized officer of the Commission as a true copy of the entry or extract referred to in paragraph (a),
 shall be admissible as evidence of its contents in any legal proceedings.
 (7)Without derogating from the other provisions of this section, the Commission shall, in addition, cause the register to be available to the public in the form of an on-line record.
 100.Rules by Commission
 (1)Without prejudice to section 398(7) and (8), the Commission may make rules to—
 (a)require a person authorized to provide automated trading services to supply the Commission with such information as the Commission requires to satisfy the Commission that the conditions specified in a notice served on the person under section 95(2) or 97 are complied with;
 (b)provide for the time within which and the manner in which the information under paragraph (a) shall be provided;
 (c)provide for the regulation of automated trading services and any other matters incidental thereto.
 (2)Without limiting the generality of rules which may be made under subsection (1), such rules may—
 (a)provide for the standards of conduct and practices to be complied with in relation to the provision of automated trading services;
 (b)prohibit the use of misleading or deceptive advertisements in relation to the provision of automated trading services or impose conditions for the use of advertisements in relation to the provision of such services;
 (c)require a person authorized to provide automated trading services—
 (i)to take steps to avoid conflicts of interests, and specify the steps that shall be taken in the event that there is a potential or actual conflict of interest; and
 (ii)to take such steps as the Commission may specify to ensure that there is integrity, orderliness, transparency and fairness in transactions conducted through the services, including steps to ensure that—
 (A)a request for the services is to be dealt with properly and as expeditiously as is appropriate in the circumstances; and
 (B)access rights to the services and the relevant trading conventions relating to the transactions to be conducted through the services are properly explained to the persons to whom the services are provided;
 (d)provide for measures designed to discourage and identify any money laundering activities.
 (3)Rules made under this section may provide that a person who, without reasonable excuse, contravenes any specified provision of the rules that apply to the person commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine at level 6 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 3 and a term of imprisonment of 6 months.
 101.Providing automated trading services without authorization
 A person who, without reasonable excuse, contravenes section 95(1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $5,000,000 and to imprisonment for 7 years and, in the case of a continuing offence, to a further fine of $100,000 for every day during which the offence continues; or
 (b)on summary conviction to a fine of $500,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues.
 Part IIIA
 OTC Derivative Transactions
 (Part IIIA added 6 of 2014 s. 9)
 Division 1Interpretation
 101A.Interpretation of Part IIIA
 In this Part—
 clearing obligation (結算責任)—
 (a)in relation to a prescribed person that is an authorized financial institution incorporated in Hong Kong, means—
 (i)an obligation imposed by section 101C(1); or
 (ii)an obligation imposed by section 101C(3); and
 (b)in relation to any other prescribed person, means an obligation imposed by section 101C(1);
 clearing rules (《結算規則》) means rules made under section 101N;
 #deregistration (撤銷登記), in relation to a specific class, means the removal of—
 (a)a name under section 101V(1); or
 (b)an entry under section 101V(2);
 designated CCP (指定中央對手方), in relation to a class or description of specified OTC derivative transactions, means a person designated as a central counterparty under section 101J for that class or description;
 #designated trading platform (指定交易平台), in relation to a class or description of specified OTC derivative transactions, means a person designated as a trading platform under section 101K for that class or description;
 designation rules (《指定規則》) means rules made under section 101Q;
 #notification (具報) means a notification required to be given for the purposes of section 101R(2);
 #notification level (具報水平), in relation to a specific class, means the threshold prescribed—
 (a)for that specific class; and
 (b)by rules made under section 101Z(a)(i);
 #notification requirement (具報規定) means the requirement imposed by section 101R(2);
 #notification rules (《具報規則》) means rules made under section 101Z;
 prescribed fee (訂明費用) means a fee prescribed by rules made under section 395;
 prescribed manner (訂明方式)—
 (a)in relation to an application for designation as a central counterparty, means in the manner prescribed by rules made under section 101Q(a)(i); and
 #(b)in relation to an application for designation as a trading platform, means in the manner prescribed by rules made under section 101Q(a)(ii);
 prescribed person (訂明人士)—
 (a)in relation to the reporting obligation, means—
 (i)an authorized financial institution;
 (ii)an approved money broker;
 (iii)a licensed corporation; or
 (iv)a person of a class or description specified in the reporting rules as being subject to the reporting obligation;
 (b)in relation to the clearing obligation, means—
 (i)an authorized financial institution;
 (ii)an approved money broker;
 (iii)a licensed corporation; or
 (iv)a person of a class or description specified in the clearing rules as being subject to the clearing obligation;
 #(c)in relation to the trading obligation, means—
 (i)an authorized financial institution;
 (ii)an approved money broker;
 (iii)a licensed corporation; or
 (iv)a person of a class or description specified in the trading rules as being subject to the trading obligation; and
 (d)in relation to the record keeping obligation, means—
 (i)an authorized financial institution;
 (ii)an approved money broker;
 (iii)a licensed corporation; or
 (iv)a person of a class or description specified in the record keeping rules as being subject to the record keeping obligation;
 record keeping obligation (備存紀錄責任)—
 (a)in relation to a prescribed person that is an authorized financial institution incorporated in Hong Kong, means—
 (i)an obligation imposed by section 101E(1); or
 (ii)an obligation imposed by section 101E(3); and
 (b)in relation to any other prescribed person, means an obligation imposed by section 101E(1);
 record keeping rules (《備存紀錄規則》) means rules made under section 101P;
 #registered SIP (已登記系統重要參與者) means a person whose name appears on the SIP register;
 reporting obligation (匯報責任)—
 (a)in relation to a prescribed person that is an authorized financial institution incorporated in Hong Kong, means—
 (i)an obligation imposed by section 101B(1); or
 (ii)an obligation imposed by section 101B(3); and
 (b)in relation to any other prescribed person, means an obligation imposed by section 101B(1);
 reporting rules (《匯報規則》) means rules made under section 101L;
 #SIP register (系統重要參與者登記冊) means the register maintained under section 101S(1);
 #specific class (特定類別) means a particular class or description of OTC derivative transactions;
 specified OTC derivative transaction (指明場外衍生工具交易)—
 (a)in relation to the reporting obligation, means a transaction specified in the reporting rules for the purposes of that obligation;
 (b)in relation to the clearing obligation, means a transaction specified in the clearing rules for the purposes of that obligation;
 #(c)in relation to the trading obligation, means a transaction specified in the trading rules for the purposes of that obligation; and
 (d)in relation to the record keeping obligation, means a transaction specified in the record keeping rules for the purposes of that obligation;
 #systemically important participant (系統重要參與者) means a person—
 (a)to whom section 101R(1) applies; and
 (b)whose position in respect of a specific class has reached the notification level;
 #trading obligation (交易責任)—
 (a)in relation to a prescribed person that is an authorized financial institution incorporated in Hong Kong, means—
 (i)an obligation imposed by section 101D(1); or
 (ii)an obligation imposed by section 101D(3); and
 (b)in relation to any other prescribed person, means an obligation imposed by section 101D(1);
 #trading rules (《交易規則》) means rules made under section 101O;
 underlying subject matter (標的項目)—
 (a)in relation to a transaction in an OTC derivative product that falls within subsection (1)(a)(i) of section 1A of Part 1 of Schedule 1, means any type or combination of types of securities, commodity, index, property, interest rate, currency exchange rate or futures contract;
 (b)in relation to a transaction in an OTC derivative product that falls within subsection (1)(a)(ii) of section 1A of Part 1 of Schedule 1, means any basket of more than one type, or any combination of types, of securities, commodity, index, property, interest rate, currency exchange rate or futures contract; and
 (c)in relation to a transaction in an OTC derivative product that falls within subsection (1)(a)(iii) of section 1A of Part 1 of Schedule 1, means any specified event or events (excluding an event or events relating only to the issuer or guarantor of the instrument or to both the issuer and the guarantor).
 Editorial Note:
 # Not yet in operation.
 Division 2Reporting, Clearing, Trading and Record Keeping Obligations
 101B.Reporting obligation
 (1)A prescribed person must report an OTC derivative transaction to which subsection (2) applies—
 (a)to the Monetary Authority; and
 (b)in accordance with the reporting rules.
 (2)This subsection applies to an OTC derivative transaction that—
 (a)is specified in the reporting rules—
 (i)in relation to the prescribed person; and
 (ii)as a transaction that is required to be reported to the Monetary Authority;
 (b)falls within the circumstances and the criteria specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)for the application of the requirement to report referred to in paragraph (a)(ii); and
 (c)does not fall within the circumstances specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)as circumstances in which the requirement to report is taken to have been complied with.
 (3)In addition, a prescribed person that is an authorized financial institution incorporated in Hong Kong must ensure that a subsidiary of that institution specified under subsection (5) complies in relation to an OTC derivative transaction with the requirement set out in subsection (4).
 (4)The requirement is that the subsidiary reports to the Monetary Authority, in accordance with the reporting rules, an OTC derivative transaction—
 (a)to which the subsidiary is a counterparty; and
 (b)that is specified in those rules as a transaction to which subsection (3) applies.
 (5)The Monetary Authority may, by a written notice given to an authorized financial institution incorporated in Hong Kong, specify for the purposes of subsection (3)—
 (a)a particular subsidiary;
 (b)more than one subsidiary; or
 (c)subsidiaries generally.
 (6)The Monetary Authority may specify under subsection (5) a subsidiary incorporated outside Hong Kong or a subsidiary incorporated in Hong Kong.
 (7)Subject to an express agreement to the contrary by the parties to the transaction, a contravention of the reporting obligation in relation to an OTC derivative transaction does not of itself invalidate the transaction or affect any rights or obligations arising under, or relating to, the transaction.
 101C.Clearing obligation
 (1)A prescribed person must clear an OTC derivative transaction to which subsection (2) applies—
 (a)with a designated CCP; and
 (b)in accordance with the clearing rules.
 (2)This subsection applies to an OTC derivative transaction that—
 (a)is specified in the clearing rules—
 (i)in relation to the prescribed person; and
 (ii)as a transaction that is required to be cleared with a designated CCP;
 (b)falls within the circumstances and the criteria specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)for the application of the requirement to clear referred to in paragraph (a)(ii); and
 (c)does not fall within the circumstances specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)as circumstances in which the requirement to clear is taken to have been complied with.
 (3)In addition, a prescribed person that is an authorized financial institution incorporated in Hong Kong must ensure that a subsidiary of that institution specified under subsection (5) complies in relation to an OTC derivative transaction with the requirement set out in subsection (4).
 (4)The requirement is that the subsidiary clears with a designated CCP, in accordance with the clearing rules, an OTC derivative transaction—
 (a)to which the subsidiary is a counterparty; and
 (b)that is specified in those rules as a transaction to which subsection (3) applies.
 (5)The Monetary Authority may, by a written notice given to an authorized financial institution incorporated in Hong Kong, specify for the purposes of subsection (3)—
 (a)a particular subsidiary;
 (b)more than one subsidiary; or
 (c)subsidiaries generally.
 (6)The Monetary Authority may specify under subsection (5) a subsidiary incorporated outside Hong Kong or a subsidiary incorporated in Hong Kong.
 (7)Subject to an express agreement to the contrary by the parties to the transaction, a contravention of the clearing obligation in relation to an OTC derivative transaction does not of itself invalidate the transaction or affect any rights or obligations arising under, or relating to, the transaction.
 101D.Trading obligation
 (Not yet in operation)
 (1)A prescribed person must execute an OTC derivative transaction to which subsection (2) applies—
 (a)only on a designated trading platform; and
 (b)in accordance with the trading rules.
 (2)This subsection applies to an OTC derivative transaction that—
 (a)is specified in the trading rules—
 (i)in relation to the prescribed person; and
 (ii)as a transaction that is required to be executed only on a designated trading platform;
 (b)falls within the circumstances and the criteria specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)for the application of the requirement to execute as described in paragraph (a)(ii); and
 (c)does not fall within the circumstances specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)as circumstances in which the requirement to execute as described in subsection (1) is taken to have been complied with.
 (3)In addition, a prescribed person that is an authorized financial institution incorporated in Hong Kong must ensure that a subsidiary of that institution specified under subsection (5) complies in relation to an OTC derivative transaction with the requirement set out in subsection (4).
 (4)The requirement is that the subsidiary executes only on a designated trading platform and in accordance with the trading rules an OTC derivative transaction—
 (a)to which the subsidiary is a counterparty; and
 (b)that is specified in those rules as a transaction to which subsection (3) applies.
 (5)The Monetary Authority may, by a written notice given to an authorized financial institution incorporated in Hong Kong, specify for the purposes of subsection (3)—
 (a)a particular subsidiary;
 (b)more than one subsidiary; or
 (c)subsidiaries generally.
 (6)The Monetary Authority may specify under subsection (5) a subsidiary incorporated outside Hong Kong or a subsidiary incorporated in Hong Kong.
 (7)Subject to an express agreement to the contrary by the parties to the transaction, a contravention of the trading obligation in relation to an OTC derivative transaction does not of itself invalidate the transaction or affect any rights or obligations arising under, or relating to, the transaction.
 101E.Record keeping obligation
 (1)A prescribed person must keep, in accordance with the record keeping rules, records relating to an OTC derivative transaction to which subsection (2) applies.
 (2)This subsection applies to an OTC derivative transaction that—
 (a)is specified in the record keeping rules—
 (i)in relation to the prescribed person; and
 (ii)as a transaction the records of which are required to be kept;
 (b)falls within the circumstances and the criteria specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)for the application of the requirement to keep record referred to in paragraph (a)(ii); and
 (c)does not fall within the circumstances specified in those rules—
 (i)in relation to the prescribed person; and
 (ii)as circumstances in which the requirement to keep record is taken to have been complied with.
 (3)In addition, a prescribed person that is an authorized financial institution incorporated in Hong Kong must ensure that a subsidiary of that institution specified under subsection (5) complies in relation to an OTC derivative transaction with the requirement set out in subsection (4).
 (4)The requirement is that the subsidiary keeps, in accordance with the record keeping rules, records relating to an OTC derivative transaction—
 (a)to which the subsidiary is a counterparty; and
 (b)that is specified in those rules as a transaction to which subsection (3) applies.
 (5)The Monetary Authority may, by a written notice given to an authorized financial institution incorporated in Hong Kong, specify for the purposes of subsection (3)—
 (a)a particular subsidiary;
 (b)more than one subsidiary; or
 (c)subsidiaries generally.
 (6)The Monetary Authority may specify under subsection (5) a subsidiary incorporated outside Hong Kong or a subsidiary incorporated in Hong Kong.
 (7)A person specified in subsection (9)(a) must, when requested by the Commission—
 (a)give the Commission access to the records kept under this section; and
 (b)produce the records to the Commission within the time and at the place specified by the Commission.
 (8)A person specified in subsection (9)(b) must, when requested by the Monetary Authority—
 (a)give the Monetary Authority access to the records kept under this section; and
 (b)produce the records to the Monetary Authority within the time and at the place specified by the Monetary Authority.
 (9)The person specified—
 (a)for the purposes of subsection (7) is—
 (i)a prescribed person that is a licensed corporation; or
 (ii)a prescribed person that is a person of a class or description specified in the record keeping rules as being subject to the record keeping obligation; and
 (b)for the purposes of subsection (8) is—
 (i)a prescribed person that is an authorized financial institution; or
 (ii)a prescribed person that is an approved money broker.
 (10)Subject to an express agreement to the contrary by the parties to the transaction, a contravention of the record keeping obligation in relation to an OTC derivative transaction does not of itself invalidate the transaction or affect any rights or obligations arising under, or relating to, the transaction.
 #101F.Application by Commission to Court of First Instance for contravention of obligations
 (1)If a prescribed person that is not an authorized financial institution or an approved money broker contravenes the reporting obligation, clearing obligation, trading obligation or record keeping obligation, the Commission may apply to the Court of First Instance in respect of the contravention.
 (2)The application must be made by originating summons that is in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 (3)The Court of First Instance may inquire into the case and, if satisfied that there is no reasonable excuse for the contravention, impose a financial penalty not exceeding $5,000,000 on the prescribed person.
 Editorial Note:
 # The new section 101F added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on—
 (a)  10 July 2015, in so far as it relates to the contravention of the reporting obligation and the record keeping obligation; please see paragraph (c)(iii) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015); and
 (b)  1 September 2016, in so far as it relates to the contravention of the clearing obligation; please see paragraph (a)(iii) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 #101G.Application by Monetary Authority to Court of First Instance for contravention of obligations
 (1)If a prescribed person that is an authorized financial institution or an approved money broker contravenes the reporting obligation, clearing obligation, trading obligation or record keeping obligation, the Monetary Authority may apply to the Court of First Instance in respect of the contravention.
 (2)The application must be made by originating summons that is in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 (3)The Court of First Instance may inquire into the case and, if satisfied that there is no reasonable excuse for the contravention, impose a financial penalty not exceeding $5,000,000 on the prescribed person.
 Editorial Note:
 # The new section 101G added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on—
 (a)  10 July 2015, in so far as it relates to the contravention of the reporting obligation and the record keeping obligation; please see paragraph (c)(iv) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015); and
 (b)  1 September 2016, in so far as it relates to the contravention of the clearing obligation; please see paragraph (a)(iv) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 #101H.Exemptions from obligations
 (1)On application by a prescribed person and on payment of the prescribed fee, the Commission may, with the consent of the Monetary Authority—
 (a)exempt the person from one or more of the following—
 (i)the reporting obligation;
 (ii)the clearing obligation;
 (iii)the trading obligation;
 (iv)the record keeping obligation; and
 (b)on granting the exemption, impose conditions.
 (2)The Commission may, with the consent of the Monetary Authority—
 (a)suspend or withdraw an exemption on—
 (i)the ground that a condition has not been complied with; or
 (ii)any other ground that the Commission considers appropriate; or
 (b)amend any condition.
 (3)The Commission must publish on the Internet particulars that it considers appropriate of an exemption granted, suspended or withdrawn under this section.
 Editorial Note:
 # The new section 101H added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on—
 (a)  10 July 2015, in so far as it relates to the exemptions from the reporting obligation and the record keeping obligation; please see paragraph (c)(v) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015); and
 (b)  1 September 2016, in so far as it relates to the exemption from the clearing obligation; please see paragraph (a)(v) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 #101I.Guidelines on exemptions
 (1)The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, publish guidelines for granting exemptions from the reporting obligation, clearing obligation, trading obligation or record keeping obligation.
 (2)The Commission—
 (a)may exercise its powers under section 101H only after guidelines have been published; and
 (b)must have regard to the published guidelines when exercising its powers under section 101H.
 (3)Guidelines published under subsection (1) are not subsidiary legislation.
 Editorial Note:
 # The new section 101I added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on—
 (a)  10 July 2015, in so far as it relates to the guidelines on the exemptions from the reporting obligation and the record keeping obligation; please see paragraph (c)(vi) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015); and
 (b)  1 September 2016, in so far as it relates to the guidelines on exemption from the clearing obligation; please see paragraph (a)(vi) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 Division 3Designation of Central Counterparties and Trading Platforms
 101J.Designation of central counterparties
 (1)On application by a person in the prescribed manner and on payment of the prescribed fee, the Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary—
 (a)designate the person, in accordance with the designation rules and by a written notice served on the person, as a central counterparty for the purposes of this Part; or
 (b)refuse, in accordance with the designation rules, to designate the person.
 (2)A person may be designated only if—
 (a)at the time of designation, the person—
 (i)is a recognized clearing house; or
 (ii)is a person authorized under section 95(2) to provide automated trading services; and
 (b)the requirements prescribed by the designation rules have been met.
 (3)A designation may be for—
 (a)OTC derivative transactions generally; or
 (b)a class or description of OTC derivative transactions specified in the designation.
 (4)A person outside Hong Kong or in Hong Kong may be designated under this section.
 (5)The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, in accordance with the designation rules and by a written notice served on a person, do the following with regard to a designation—
 (a)impose conditions;
 (b)amend or revoke a condition;
 (c)impose additional conditions;
 (d)revoke the designation.
 (6)Before exercising a power under subsection (1)(b) or (5)(d), the Commission must give the person concerned a reasonable opportunity of being heard.
 (7)If the Commission amends or revokes a condition or imposes an additional condition under subsection (5)(b) or (c), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (8)If the Commission revokes a designation under subsection (5)(d), the revocation takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (9)If, under this section, a person is designated or a designation is revoked, the Commission must publish notice of that fact in the Gazette.
 (10)A notice published under subsection (9) is not subsidiary legislation.
 101K.Designation of trading platforms
 (Not yet in operation)
 (1)On application by a person in the prescribed manner and on payment of the prescribed fee, the Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary—
 (a)designate the person, in accordance with the designation rules and by a written notice served on the person, as a trading platform for the purposes of this Part; or
 (b)refuse, in accordance with the designation rules, to designate the person.
 (2)A person may be designated only if—
 (a)at the time of designation, the person—
 (i)is a recognized exchange company; or
 (ii)is a person authorized under section 95(2) to provide automated trading services; and
 (b)the requirements prescribed by the designation rules have been met.
 (3)A designation may be for—
 (a)OTC derivative transactions generally; or
 (b)a class or description of OTC derivative transactions specified in the designation.
 (4)A person outside Hong Kong or in Hong Kong may be designated under this section.
 (5)The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, in accordance with the designation rules and by a written notice served on a person, do the following with regard to a designation—
 (a)impose conditions;
 (b)amend or revoke a condition;
 (c)impose additional conditions;
 (d)revoke the designation.
 (6)Before exercising a power under subsection (1)(b) or (5)(d), the Commission must give the person concerned a reasonable opportunity of being heard.
 (7)If the Commission amends or revokes a condition or imposes an additional condition under subsection (5)(b) or (c), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (8)If the Commission revokes a designation under subsection (5)(d), the revocation takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (9)If, under this section, a person is designated or a designation is revoked, the Commission must publish notice of that fact in the Gazette.
 (10)A notice published under subsection (9) is not subsidiary legislation.
 Division 4Rule Making Powers on Obligations and Designations
 101L.Rule making power—reporting obligation
 (1)The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules—
 (a)generally for the purposes of the reporting obligation; and
 (b)without limiting paragraph (a), to prescribe the particular matters set out in this section.
 (2)Rules made under this section—
 (a)may specify for the purposes of paragraph (a)(iv) of the definition of prescribed person in section 101A, a class or description of persons; and
 (b)must provide in relation to a person of such a class or description that the person is subject to the reporting obligation only if the person is a counterparty to a specified OTC derivative transaction.
 (3)Rules made under this section—
 (a)may specify generally, or with reference to a class or description of transactions, the OTC derivative transactions that are subject to the reporting obligation; and
 (b)without limiting paragraph (a), may provide that an OTC derivative transaction is subject to the reporting obligation—
 (i)even if a counterparty or more than one counterparty is a person outside Hong Kong;
 (ii)except in relation to a person of a class or description specified under subsection (2), even if a prescribed person is not a counterparty to the transaction; or
 (iii)even if the transaction is entered into or conducted wholly or partially outside Hong Kong.
 (4)Without limiting subsection (3), OTC derivative transactions may be specified under that subsection with reference to any factor relating to an OTC derivative transaction, including—
 (a)the underlying subject matter of the transaction;
 (b)the features or characteristics of the transaction; and
 (c)the persons involved in the transaction.
 (5)Rules made under this section may specify—
 (a)the circumstances relating to a specified OTC derivative transaction in which the reporting obligation—
 (i)applies;
 (ii)does not apply; or
 (iii)is taken to have been complied with;
 (b)the criteria (including thresholds) for the application of the reporting obligation; and
 (c)different circumstances and criteria for different prescribed persons or different OTC derivative transactions.
 (6)Rules made under this section may provide that a prescribed person is subject to the reporting obligation—
 (a)in relation to OTC derivative transactions entered into before the date on which the reporting obligation started to apply—
 (i)to the class or description of persons to which the person belongs; or
 (ii)in relation to the class or description of OTC derivative transactions to which the transaction belongs; and
 (b)if the OTC derivative transaction referred to in paragraph (a)—
 (i)belongs to a class or description of transactions that is specified by rules made under this section for the purposes of the reporting obligation; and
 (ii)if at the time the reporting obligation started to apply to the person or the transaction, the transaction is still outstanding within the meaning given by rules made under this subsection.
 (7)Rules made under this section may specify—
 (a)the form and manner in which a specified OTC derivative transaction is to be reported to the Monetary Authority;
 (b)without limiting paragraph (a), that any requirement as to the form and manner of reporting is complied with if the specified OTC derivative transaction is reported by means of an electronic system operated by or on behalf of the Monetary Authority for submitting and receiving reports on OTC derivative transactions for the purposes of section 101B;
 (c)any documents, information or particulars that must be submitted for complying with the reporting obligation;
 (d)the period within which the reporting obligation must be complied with; and
 (e)any other matter relating to the procedure for complying with the reporting obligation.
 (8)Rules made under this section may specify—
 (a)that a prescribed person may report a specified OTC derivative transaction to the Monetary Authority directly or through a third party; and
 (b)that a subsidiary specified under section 101B(5) that is a counterparty to a specified OTC derivative transaction may report the transaction to the Monetary Authority directly or through a third party.
 101M.Rule making power—fees
 (1)The Chief Executive in Council may, after consultation with the Monetary Authority, make rules to require and provide for the payment to the Monetary Authority of the fees for using the electronic system referred to in section 101L(7)(b).
 (2)Rules made under this section may provide—
 (a)that the amount of any fees may be fixed by reference to a scale set out in the rules;
 (b)for the payment of different fees by or in relation to persons or cases of different classes or descriptions;
 (c)for the time and manner of payment of the fees;
 (d)that the payment of any fees may, either generally or in a particular case, be reduced, waived or refunded;
 (e)that the Monetary Authority may recover any outstanding amount of the fees as a civil debt due to the Monetary Authority; and
 (f)for any other matters relating or incidental to a matter mentioned in paragraph (a), (b), (c), (d) or (e).
 (3)This section is in addition to and not in derogation of sections 29 and 29A of the Interpretation and General Clauses Ordinance (Cap. 1).
 101N.Rule making power—clearing obligation
 (1)The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules—
 (a)generally for the purposes of the clearing obligation; and
 (b)without limiting paragraph (a), to prescribe the particular matters set out in this section.
 (2)Rules made under this section—
 (a)may specify for the purposes of paragraph (b)(iv) of the definition of prescribed person in section 101A, a class or description of persons; and
 (b)must provide in relation to a person of such a class or description that the person is subject to the clearing obligation only if the person is a counterparty to a specified OTC derivative transaction.
 (3)Rules made under this section—
 (a)may specify generally, or with reference to a class or description of transactions, the OTC derivative transactions that are subject to the clearing obligation; and
 (b)without limiting paragraph (a), may provide that an OTC derivative transaction is subject to the clearing obligation—
 (i)even if a counterparty or more than one counterparty is a person outside Hong Kong;
 (ii)except in relation to a person of a class or description specified under subsection (2), even if a prescribed person is not a counterparty to the transaction; or
 (iii)even if the transaction is entered into or conducted wholly or partially outside Hong Kong.
 (4)Without limiting subsection (3), OTC derivative transactions may be specified under that subsection with reference to any factor relating to an OTC derivative transaction, including—
 (a)the underlying subject matter of the transaction;
 (b)the features or characteristics of the transaction; and
 (c)the persons involved in the transaction.
 (5)Rules made under this section may specify—
 (a)the circumstances relating to a specified OTC derivative transaction in which the clearing obligation—
 (i)applies;
 (ii)does not apply; or
 (iii)is taken to have been complied with;
 (b)the criteria (including thresholds) for the application of the clearing obligation; and
 (c)different circumstances and criteria for different prescribed persons or different OTC derivative transactions.
 (6)Rules made under this section may specify—
 (a)the manner in which a specified OTC derivative transaction is to be cleared with a designated CCP;
 (b)the period within which the clearing obligation must be complied with;
 (c)the circumstances in which a specified OTC derivative transaction that is cleared otherwise than with a designated CCP is treated, for the purposes of the clearing obligation, as having been cleared with a designated CCP;
 (d)that a prescribed person may clear a specified OTC derivative transaction with a designated CCP directly or through a third party; and
 (e)that a subsidiary specified under section 101C(5) that is a counterparty to a specified OTC derivative transaction may clear the transaction with a designated CCP directly or through a third party.
 101O.Rule making power—trading obligation
 (Not yet in operation)
 (1)The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules—
 (a)generally for the purposes of the trading obligation; and
 (b)without limiting paragraph (a), to prescribe the particular matters set out in this section.
 (2)Rules made under this section—
 (a)may specify for the purposes of paragraph (c)(iv) of the definition of prescribed person in section 101A, a class or description of persons; and
 (b)must provide in relation to a person of such a class or description that the person is subject to the trading obligation only if the person is a counterparty to a specified OTC derivative transaction.
 (3)Rules made under this section—
 (a)may specify generally, or with reference to a class or description of transactions, the OTC derivative transactions that are subject to the trading obligation; and
 (b)without limiting paragraph (a), may provide that an OTC derivative transaction is subject to the trading obligation—
 (i)even if a counterparty or more than one counterparty is a person outside Hong Kong;
 (ii)except in relation to a person of a class or description specified under subsection (2), even if a prescribed person is not a counterparty to the transaction; or
 (iii)even if the transaction is entered into or conducted wholly or partially outside Hong Kong.
 (4)Without limiting subsection (3), OTC derivative transactions may be specified under that subsection with reference to any factor relating to an OTC derivative transaction, including—
 (a)the underlying subject matter of the transaction;
 (b)the features or characteristics of the transaction; and
 (c)the persons involved in the transaction.
 (5)Rules made under this section may specify—
 (a)the circumstances relating to a specified OTC derivative transaction in which the trading obligation—
 (i)applies;
 (ii)does not apply; or
 (iii)is taken to have been complied with;
 (b)the criteria (including thresholds) for the application of the trading obligation; and
 (c)different circumstances and criteria for different prescribed persons or different OTC derivative transactions.
 (6)Rules made under this section may specify—
 (a)the manner in which a specified OTC derivative transaction is to be executed on a designated trading platform;
 (b)the circumstances in which a specified OTC derivative transaction that is executed otherwise than on a designated trading platform is treated, for the purposes of the trading obligation, as having been executed on a designated trading platform;
 (c)that a prescribed person may execute a specified OTC derivative transaction on a designated trading platform directly or through a third party; and
 (d)that a subsidiary specified under section 101D(5) that is a counterparty to a specified OTC derivative transaction may execute the transaction on a designated trading platform directly or through a third party.
 101P.Rule making power—record keeping obligation
 (1)The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules—
 (a)generally for the purposes of the record keeping obligation; and
 (b)without limiting paragraph (a), to prescribe the particular matters set out in this section.
 (2)Rules made under this section—
 (a)may specify for the purposes of paragraph (d)(iv) of the definition of prescribed person in section 101A, a class or description of persons; and
 (b)must provide in relation to a person of such a class or description that the person is subject to the record keeping obligation only if the person is a counterparty to a specified OTC derivative transaction.
 (3)Rules made under this section may specify—
 (a)generally, or with reference to a class or description of transactions, the OTC derivative transactions that are subject to the record keeping obligation;
 (b)the records to be kept;
 (c)different records to be kept under different circumstances or by different classes or descriptions of prescribed persons;
 (d)the manner in which, the location at which and the minimum duration for which the records must be kept;
 (e)the circumstances relating to a specified OTC derivative transaction in which the record keeping obligation—
 (i)applies;
 (ii)does not apply; or
 (iii)is taken to have been complied with; and
 (f)any other matter relating to the records to be kept.
 101Q.Rule making power—designations
 The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules to prescribe—
 (a)the application procedure for designation—
 (i)as a central counterparty, including the documents and information to be provided by the applicant; or
 #(ii)as a trading platform, including the documents and information to be provided by the applicant;
 (b)other requirements to be complied with by an applicant for designation;
 (c)any matter that may be taken into account when considering an application;
 (d)the grounds on which designation may be refused or revoked;
 +(e)the procedure for exercising a power under section 101J(1) or (5) or 101K(1) or (5); or
 +(f)any other matter relating to the process of or procedure for a designation or revocation under section 101J or 101K.
 Editorial Note:
 # Not yet in operation.
 + The new section 101Q(e) and (f) added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on 1 September 2016, except in so far as they relate to the new section 101K. Please see paragraph (a)(viii)(B) and (C) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 Division 5Systemically Important Participants
 (Not yet in operation)
 101R.Persons who must notify positions in OTC derivative transactions
 (Not yet in operation)
 (1)This section applies to a person who—
 (a)is not—
 (i)an authorized financial institution;
 (ii)an approved money broker;
 (iii)a licensed corporation;
 (iv)a recognized exchange company;
 (v)a recognized clearing house; or
 (vi)a person authorized under section 95(2) to provide automated trading services; and
 (b)engages in OTC derivative transactions.
 (2)A person to whom this section applies must notify the Commission in accordance with subsection (4) if the person’s position in a specific class reaches the notification level.
 (3)For the purposes of subsection (2), a reference to a person’s position includes the position of another person to the extent to which the performance of the obligations arising from that other person’s position is guaranteed by the person.
 (4)A notification must be given—
 (a)in writing and within the period prescribed by the notification rules; and
 (b)in accordance with subsection (5).
 (5)A notification must contain—
 (a)sufficient information—
 (i)to identify the systemically important participant;
 (ii)to identify the specific class to which the notification relates; and
 (iii)to show that the notification level has been reached; and
 (b)any information prescribed by the notification rules (including additional information so prescribed, relating to the matters referred to in paragraph (a)).
 (6)A person who without reasonable excuse fails to comply with subsection (2) commits an offence.
 (7)A person who commits an offence under subsection (6) is liable—
 (a)on conviction on indictment to a fine of $5,000,000 and to imprisonment for 7 years and, if the offence is a continuing offence, to a further fine of $100,000 for every day during which the offence continues, until the cut-off date for the further fine; or
 (b)on summary conviction to a fine of $500,000 and to imprisonment for 2 years and, if the offence is a continuing offence, to a further fine of $10,000 for every day during which the offence continues, until the cut-off date for the further fine.
 (8)For the purposes of subsection (7), the cut-off date for a further fine for which the person is liable is the date on which the person, in writing, notifies the Commission in accordance with subsection (5) of the person’s position in that specific class.
 101S.Commission to maintain register
 (Not yet in operation)
 (1)The Commission must maintain a register, in a form that it considers appropriate, to record information under section 101T.
 (2)The SIP register may be maintained—
 (a)in a documentary form; or
 (b)by recording information otherwise than in a documentary form, so long as the information is capable of being reproduced in a legible form.
 (3)At all reasonable times, the SIP register must be made available to the public for the purpose of enabling a person who is a member of the public to ascertain—
 (a)whether the person is dealing with a registered SIP; and
 (b)the particulars of registration of a registered SIP the person is dealing with.
 (4)At all reasonable times, a member of the public may—
 (a)inspect the SIP register, or if it is maintained otherwise than in a documentary form, a reproduction of the information or the relevant part of it in a legible form; and
 (b)on payment of the prescribed fee, obtain a copy of—
 (i)an entry in the SIP register; or
 (ii)an extract of the SIP register.
 (5)A document purporting to be—
 (a)a copy of an entry in or extract of the SIP register; and
 (b)certified by an authorized officer of the Commission as a true copy of the entry or extract,
 is admissible as evidence of its contents in any legal proceedings.
 (6)Without derogating from the other provisions of this section, the Commission must, in addition, make the SIP register available to the public in the form of an online record.
 101T.Registration in SIP register
 (Not yet in operation)
 (1)The Commission may enter in the SIP register in respect of a person who has complied with the notification requirement—
 (a)the name of the person; and
 (b)the specific class in respect of which the notification level has been reached.
 (2)The Commission may enter in the SIP register in respect of a person who has purportedly given a notification, but not in accordance with section 101R(4)—
 (a)the name of the person; and
 (b)the specific class in respect of which the notification level has been reached.
 (3)If the conditions in subsection (6) are satisfied in relation to a person, the Commission may enter in the SIP register—
 (a)the name of the person; and
 (b)the specific class referred to in subsection (6)(b).
 (4)Before making an entry in the SIP register under subsection (3)(a) or (b) in respect of a person, the Commission must—
 (a)inform the Monetary Authority; and
 (b)give the person concerned a reasonable opportunity of being heard in respect of the proposed entry.
 (5)The Commission must inform the person concerned by a written notice as soon as practicable after making an entry in the SIP register under subsection (1)(a) or (b), (2)(a) or (b) or (3)(a) or (b).
 (6)The conditions referred to in subsection (3) are that—
 (a)section 101R(1) applies to the person; and
 (b)either—
 (i)the Commission has reasonable cause to believe that the person’s position in a specific class has reached the notification level but the person has not given a notification in respect of the specific class; or
 (ii)the Monetary Authority informs the Commission that the Monetary Authority has reasonable cause to believe that the person’s position in a specific class has reached the notification level but the person has not given a notification in respect of the specific class.
 (7)For the purposes of subsection (6)(b), a reference to a person’s position includes the position of another person to the extent to which the performance of the obligations arising from that other person’s position is guaranteed by the person.
 (8)A decision to make an entry in the SIP register under subsection (1), (2) or (3) takes effect at the time of the service of the notice under subsection (5) on the person or at the time specified in the notice, whichever is the later.
 101U.Notification not required after registration for specific class
 (Not yet in operation)
 (1)If a person is registered for a specific class, as long as the name of the person remains on the SIP register for that specific class, the person is not required to comply with the notification requirement in respect of that specific class.
 (2)Subsection (1) does not affect any liability incurred for a failure by a person who is registered for a specific class under section 101T(2) or (3) to comply with the notification requirement in respect of that specific class.
 (3)Also, subsection (1) does not affect the application of section 101R(2) to a person whose position in a specific class reaches the notification level after the first or any subsequent deregistration for that specific class.
 (4)For the purposes of this section, a person is taken to be registered for a specific class if the SIP register shows that the person’s position in that specific class has reached the notification level.
 (5)For the purposes of subsections (3) and (4), a reference to the position of a person or a person’s position includes the position of another person to the extent to which the performance of the obligations arising from that other person’s position is guaranteed by the person.
 101V.Deregistration
 (Not yet in operation)
 (1)The Commission must remove from the SIP register the name of a person, if the Commission is satisfied that the relevant conditions, circumstances and criteria prescribed by the notification rules for removing a person’s name from the SIP register have been met.
 (2)The Commission must remove from the SIP register a specific class entered in respect of a person’s name, if the Commission is satisfied that the relevant conditions, circumstances and criteria prescribed by the notification rules for removing the specific class from the SIP register have been met.
 (3)A deregistration may be effected—
 (a)by the Commission on its own initiative; or
 (b)on application by a registered SIP.
 (4)The Commission must give the person concerned a reasonable opportunity of being heard before refusing an application for deregistration.
 (5)The Commission must consult the Monetary Authority before effecting a deregistration.
 (6)The Commission must inform the person concerned of a deregistration or a refusal to deregister by a written notice as soon as practicable after a deregistration or a refusal to deregister.
 (7)This section does not prevent the Commission from amending the SIP register to give effect to a decision of the Securities and Futures Appeals Tribunal under Part XI on a review by that Tribunal of a decision of the Commission under section 101T(3).
 101W.Power to require information from registered SIPs
 (Not yet in operation)
 (1)The Commission may, by a written notice, require a registered SIP to give to the Commission, in the form and manner set out in the notice, information required by the notice, regarding one or more of the following—
 (a)the registered SIP’s activities and transactions in OTC derivative products;
 (b)the risk management systems and policies established in respect of the registered SIP’s transactions in OTC derivative products;
 (c)any other matter prescribed by the notification rules.
 (2)The Monetary Authority may, by a written notice, require a registered SIP to give to the Monetary Authority, in the form and manner set out in the notice, information required by the notice, regarding one or more of the following—
 (a)the registered SIP’s activities and transactions in OTC derivative products;
 (b)the risk management systems and policies established in respect of the registered SIP’s transactions in OTC derivative products;
 (c)any other matter prescribed by the notification rules.
 (3)The registered SIP must give any information required to be given under subsection (1) or (2) within the period specified in the notice.
 101X.Power to require registered SIPs to take certain action
 (Not yet in operation)
 (1)The Commission may, with the consent, or at the request, of the Monetary Authority, take the action specified in subsection (2), if the Commission has reasonable cause to believe that the registered SIP’s activities or transactions in OTC derivative products pose, or may pose, a systemic risk—
 (a)in the securities and futures industry; or
 (b)to the financial stability of Hong Kong.
 (2)The action the Commission may take is to require, by a written notice, the registered SIP to do one or more of the following acts specified in the notice—
 (a)to refrain from increasing, or to reduce, the registered SIP’s exposure arising from its positions in one or more specific classes;
 (b)to collect collateral or to increase the amount of collateral collected;
 (c)to post collateral or to increase the amount of collateral posted;
 (d)to restrict the use of collateral;
 (e)to restrict the type of collateral collected or posted;
 (f)to take any other action prescribed by the notification rules.
 (3)For the purposes of subsection (2)(a), a reference to the registered SIP’s exposure arising from its positions is a reference to the risk to which the registered SIP is exposed in respect of—
 (a)the positions of the registered SIP; and
 (b)the positions of another person to the extent to which the performance of the obligations arising from those positions is guaranteed by the registered SIP.
 (4)A requirement in a notice served under this section takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 101Y.Application to Court of First Instance
 (Not yet in operation)
 (1)If a registered SIP fails to comply with a requirement made under section 101W(1) or 101X, the Commission may apply to the Court of First Instance for an inquiry into the failure.
 (2)If a registered SIP fails to comply with a requirement made under section 101W(2), the Monetary Authority may apply to the Court of First Instance for an inquiry into the failure.
 (3)The Court of First Instance may inquire into the case and if satisfied that—
 (a)there is no reasonable excuse for the registered SIP not to comply with the requirement, order the registered SIP to comply with the requirement within the period specified by the Court; and
 (b)the failure was without reasonable excuse, punish the registered SIP in the same manner as if the registered SIP had been guilty of contempt of court.
 (4)If there is a reasonable likelihood that a registered SIP will fail to comply with a requirement referred to in subsection (1), the Commission may apply to the Court of First Instance for an order that the registered SIP take such action or refrain from taking such action as the Court directs.
 (5)If there is a reasonable likelihood that a registered SIP will fail to comply with a requirement referred to in subsection (2), the Monetary Authority may apply to the Court of First Instance for an order that the registered SIP take such action or refrain from taking such action as the Court directs.
 (6)An application under subsection (1), (2), (4) or (5) must be made by originating summons that is in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 101Z.Rule making power—notifications etc.
 (Not yet in operation)
 The Commission may, with the consent of the Monetary Authority and after consultation with the Financial Secretary, make rules to prescribe—
 (a)in relation to a specific class—
 (i)the threshold for the application of the notification requirement;
 (ii)the period within which the notification requirement must be complied with;
 (iii)the conditions, circumstances and criteria for deregistration; and
 (iv)the conditions, circumstances and criteria for regarding a person’s position as reaching the notification level;
 (b)additional information to be given by a person under section 101R(5)(b);
 (c)matters on which information may be required to be given under section 101W(1)(c) and (2)(c);
 (d)action a registered SIP may be required to take under section 101X(2)(f); and
 (e)generally for better carrying out the purposes of this Division.
 Part IV
 Offers of Investments
 (Format changes—E.R. 2 of 2012)
 Division 1Interpretation
 102.Interpretation of Part IV
 (1)In this Part, unless the context otherwise requires—
 advertisement (廣告) includes every form of advertising, whether made orally or produced mechanically, electronically, magnetically, optically, manually or by any other means;
 approved person (核准人士)—
 (a)in relation to a collective investment scheme, means an individual approved by the Commission under section 104(3); (Amended 8 of 2011 s. 2)
 (aa)in relation to a structured product, means an individual approved by the Commission under section 104A(3); or (Added 8 of 2011 s. 2)
 (b)in relation to the issue of an advertisement, invitation or document, means an individual approved by the Commission under section 105(3);
 document (文件) means any publication (including a newspaper, magazine or journal, a poster or notice, a circular, brochure, pamphlet or handbill, or a prospectus)—
 (a)directed at, or the contents of which are likely to be accessed or read (whether concurrently or otherwise) by, the public; and
 (b)whether produced mechanically, electronically, magnetically, optically, manually or by any other means;
 exempted body (獲豁免團體) means a body specified in Part 3 of Schedule 4;
 invitation (邀請) includes an offer and an invitation, whether made orally or produced mechanically, electronically, magnetically, optically, manually or by any other means;
 issue (發出), in relation to any material (including any advertisement, invitation or document), includes publishing, circulating, distributing or otherwise disseminating the material or the contents thereof, whether—
 (a)by any visit in person;
 (b)in a newspaper, magazine, journal or other publication;
 (c)by the display of posters or notices;
 (d)by means of circulars, brochures, pamphlets or handbills;
 (e)by an exhibition of photographs or cinematograph films;
 (f)by way of sound or television broadcasting;
 (g)by any information system or other electronic device; or
 (h)by any other means, whether mechanically, electronically, magnetically, optically, manually or by any other medium, or by way of production or transmission of light, image or sound or any other medium,
 and also includes causing or authorizing the material to be issued;
 relevant authority (監管當局), in relation to a place outside Hong Kong, means an authority which the Monetary Authority is satisfied is a recognized banking supervisory authority of that place;
 representative (代表)—
 (a)in relation to a licensed corporation, means an individual—
 (i)who is licensed as a licensed representative for a regulated activity; and
 (ii)who carries on that regulated activity for the licensed corporation as a licensed corporation to which he is accredited; or
 (b)in relation to a registered institution, means an individual—
 (i)whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged by the registered institution in respect of a regulated activity; and
 (ii)who carries on that regulated activity for the registered institution; (Amended 8 of 2011 s. 2)
 securities (證券) has the same meaning as that given by the definition of securities in section 1 of Part 1 of Schedule 1 except that it does not include structured products that are securities only because of paragraph (g) of that definition. (Added 8 of 2011 s. 2)
 (2)For the purposes of this Part—
 (a)an advertisement, invitation or document issued by a person shall be regarded as being issued by him on every day on which he causes or authorizes it to be so issued;
 (b)an advertisement, invitation or document issued by one person on behalf of another shall be regarded as an advertisement, invitation or document (as the case may be) issued by both persons.
 Division 2Regulation of offers of investments, etc.
 103.Offence to issue advertisements, invitations or documents relating to investments in certain cases
 (1)Subject to subsections (2), (3) and (5) to (9), a person commits an offence if he issues, or has in his possession for the purposes of issue, whether in Hong Kong or elsewhere, an advertisement, invitation or document which to his knowledge is or contains an invitation to the public—
 (a)to enter into or offer to enter into—
 (i)an agreement to acquire, dispose of, subscribe for or underwrite securities; or
 (ii)a regulated investment agreement or an agreement to acquire, dispose of, subscribe for or underwrite any other structured product; or (Replaced 8 of 2011 s. 3)
 (b)to acquire an interest in or participate in, or offer to acquire an interest in or participate in, a collective investment scheme,
 unless the issue is authorized by the Commission under section 105(1).
 (2)Subsection (1) does not apply to the issue, or the possession for the purposes of issue, of any advertisement, invitation or document—
 (a)made by or on behalf of an intermediary licensed or registered for Type 1, Type 4 or Type 6 regulated activity (whether acting as principal or agent) in respect of—
 (i)listed securities; or
 (ii)unlisted securities (excluding unlisted securities that are structured products); (Replaced 8 of 2011 s. 3)
 (b)made by or on behalf of an intermediary licensed or registered for Type 2 or Type 5 regulated activity (whether acting as principal or agent) in respect of futures contracts;
 (c)made by or on behalf of—
 (i)an authorized financial institution (whether acting as principal or agent); or
 (ii)an intermediary licensed for Type 3 regulated activity (whether acting as principal or agent),
 in respect of leveraged foreign exchange contracts;
 (d)made by or on behalf of a recognized exchange company or recognized clearing house in respect of the provision of services by such recognized exchange company or recognized clearing house (as the case may be);
 (e)made by or on behalf of a corporation in respect of securities (excluding securities that are structured products) of the corporation, or of a related corporation of the corporation, to—
 (i)holders of securities (excluding securities that are structured products) of the corporation or related corporation;
 (ii)creditors of the corporation or related corporation;
 (iii)employees employed by the corporation or related corporation; or
 (iv)agents acting in a professional capacity on behalf of the corporation or related corporation; (Replaced 8 of 2011 s. 3)
 (f)made by or on behalf of the Government in respect of securities or structured products issued by it; (Amended 8 of 2011 s. 3)
 (g)made by or on behalf of a credit union in respect of shares in the credit union;
 (ga)made by or on behalf of a corporation, but only to the extent that the advertisement, invitation or document relates to an offer specified in Part 1 of the Seventeenth Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) as read with the other Parts of that Schedule; (Replaced 16 of 2016 s. 5)
 (h)made by or on behalf of a person acting as a trustee of a trust, not being a collective investment scheme, to beneficiaries under the trust; or
 (i)made by or on behalf of a person who is engaged in the business of selling and purchasing property other than securities or structured products (whether acting as principal or agent) in the ordinary course of that business. (Amended 8 of 2011 s. 3)
 (3)Subsection (1) does not apply to the issue, or the possession for the purposes of issue—
 (a)of—
 (i)a prospectus which complies with or is exempt from compliance with Part II of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32);
 (ii)in the case of a corporation incorporated outside Hong Kong, a prospectus which complies with or is exempt from compliance with Part XII of that Ordinance;
 (iii)a publication falling within section 38B(2) of that Ordinance; (Replaced 30 of 2004 s. 3. Amended 28 of 2012 ss. 912 & 920)
 (b)of a document relating to the securities of a body corporate incorporated in Hong Kong that is neither a registered company nor an open-ended fund company, being a document which— (Amended 16 of 2016 s. 5)
 (i)would, if the body corporate were a registered company, be a prospectus to which section 38 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) applies, or would apply if not excluded by section 38(5)(b) or 38A of that Ordinance; and (Amended 28 of 2012 ss. 912 & 920)
 (ii)contains all the matters which, by virtue of Part XII of that Ordinance, it would be required to contain if the body corporate were a corporation incorporated outside Hong Kong and the document were a prospectus issued by that corporation;
 (c)of a form of application for the shares or debentures of a corporation that is not an open-ended fund company, where it is issued, or the possession is for the purposes of issue, together with— (Amended 16 of 2016 s. 5)
 (i)a prospectus with respect to those shares or debentures which complies with or is exempt from compliance with Part II of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) or, in the case of a corporation incorporated outside Hong Kong, complies with or is exempt from compliance with Part XII of that Ordinance; or (Amended 28 of 2012 ss. 912 & 920)
 (ii)in the case of a body corporate incorporated in Hong Kong that is not a registered company, a document containing all the matters which, by virtue of Part XII of that Ordinance, it would be required to contain if the body corporate were a corporation incorporated outside Hong Kong and the document were a prospectus issued by that corporation with respect to those shares or debentures;
 (d)of a form of application for the securities of a corporation, where it is issued, or the possession is for the purposes of issue, in connection with an invitation made in good faith to a person to enter into an underwriting agreement with respect to those securities;
 (e)of any advertisement, invitation or document made in respect of the issue, whether in Hong Kong or elsewhere, of a certificate of deposit by an authorized financial institution;
 (ea)of any advertisement, invitation or document made in respect of the issue, whether in Hong Kong or elsewhere, of a currency-linked instrument, an interest rate-linked instrument or a currency and interest rate-linked instrument by an authorized financial institution; (Added 8 of 2011 s. 3)
 (f)of any advertisement, invitation or document made in respect of the issue, whether in Hong Kong or elsewhere, of a certificate of deposit—
 (i)the amount or denomination of which is not less than the sum specified in Part 1 of Schedule 4; and
 (ii)by—
 (A)a multilateral agency; or
 (B)a bank incorporated outside Hong Kong and having no place of business in Hong Kong, where the Monetary Authority has declared in writing that he is satisfied that the bank is likely to be adequately supervised by the relevant authority of any place in which it is incorporated or has its principal place of business;
 (g)of any advertisement, invitation or document made in respect of the issue, whether in Hong Kong or elsewhere, of any instrument specified in Part 2 of Schedule 4 (other than a certificate of deposit), where the amount or denomination of the instrument is not less than the sum specified in Part 1 of Schedule 4 and the instrument—
 (i)is issued by an authorized financial institution or a multilateral agency, or by an exempted body which, if it is a corporation or a wholly owned subsidiary specified in item 11 of Part 3 of Schedule 4, complies with the relevant condition;
 (ii)is issued by a corporation which complies with the relevant condition, and is guaranteed by an authorized financial institution or a multilateral agency, or by an exempted body (other than a corporation specified in item 11 of Part 3 of Schedule 4 which does not comply with the relevant condition, or a wholly owned subsidiary of the corporation); or
 (iii)is issued by a wholly owned subsidiary specified in item 11 of Part 3 of Schedule 4 and is guaranteed by the corporation of which it is such a subsidiary and which complies with the relevant condition;
 (h)of any advertisement, invitation or document made in respect of the issue of securities the listing of which on a recognized stock market has been approved by the recognized exchange company by which the recognized stock market is operated, where the advertisement, invitation or document complies with the rules made under section 23 or 36 governing the listing of securities, except to the extent that compliance is, in accordance with those rules, waived, modified or not required;
 (i)of any advertisement, invitation or document made in respect of securities regulated in a jurisdiction outside Hong Kong which have been admitted to trading on a recognized stock market under or pursuant to rules made under section 23 or 36;
 (j)of any advertisement, invitation or document made in respect of securities or structured products, or interests in any collective investment scheme, that are or are intended to be disposed of only to persons outside Hong Kong; (Replaced 8 of 2011 s. 3)
 (k)of any advertisement, invitation or document made in respect of securities or structured products, or interests in any collective investment scheme, that are or are intended to be disposed of only to professional investors. (Replaced 8 of 2011 s. 3)
 (4)A person who commits an offence under subsection (1) is liable—
 (a)on conviction on indictment to a fine of $500,000 and to imprisonment for 3 years and, in the case of a continuing offence, to a further fine of $20,000 for every day during which the offence continues; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months and, in the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues.
 (5)A person shall not be regarded as committing an offence under subsection (1) by reason only that he issues, or has in his possession for the purposes of issue—
 (a)as or on behalf of an intermediary licensed or registered for Type 1, Type 4 or Type 6 regulated activity (whether acting as principal or agent) any advertisement, invitation or document made in respect of—
 (i)listed securities; or
 (ii)unlisted securities (excluding unlisted securities that are structured products); (Replaced 8 of 2011 s. 3)
 (b)as or on behalf of an intermediary licensed or registered for Type 2 or Type 5 regulated activity (whether acting as principal or agent), any advertisement, invitation or document made in respect of futures contracts;
 (c)as or on behalf of—
 (i)an authorized financial institution (whether acting as principal or agent); or
 (ii)an intermediary licensed for Type 3 regulated activity (whether acting as principal or agent),
 any advertisement, invitation or document made in respect of leveraged foreign exchange contracts.
 (6)A person shall not be regarded as committing an offence under subsection (1) by reason only that he issues any advertisement, invitation or document, or has any advertisement, invitation or document in his possession for the purposes of issue—
 (a)in the case of any advertisement, invitation or document made in respect of any of the following to an intermediary licensed or registered for Type 1, Type 4 or Type 6 regulated activity, or a representative of such an intermediary that carries on such a regulated activity for the intermediary—
 (i)listed securities; or
 (ii)unlisted securities (excluding unlisted securities that are structured products); (Replaced 8 of 2011 s. 3)
 (b)in the case of any advertisement, invitation or document made in respect of futures contracts, to an intermediary licensed or registered for Type 2 or Type 5 regulated activity, or a representative of such intermediary that carries on such regulated activity for such intermediary; or
 (c)in the case of any advertisement, invitation or document made in respect of leveraged foreign exchange contracts, to—
 (i)an authorized financial institution; or
 (ii)an intermediary licensed for Type 3 regulated activity, or a representative of such intermediary that carries on such regulated activity for such intermediary.
 (7)A person shall not be regarded as committing an offence under subsection (1) by reason only that he issues, or has in his possession for the purposes of issue, any advertisement, invitation or document if—
 (a)the advertisement, invitation or document (as the case may be) was so issued, or possessed for the purposes of issue, in the ordinary course of a business (whether or not carried on by him), the principal purpose of which was receiving and issuing materials provided by others;
 (b)the contents of the advertisement, invitation or document (as the case may be) were not, wholly or partly, devised—
 (i)where the business was carried on by him, by himself or any officer, employee or agent of his; or
 (ii)where the business was not carried on by him, by himself; and
 (c)for the purposes of the issue—
 (i)where the business was carried on by him, he or any officer, employee or agent of his; or
 (ii)where the business was not carried on by him, he,
 did not select, add to, modify or otherwise exercise control over the contents of the advertisement, invitation or document (as the case may be).
 (8)A person shall not be regarded as committing an offence under subsection (1) by reason only that he issues by way of live broadcast, or has in his possession for the purposes of issue by way of live broadcast, any advertisement, invitation or document if—
 (a)the advertisement, invitation or document (as the case may be) was so issued, or possessed for the purposes of issue, in the ordinary course of the business of a broadcaster (whether or not he was such broadcaster);
 (b)the contents of the advertisement, invitation or document (as the case may be) were not, wholly or partly, devised—
 (i)where he was the broadcaster, by himself or any officer, employee or agent of his; or
 (ii)where he was not the broadcaster, by himself;
 (c)for the purposes of the issue—
 (i)where he was the broadcaster, he or any officer, employee or agent of his; or
 (ii)where he was not the broadcaster, he,
 did not select, add to, modify or otherwise exercise control over the contents of the advertisement, invitation or document (as the case may be); and
 (d)in relation to the broadcast—
 (i)where he was the broadcaster, he; or
 (ii)where he was not the broadcaster, he believed and had reasonable grounds to believe that the broadcaster,
 acted in accordance with the terms and conditions of the licence (if any) by which he or the broadcaster (as the case may be) became entitled to broadcast as a broadcaster and with any code of practice or guidelines (however described) issued under or pursuant to the Telecommunications Ordinance (Cap. 106) or the Broadcasting Ordinance (Cap. 562) and applicable to him or the broadcaster (as the case may be) as a broadcaster.
 (9)It is a defence to a charge for an offence under subsection (1) for the person charged to prove that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence with which he is charged.
 (10)For the purposes of any proceedings under this section—
 (a)an advertisement, invitation or document which consists of or contains information likely to lead, directly or indirectly, to the doing of any act referred to in subsection (1)(a) or (b) shall be regarded as an advertisement, invitation or document (as the case may be) which is or contains an invitation to do such act;
 (b)an advertisement, invitation or document which is or contains an invitation directed at, or the contents of which are likely to be accessed or read (whether concurrently or otherwise) by, the public shall be regarded as an advertisement, invitation or document (as the case may be) which is or contains an invitation to the public.
 (11)Nothing in subsection (2)(a), (b), (c) or (i) or (5)(a), (b) or (c) applies to anything done by any person in respect of any interest in a collective investment scheme that is not authorized by the Commission under section 104.
 (12)In this section—
 guaranteed (作出擔保) means guaranteed fully, unconditionally, irrevocably and in writing;
 registered company (註冊公司) means a company registered under the Companies Ordinance (Cap. 622) or the relevant Ordinance; (Amended 28 of 2012 ss. 912 & 920)
 relevant condition (有關條件), in relation to a corporation (including a wholly owned subsidiary of any other corporation), means a condition that the amount by which the aggregate of the corporation’s assets exceeds the aggregate of its liabilities, as calculated in accordance with generally accepted accounting principles, is not less than the sum specified in Part 4 of Schedule 4.
 104.Commission may authorize collective investment schemes
 (1)On an application to the Commission, the Commission may, where it considers appropriate, authorize any collective investment scheme, subject to the condition specified in subsection (2) and to any other conditions it considers appropriate.
 (2)It shall be a condition of authorization of a collective investment scheme under subsection (1) that at any time when the scheme is authorized—
 (a)there is an individual approved by the Commission under subsection (3) as an approved person for the purpose of being served by the Commission with notices and decisions for the scheme; and
 (b)the Commission is informed of particulars—
 (i)subject to subparagraph (ii), of the current contact details of the approved person referred to in paragraph (a), including, in so far as applicable, the address, telephone and facsimile numbers, and electronic mail address of the approved person;
 (ii)where there is any change in the contact details referred to in subparagraph (i), of the change, within 14 days after the change takes place.
 (3)For the purposes of subsection (2)(a), on an application by any person to the Commission, the Commission may, where it considers appropriate, approve any individual nominated in the application in respect of a collective investment scheme as an approved person for the purpose of being served by the Commission with notices and decisions for the scheme, and may, by notice in writing served on the person, withdraw the approval.
 (4)The Commission may at any time, by notice in writing served on the approved person for a collective investment scheme, amend or revoke any of the conditions (other than the condition specified in subsection (2)) imposed, or impose new conditions, in respect of the authorization granted under subsection (1) in respect of the scheme.
 (5)Without limiting any other ground on which the Commission may refuse to authorize any collective investment scheme under subsection (1), the Commission may refuse to do so where it is not satisfied that the authorization is in the interest of the investing public.
 (6)An application made pursuant to subsection (1) or (3) shall be accompanied by such information and documents as the Commission requires.
 (7)Where the Commission refuses to authorize a collective investment scheme, or to approve an individual as an approved person, pursuant to subsection (1) or (3), it shall by notice in writing notify the person making the application in question of the decision and the reasons for which it is made.
 (8)The Commission may publish in such manner as it considers appropriate particulars of any collective investment scheme authorized under subsection (1).
 (9)Particulars published under subsection (8) are not subsidiary legislation.
 104A.Commission may authorize structured products
 (1)On an application by any person, the Commission may authorize a structured product, subject to the condition specified in subsection (2) and to any other conditions it considers appropriate.
 (2)It is a condition of authorization of a structured product that, at any time when the product is authorized—
 (a)there is an individual approved by the Commission under subsection (3) as an approved person for the purpose of being served by the Commission with notices and decisions for the product; and
 (b)the Commission is informed—
 (i)subject to subparagraph (ii), of the current contact details of the approved person, including, as applicable, the address, telephone and facsimile numbers, and electronic mail address of the approved person;
 (ii)if there is any change in those contact details, of the change within 14 days after the change takes place.
 (3)For the purposes of subsection (2)(a), on an application by any person, the Commission may approve an individual nominated in the application in respect of a structured product as an approved person for the purpose of being served by the Commission with notices and decisions for the product.
 (4)The Commission may at any time, by notice in writing served on the approved person for a structured product—
 (a)amend or revoke any of the conditions (other than the condition specified in subsection (2)) imposed, or impose new conditions, in respect of the authorization of the product; or
 (b)withdraw the person’s approval under subsection (3).
 (5)Without limiting any other ground on which the Commission may refuse to authorize a structured product under subsection (1), the Commission may refuse to do so if it is not satisfied that the authorization is in the interest of the investing public.
 (6)An application made under subsection (1) or (3) must be accompanied by any information and documents that the Commission requires.
 (7)If the Commission refuses to authorize a structured product, or to approve an individual as an approved person, the Commission must notify the applicant in writing of the refusal and the reasons for it.
 (8)The Commission may publish, in any manner it considers appropriate, particulars of a structured product authorized under subsection (1).
 (9)Particulars published under subsection (8) are not subsidiary legislation.
 (Added 8 of 2011 s. 4)
 105.Commission may authorize issue of advertisements, invitations or documents
 (1)On an application to the Commission, the Commission may, where it considers appropriate, authorize the issue of any advertisement, invitation or document which is or contains an invitation to do any act referred to in section 103(1)(a) or (b), subject to the condition specified in subsection (2) and to any other conditions it considers appropriate, including conditions on the matter to which the advertisement, invitation or document relates.
 (2)It shall be a condition of authorization of the issue of any advertisement, invitation or document under subsection (1) that at any time when the issue is authorized—
 (a)there is an individual approved by the Commission under subsection (3) as an approved person for the purpose of being served by the Commission with notices and decisions for the issue; and
 (b)the Commission is informed of particulars—
 (i)subject to subparagraph (ii), of the current contact details of the approved person referred to in paragraph (a), including, in so far as applicable, the address, telephone and facsimile numbers, and electronic mail address of the approved person;
 (ii)where there is any change in the contact details referred to in subparagraph (i), of the change, within 14 days after the change takes place.
 (3)For the purposes of subsection (2)(a), on an application by any person to the Commission, the Commission may, where it considers appropriate, approve any individual nominated in the application in respect of the issue of any advertisement, invitation or document as an approved person for the purpose of being served by the Commission with notices and decisions for the issue, and may, by notice in writing served on the person, withdraw the approval.
 (4)The Commission may at any time, by notice in writing served on the approved person for the issue of any advertisement, invitation or document, amend or revoke any of the conditions (other than the condition specified in subsection (2)) imposed, or impose new conditions, in respect of the authorization granted under subsection (1) in respect of the issue.
 (5)Without limiting any other ground on which the Commission may refuse to authorize the issue of any advertisement, invitation or document under subsection (1), the Commission may refuse to do so where it is not satisfied that the matter to which the advertisement, invitation or document relates is in the interest of the investing public.
 (6)An application made pursuant to subsection (1) or (3) shall be accompanied by such information and documents as the Commission requires.
 (7)Where the Commission refuses to authorize the issue of any advertisement, invitation or document, or to approve an individual as an approved person, pursuant to subsection (1) or (3), it shall by notice in writing notify the person making the application in question of the decision and the reasons for which it is made.
 106.Withdrawal of authorization under section 104, 104A or 105, etc.
 (Amended 8 of 2011 s. 5)
 (1)Subject to subsection (5), where, in relation to an authorization of a collective investment scheme under section 104, an authorization of a structured product under section 104A, or an authorization of the issue of an advertisement, invitation or document under section 105, the Commission decides that—  (Amended 8 of 2011 s. 5)
 (a)any information provided to the Commission pursuant to section 104(6), 104A(6) or 105(6) (as the case may be) was at the time when it was provided false or misleading in a material particular;
 (b)any of the conditions imposed in respect of the authorization under section 104, 104A or 105 (as the case may be) are not being complied with;
 (c)any information provided to the Commission in purported compliance with any of the conditions imposed in respect of the authorization under section 104, 104A or 105 (as the case may be) was at the time when it was provided false or misleading in a material particular; or
 (d)it is desirable to withdraw the authorization in order to protect the interest of the investing public,
 the Commission may withdraw the authorization. (Amended 8 of 2011 s. 5)
 (2)Subject to subsection (3), the Commission must withdraw the authorization of a collective investment scheme, a structured product or the issue of an advertisement, invitation or document on a request in writing made by the approved person for the scheme, product or issue (as the case may be). (Replaced 8 of 2011 s. 5)
 (3)Subject to subsection (5), the Commission may refuse to withdraw an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (2) where it considers that—  (Amended 8 of 2011 s. 5)
 (a)in the case of an authorization of a collective investment scheme or structured product, it is in the public interest that any matter concerning the scheme or product should be investigated before the authorization is withdrawn under subsection (2); or (Amended 8 of 2011 s. 5)
 (b)the withdrawal of the authorization would not be in the interest of the investing public.
 (4)Subject to subsection (5), where the Commission withdraws an authorization under subsection (1) or (2), it may impose such conditions on the withdrawal of the authorization as it considers appropriate.
 (5)The Commission shall not—
 (a)withdraw an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (1);
 (b)refuse to withdraw an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (3); or
 (c)impose any conditions on the withdrawal of an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (4),
 without first giving the approved person for the scheme, the product or the issue (as the case may be) a reasonable opportunity of being heard. (Amended 8 of 2011 s. 5)
 (6)Where the Commission—
 (a)withdraws an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (1);
 (b)withdraws an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (2);
 (c)refuses to withdraw an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (3); or
 (d)imposes any conditions on the withdrawal of an authorization of a collective investment scheme or structured product or of the issue of an advertisement, invitation or document under subsection (4),
 it shall by notice in writing notify the approved person for the scheme, the product or the issue (as the case may be) of the decision and, in the case of paragraph (a), (c) or (d), the reasons for which it is made. (Amended 8 of 2011 s. 5)
 (7)Where the Commission withdraws an authorization under subsection (1) or (2), it may publish notice of the withdrawal and the reasons therefor in such manner as it considers appropriate.
 (8)A notice or any other matter published under subsection (7) is not subsidiary legislation.
 107.Offence to fraudulently or recklessly induce others to invest money
 (1)A person commits an offence if he makes any fraudulent misrepresentation or reckless misrepresentation for the purpose of inducing another person—
 (a)to enter into or offer to enter into—
 (i)an agreement to acquire, dispose of, subscribe for or underwrite securities; or
 (ii)a regulated investment agreement or an agreement to acquire, dispose of, subscribe for or underwrite any other structured product; or (Replaced 8 of 2011 s. 6)
 (b)to acquire an interest in or participate in, or offer to acquire an interest in or participate in, a collective investment scheme.
 (2)A person who commits an offence under subsection (1) is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (3)For the purposes of this section—
 (a)
 fraudulent misrepresentation (欺詐的失實陳述) means—
 (i)any statement which, at the time when it is made, is to the knowledge of its maker false, misleading or deceptive;
 (ii)any promise which, at the time when it is made, its maker has no intention of fulfilling, or is to the knowledge of its maker not capable of being fulfilled;
 (iii)any forecast which, at the time when it is made, is to the knowledge of its maker not justified on the facts then known to him; or
 (iv)any statement or forecast from which, at the time when it is made, its maker intentionally omits a material fact, with the result that—
 (A)in the case of the statement, the statement is rendered false, misleading or deceptive; or
 (B)in the case of the forecast, the forecast is rendered misleading or deceptive;
 (b)
 reckless misrepresentation (罔顧實情的失實陳述) means—
 (i)any statement which, at the time when it is made, is false, misleading or deceptive and is made recklessly;
 (ii)any promise which, at the time when it is made, is not capable of being fulfilled and is made recklessly;
 (iii)any forecast which, at the time when it is made, is not justified on the facts then known to its maker and is made recklessly; or
 (iv)any statement or forecast from which, at the time when it is made, its maker recklessly omits a material fact, with the result that—
 (A)in the case of the statement, the statement is rendered false, misleading or deceptive; or
 (B)in the case of the forecast, the forecast is rendered misleading or deceptive.
 108.Civil liability for inducing others to invest money in certain cases
 (1)Where a person makes any fraudulent misrepresentation, reckless misrepresentation or negligent misrepresentation by which another person is induced—
 (a)to enter into or offer to enter into—
 (i)an agreement to acquire, dispose of, subscribe for or underwrite securities; or
 (ii)a regulated investment agreement or an agreement to acquire, dispose of, subscribe for or underwrite any other structured product; or (Replaced 8 of 2011 s. 7)
 (b)to acquire an interest in or participate in, or offer to acquire an interest in or participate in, a collective investment scheme,
 the first-mentioned person shall, whether or not he also incurs any other liability (whether under this Part or otherwise), be liable to pay compensation by way of damages to the other person for any pecuniary loss that the other person has sustained as a result of the reliance by the other person on the misrepresentation.
 (2)For the purposes of this section, where a company or other body corporate has made any fraudulent misrepresentation, reckless misrepresentation or negligent misrepresentation by which another person is induced to do any act referred to in subsection (1)(a) or (b), any person who was a director of the company or body corporate at the time when the misrepresentation was made shall, unless it is proved that he did not authorize the making of the misrepresentation, be presumed also to have made the misrepresentation.
 (3)For the avoidance of doubt, where a court has jurisdiction to determine an action brought under subsection (1), it may, where it is, apart from this section, within its jurisdiction to entertain an application for an injunction, grant an injunction in addition to, or in substitution for, damages, on such terms and conditions as it considers appropriate.
 (4)This section does not confer a right of action in any case to which section 40 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) (whether with or without reference to section 342E of that Ordinance) applies. (Amended 28 of 2012 ss. 912 & 920)
 (5)A person may bring an action under subsection (1) even though the person against whom the action is brought has not been charged with or convicted of an offence by reason of a contravention of this Part.
 (6)Nothing in this section affects, limits or diminishes any rights conferred on a person, or any liabilities a person may incur, under the common law or any other enactment.
 (7)For the purposes of this section—
 (a)
 fraudulent misrepresentation (欺詐的失實陳述) means—
 (i)any statement which, at the time when it is made, is to the knowledge of its maker false, misleading or deceptive;
 (ii)any promise which, at the time when it is made, its maker has no intention of fulfilling, or is to the knowledge of its maker not capable of being fulfilled;
 (iii)any forecast which, at the time when it is made, is to the knowledge of its maker not justified on the facts then known to him; or
 (iv)any statement or forecast from which, at the time when it is made, its maker intentionally omits a material fact, with the result that—
 (A)in the case of the statement, the statement is rendered false, misleading or deceptive; or
 (B)in the case of the forecast, the forecast is rendered misleading or deceptive;
 (b)
 reckless misrepresentation (罔顧實情的失實陳述) means—
 (i)any statement which, at the time when it is made, is false, misleading or deceptive and is made recklessly;
 (ii)any promise which, at the time when it is made, is not capable of being fulfilled and is made recklessly;
 (iii)any forecast which, at the time when it is made, is not justified on the facts then known to its maker and is made recklessly; or
 (iv)any statement or forecast from which, at the time when it is made, its maker recklessly omits a material fact, with the result that—
 (A)in the case of the statement, the statement is rendered false, misleading or deceptive; or
 (B)in the case of the forecast, the forecast is rendered misleading or deceptive;
 (c)
 negligent misrepresentation (疏忽的失實陳述) means—
 (i)any statement which, at the time when it is made, is false, misleading or deceptive and is made without reasonable care having been taken to ensure its accuracy;
 (ii)any promise which, at the time when it is made, is not capable of being fulfilled and is made without reasonable care having been taken to ensure that it can be fulfilled;
 (iii)any forecast which, at the time when it is made, is not justified on the facts then known to its maker and is made without reasonable care having been taken to ensure the accuracy of those facts; or
 (iv)any statement or forecast from which, at the time when it is made, its maker negligently omits a material fact, with the result that—
 (A)in the case of the statement, the statement is rendered false, misleading or deceptive; or
 (B)in the case of the forecast, the forecast is rendered misleading or deceptive.
 109.Offence to issue advertisements relating to carrying on of regulated activities, etc.
 (1)Subject to subsections (3) to (6), a person commits an offence if he issues, or has in his possession for the purposes of issue—
 (a)an advertisement in which to his knowledge—
 (i)a person holds himself out as being prepared to carry on Type 4, Type 5, Type 6 or Type 9 regulated activity; and
 (ii)the person is not licensed or registered for such regulated activity as required under this Ordinance; or
 (b)any document which to his knowledge contains such advertisement.
 (2)A person who commits an offence under subsection (1) is liable on conviction to a fine at level 5 and to imprisonment for 6 months.
 (3)A person shall not be regarded as committing an offence under subsection (1) by reason only that he issues any advertisement or document, or has any advertisement or document in his possession for the purposes of issue—
 (a)in the case of an advertisement in which a person holds himself out as being prepared to carry on Type 4 regulated activity, to an intermediary licensed or registered for Type 4 regulated activity, or a representative of such intermediary that carries on such regulated activity for such intermediary;
 (b)in the case of an advertisement in which a person holds himself out as being prepared to carry on Type 5 regulated activity, to an intermediary licensed or registered for Type 5 regulated activity, or a representative of such intermediary that carries on such regulated activity for such intermediary;
 (c)in the case of an advertisement in which a person holds himself out as being prepared to carry on Type 6 regulated activity, to an intermediary licensed or registered for Type 6 regulated activity, or a representative of such intermediary that carries on such regulated activity for such intermediary; or
 (d)in the case of an advertisement in which a person holds himself out as being prepared to carry on Type 9 regulated activity, to an intermediary licensed or registered for Type 9 regulated activity, or a representative of such intermediary that carries on such regulated activity for such intermediary.
 (4)A person shall not be regarded as committing an offence under subsection (1) by reason only that he issues, or has in his possession for the purposes of issue, any advertisement or document if—
 (a)the advertisement or document (as the case may be) was so issued, or possessed for the purposes of issue, in the ordinary course of a business (whether or not carried on by him), the principal purpose of which was receiving and issuing materials provided by others;
 (b)the contents of the advertisement or document (as the case may be) were not, wholly or partly, devised—
 (i)where the business was carried on by him, by himself or any officer, employee or agent of his; or
 (ii)where the business was not carried on by him, by himself; and
 (c)for the purposes of the issue—
 (i)where the business was carried on by him, he or any officer, employee or agent of his; or
 (ii)where the business was not carried on by him, he,
 did not select, add to, modify or otherwise exercise control over the contents of the advertisement or document (as the case may be).
 (5)A person shall not be regarded as committing an offence under subsection (1) by reason only that he issues by way of live broadcast, or has in his possession for the purposes of issue by way of live broadcast, any advertisement or document if—
 (a)the advertisement or document (as the case may be) was so issued, or possessed for the purposes of issue, in the ordinary course of the business of a broadcaster (whether or not he was such broadcaster);
 (b)the contents of the advertisement or document (as the case may be) were not, wholly or partly, devised—
 (i)where he was the broadcaster, by himself or any officer, employee or agent of his; or
 (ii)where he was not the broadcaster, by himself;
 (c)for the purposes of the issue—
 (i)where he was the broadcaster, he or any officer, employee or agent of his; or
 (ii)where he was not the broadcaster, he,
 did not select, add to, modify or otherwise exercise control over the contents of the advertisement or document (as the case may be); and
 (d)in relation to the broadcast—
 (i)where he was the broadcaster, he; or
 (ii)where he was not the broadcaster, he believed and had reasonable grounds to believe that the broadcaster,
 acted in accordance with the terms and conditions of the licence (if any) by which he or the broadcaster (as the case may be) became entitled to broadcast as a broadcaster and with any code of practice or guidelines (however described) issued under or pursuant to the Telecommunications Ordinance (Cap. 106) or the Broadcasting Ordinance (Cap. 562) and applicable to him or the broadcaster (as the case may be) as a broadcaster.
 (6)It is a defence to a charge for an offence under subsection (1) for the person charged to prove that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence with which he is charged.
 Division 3Miscellaneous
 110.Submission of information to Commission
 (1)A person that is—
 (a)an authorized financial institution;
 (b)an exempted body or, in the case of a wholly owned subsidiary specified in item 11 of Part 3 of Schedule 4 but incorporated outside Hong Kong, an authorized representative of that subsidiary;
 (c)a multilateral agency or an authorized representative of that agency; or
 (d)a bank incorporated outside Hong Kong or an authorized representative of that bank,
 commits an offence if he fails, within 10 business days, or such longer period as is prescribed by rules made under section 397 for the purposes of this subsection, after the issue of any advertisement, invitation or document referred to in section 103(3)(e), (f) or (g) by the authorized financial institution, the exempted body or the wholly owned subsidiary, the multilateral agency or the bank (as the case may be), to submit to the Commission such information in respect of the advertisement, invitation or document as is prescribed by the rules.
 (2)A person who commits an offence under subsection (1) is liable on conviction to a fine at level 5 and, in the case of a continuing offence, to a further fine of $5,000 for every day during which the offence continues.
 (3)
 In subsection (1), authorized representative (獲授權代表), in relation to the issue of any advertisement, invitation or document, means—
 (a)in the case of a wholly owned subsidiary specified in item 11 of Part 3 of Schedule 4 but incorporated outside Hong Kong, the listed corporation of which it is the subsidiary; or
 (b)in the case of a multilateral agency or a bank incorporated outside Hong Kong, a person resident in Hong Kong who is authorized by the agency or the bank (as the case may be) to act on behalf of the agency or the bank (as the case may be) in respect of that issue.
 111.Service of notices, etc. on approved persons
 (1)Notwithstanding section 400, any written notice, decision or direction or other document (however described) to be, or required to be, issued or served (however described) to or on an approved person by the Commission for the purposes of this Ordinance shall for all purposes be regarded as duly issued or served only if—
 (a)it is delivered to him by hand; or
 (b)it is—
 (i)left at, or sent by post to, the last address;
 (ii)sent by facsimile transmission to the last facsimile number; or
 (iii)sent by electronic mail transmission to the last electronic mail address,
 shown by the particulars of which the Commission is informed in respect of the approved person for the purposes of section 104(2)(b), 104A(2)(b) or 105(2)(b) (as the case may be). (Amended 8 of 2011 s. 8)
 (2)Where a notice, decision or direction or other document (however described) is regarded as duly issued or served to or on an approved person under subsection (1)(b), it shall for all purposes be regarded as issued or served to or on the approved person, and as coming to his notice, at the time when—
 (a)where it is left at an address, it is so left at that address;
 (b)where it is sent by post to an address, it would in the ordinary course of post be delivered to that address;
 (c)where it is sent by facsimile transmission to a facsimile number, it would in the ordinary course of transmission by facsimile be received at that number; or
 (d)where it is sent by electronic mail transmission to an electronic mail address, it would in the ordinary course of transmission by electronic mail be received at that address.
 112.Amendment of Schedule 4
 (1)The Financial Secretary may, by notice published in the Gazette, amend Part 1 of Schedule 4.
 (2)The Commission may, after consultation with the Financial Secretary, by notice published in the Gazette, amend Parts 2, 3 and 4 of Schedule 4.
 Part IVA
 Open-ended Fund Companies
 (Part IVA added 16 of 2016 s. 6)
 Division 1Preliminary
 112A.Interpretation of Part IVA
 In this Part—
 certificate of re-domiciliation (遷冊證明書) means a certificate issued under section 112ZJC(3)(b); (Added 33 of 2021 s. 3)
 non-Hong Kong fund corporation (非香港基金法團) has the meaning given by section 112ZJA(1); (Added 33 of 2021 s. 3)
 OFC rules (《開放式基金型公司規則》) means rules made under section 112ZK, 112ZL or 112ZM;
 open-ended fund company (開放式基金型公司) means a collective investment scheme constituted as a corporation that holds— (Amended 33 of 2021 s. 3)
 (a)a certificate of incorporation issued under section 112C; or
 (b)a certificate of re-domiciliation; (Amended 33 of 2021 s. 3)
 proposed company (擬成立公司) means a company intended to be incorporated under this Part;
 re-domiciled OFC (經遷冊公司) means an open-ended fund company that has become such a company under Division 8A; (Added 33 of 2021 s. 3)
 scheme property (計劃財產), in relation to an open-ended fund company, means the property under the collective investment scheme that is constituted as the company;
 sub-custodian (次保管人), in relation to an open-ended fund company, means a person to whom any scheme property of the company is entrusted for safe keeping, other than the custodian of the company;
 sub-fund (子基金)—see section 112R.
 112B.Prohibition against carrying on business as open-ended fund company without registration etc.
 (1)A person, not being an open-ended fund company that is registered under section 112D, must not—
 (a)carry on business as an open-ended fund company; or
 (b)hold out as an open-ended fund company.
 (2)A person must not manage any property on behalf of another person who, not being an open-ended fund company that is registered under section 112D—
 (a)carries on business as an open-ended fund company; or
 (b)holds out as an open-ended fund company.
 (3)A person must not hold out as acting on behalf of another person who, not being an open-ended fund company that is registered under section 112D—
 (a)carries on business as an open-ended fund company; or
 (b)holds out as an open-ended fund company.
 (4)A person who, without reasonable excuse, contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $5,000,000 and to imprisonment for 7 years and, in the case of a continuing offence, to a further fine of $100,000 for each day during which the offence continues; or
 (b)on summary conviction to a fine of $500,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $10,000 for each day during which the offence continues.
 (5)A person who, without reasonable excuse, contravenes subsection (2) or (3) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $20,000 for each day during which the offence continues; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months and, in the case of a continuing offence, to a further fine of $2,000 for each day during which the offence continues.
 Division 2Incorporation, Registration, Name and Registered Office
 112C.Incorporation of open-ended fund company
 (1)Any person may incorporate a company under this Part by delivering to the Registrar of Companies for registration—
 (a)an incorporation form prescribed by the OFC rules; and
 (b)a copy of the instrument of incorporation of the proposed company that has been signed in accordance with the OFC rules.
 (2)The documents specified in subsection (1)—
 (a)must be delivered in the manner prescribed by the OFC rules; and
 (b)must be accompanied by any document or information prescribed by the OFC rules.
 (3)Subject to subsection (4), if the Registrar of Companies is satisfied that the requirements for incorporation prescribed by the OFC rules are met with respect to the proposed company, the Registrar—
 (a)must register the documents delivered under subsection (1); and
 (b)must issue a certificate of incorporation in respect of the proposed company certifying that it is a company incorporated under this Part.
 (4)The Registrar of Companies must not register the relevant documents or issue a certificate of incorporation under subsection (3) unless the Registrar has been notified of the registration of the proposed company under section 112D(7).
 112D.Application for registration with Commission before incorporation
 (1)On an application by a person, the Commission may register a proposed company for the purposes of this Part.
 (2)An application for the purposes of subsection (1)—
 (a)must be made in the manner specified by the Commission; and
 (b)must be accompanied by any document or information that the Commission requires.
 (3)The registration of a proposed company takes effect on the day on which a certificate of incorporation is issued by the Registrar of Companies under section 112C(3)(b) in respect of it.
 (4)The Commission must refuse to register a proposed company unless it is satisfied that the requirements for registration specified in section 112E will, on the day on which the registration takes effect, be met with respect to the company.
 (5)Without limiting any other ground on which the Commission may refuse to register a proposed company, the Commission may refuse to do so if it is not satisfied that the registration is in the interest of the investing public.
 (6)On registering a proposed company, the Commission may impose any condition that it considers appropriate.
 (7)The Commission must, as soon as reasonably practicable after registering a proposed company under subsection (1), notify the Registrar of Companies in writing of the registration.
 (8)The Commission must, as soon as reasonably practicable after refusing to register a proposed company under subsection (1), notify the applicant in writing of the refusal and the reasons for it.
 112E.Requirements for registration
 The requirements for registration specified for the purposes of section 112D(4) or 112ZJB(3) are— (Amended 33 of 2021 s. 4)
 (a)the requirements relating to the name of an open-ended fund company as set out in section 112H(2), (3), (4) and (5);
 (b)the requirement relating to the registered office of an open-ended fund company as set out in section 112I;
 (c)the requirements relating to directors of an open-ended fund company as set out in sections 112U(1), 112V(1), 112W(1) and 112X(1);
 (d)the requirements relating to an investment manager of an open-ended fund company as set out in section 112Z;
 (e)the requirement relating to a custodian of an open-ended fund company as set out in section 112ZA(1); and
 (f)any other requirements for registration prescribed by the OFC rules.
 112F.Commission may amend conditions of registration
 The Commission may, by notice in writing served on an open-ended fund company, amend or revoke any of the conditions imposed, or impose new conditions, in respect of its registration.
 112G.Publication of particulars of open-ended fund company
 (1)The Commission may publish, in any manner it considers appropriate, particulars of an open-ended fund company.
 (2)Particulars published under subsection (1) are not subsidiary legislation.
 112H.Name of open-ended fund company
 (1)The name of an open-ended fund company is—
 (a)the name stated in— (Amended 33 of 2021 s. 5)
 (i)for a company incorporated under section 112C—its certificate of incorporation; or
 (ii)for a re-domiciled OFC—its certificate of re-domiciliation; or (Amended 33 of 2021 s. 5)
 (b)if a change of name has effect under the OFC rules, its new name.
 (2)The name of an open-ended fund company must not—
 (a)in the opinion of the Commission, be misleading or otherwise undesirable; or
 (b)be the same as the name of another existing open-ended fund company.
 (3)For an open-ended fund company that has an English name only, the name must end with “Open-ended Fund Company” or “OFC”.
 (4)For an open-ended fund company that has a Chinese name only, the name must end with “開放式基金型公司”.
 (5)For an open-ended fund company that has both an English name and a Chinese name—
 (a)the English name must end with “Open-ended Fund Company” or “OFC”; and
 (b)the Chinese name must end with “開放式基金型公司”.
 112I.Registered office of open-ended fund company
 An open-ended fund company must have a registered office in Hong Kong to which all communications and notices may be addressed.
 Division 3Capacity and Powers
 112J.Capacity of open-ended fund company
 An open-ended fund company has the capacity, rights, powers and privileges as are prescribed by the OFC rules.
 112K.Instrument of incorporation of open-ended fund company
 (1)An open-ended fund company must have an instrument of incorporation prescribing regulations for the company.
 (2)The instrument of incorporation of an open-ended fund company must contain—
 (a)the name of the company;
 (b)a statement that the registered office of the company is situated in Hong Kong;
 (c)the objects of the company;
 (d)provision as to the kinds of property in which the company is to invest;
 (e)a statement that the company is an open-ended fund company with variable share capital;
 (f)a statement that the amount of the paid-up share capital of the company is at all times equal to the net asset value of the company;
 (g)a statement that the company’s shareholders are not liable for the debts of the company;
 (h)a statement that the company’s scheme property is entrusted to a custodian of the company for safe keeping in compliance with the law; and
 (i)any other matters prescribed by the OFC rules.
 (3)For an open-ended fund company with sub-funds, its instrument of incorporation must also contain a statement that the assets of a sub-fund of the company belong exclusively to the sub-fund and are not to be used to discharge the liabilities of, or the claims against, any other person, including the company and any other sub-fund of the company.
 112L.Effect of instrument of incorporation
 (1)Subject to this Ordinance, the instrument of incorporation of an open-ended fund company, once registered under this Ordinance—
 (a)has effect as a contract under seal—
 (i)between the company and each shareholder; and
 (ii)between a shareholder and each other shareholder; and
 (b)is to be regarded as containing covenants on the part of the company and of each shareholder to observe all the provisions of the instrument.
 (2)Without limiting subsection (1), the instrument of incorporation of an open-ended fund company is enforceable—
 (a)by the company against each shareholder;
 (b)by a shareholder against the company; and
 (c)by a shareholder against each other shareholder.
 (3)Money payable by a shareholder to an open-ended fund company under its instrument of incorporation—
 (a)is a debt due from the shareholder to the company; and
 (b)is of the nature of a specialty debt.
 Division 4Contracts
 112M.Contracts made by or on behalf of open-ended fund company
 (1)This section applies to—
 (a)a contract that would be required by law to be in writing and under seal if made between natural persons;
 (b)a contract that would be required by law to be in writing, and to be signed by the parties to the contract, if made between natural persons; and
 (c)a contract that, though made orally and not in writing, would by law be valid if made between natural persons.
 (2)A contract specified in subsection (1)(a) may be made by an open-ended fund company—
 (a)in writing under the company’s common seal (if any); or
 (b)in writing executed in accordance with the OFC rules and expressed (in whatever words) to be executed by the company.
 (3)A contract specified in subsection (1)(b) may be made on behalf of an open-ended fund company in writing signed by any person acting with the company’s authority (whether express or implied).
 (4)A contract specified in subsection (1)(c) may be made on behalf of an open-ended fund company orally by any person acting with the company’s authority (whether express or implied).
 (5)A contract made by or on behalf of an open-ended fund company in accordance with this section—
 (a)is effective in law; and
 (b)binds the company and its successors and all other parties to the contract.
 (6)A contract made in accordance with this section may be varied or discharged in the same manner in which it is authorized by this section to be made.
 112N.Contracts made before open-ended fund company’s incorporation
 (1)This section applies if a contract purports to have been made in the name or on behalf of an open-ended fund company before the company was incorporated.
 (2)Subject to any express agreement to the contrary—
 (a)the contract has effect as a contract made by the person purporting to act for the company or as an agent for the company; and
 (b)the person is personally liable on the contract and is entitled to enforce the contract.
 (3)After incorporation, the company may ratify the contract to the same extent as if—
 (a)the company had already been incorporated when the contract was made; and
 (b)the contract had been made on the company’s behalf by an agent acting without the company’s authority.
 (4)Despite subsection (2)(b), if the contract is ratified by the company, then on and after the ratification, the liability of the person mentioned in that subsection is not greater than the liability that the person would have incurred if the person had made the contract after the company’s incorporation as an agent acting without the company’s authority.
 112O.Contracts made after cancellation of registration
 If—
 (a)an open-ended fund company makes a contract after its registration has been cancelled under section 112ZH or 112ZI; and
 (b)the company fails to comply with any obligation under the contract within 21 days of being called on to do so by the other party to the contract,
 the person who has authorized the contract is liable, and if the contract was authorized by 2 or more persons, they are jointly and severally liable, to indemnify that other party in respect of any loss or damage suffered by that other party by reason of the company’s failure to comply with the obligation.
 Division 5Share Capital and Shareholders’ Liability
 112P.Share capital of open-ended fund company
 (1)An open-ended fund company may issue shares.
 (2)Shares in an open-ended fund company have no nominal value.
 (3)The amount of the paid-up share capital of an open-ended fund company is at all times equal to the net asset value of the company.
 (4)In this section—
 net asset value (淨資產值), in relation to an open-ended fund company, means the balance after deducting the total liabilities of the company from its total assets.
 112Q.Shareholders’ liability
 The liability of the shareholders of an open-ended fund company is limited to any amount unpaid on the shares held by the shareholders.
 Division 6Sub-funds
 112R.Sub-funds of open-ended fund company
 (1)The instrument of incorporation of an open-ended fund company may provide for the division of its scheme property into separate parts.
 (2)Each separate part of the scheme property of an open-ended fund company is a sub-fund of the company.
 112S.Segregated liability of sub-funds
 (1)The assets of a sub-fund of an open-ended fund company belong exclusively to the sub-fund and must not be used to discharge the liabilities of, or the claims against, any other person, including the company and any other sub-fund of the company.
 (2)Any liability incurred on behalf of, or attributable to, a sub-fund of an open-ended fund company may only be discharged out of the assets of the sub-fund.
 (3)A provision contained in the instrument of incorporation of an open-ended fund company, or in a contract or any other instrument made or executed by an open-ended fund company, is void to the extent that it is inconsistent with subsection (1) or (2).
 (4)An application of, or agreement to apply, assets of a sub-fund of an open-ended fund company in contravention of subsection (1) or (2) is void.
 (5)An open-ended fund company with sub-funds may allocate any assets or liabilities that—
 (a)it receives or incurs—
 (i)on behalf of its sub-funds; or
 (ii)in order to enable the operation of its sub-funds; and
 (b)are not attributable to any particular sub-fund,
 between its sub-funds in a manner that it considers is fair to its shareholders.
 (6)A sub-fund of an open-ended fund company is not a legal person separate from the company but the assets of the sub-fund may be subject to orders of the court as if it were a separate legal person.
 (7)Without affecting subsections (1) and (2) and except as provided by the OFC rules, an open-ended fund company may sue and be sued in respect of any sub-fund of the company and may exercise the same rights of set-off in relation to the sub-fund as apply in respect of companies.
 Division 7Directors, Investment Manager, Custodian, Sub-custodian and Auditor
 112T.Interpretation of Division 7 of Part IVA
 In this Division—
 misconduct (失當行為)—
 (a)in relation to a director of an open-ended fund company, means negligence, default, breach of duty or breach of trust on the part of the director occurring in the course of performing duties as a director in relation to the company;
 (b)in relation to an investment manager of an open-ended fund company, means negligence, default, breach of duty or breach of trust on the part of the investment manager occurring in the course of performing duties as an investment manager in relation to the company;
 (c)in relation to a custodian of an open-ended fund company, means negligence, default, breach of duty or breach of trust on the part of the custodian occurring in the course of performing duties as a custodian in relation to the company;
 (d)in relation to a sub-custodian of an open-ended fund company, means negligence, default, breach of duty or breach of trust on the part of the sub-custodian occurring in the course of performing duties as a sub-custodian in relation to the company; and
 (e)in relation to an auditor of an open-ended fund company, means negligence, default, breach of duty or breach of trust on the part of the auditor occurring in the course of performing duties as an auditor in relation to the company;
 specified officer (指明人員), in relation to an open-ended fund company, means—
 (a)a director of the company;
 (b)an investment manager of the company;
 (c)a custodian of the company;
 (d)a sub-custodian of the company; or
 (e)an auditor of the company.
 112U.Directors
 (1)An open-ended fund company must have at least 2 directors.
 (2)The first directors of an open-ended fund company are the persons named as directors in— (Amended 33 of 2021 s. 6)
 (a)for a company incorporated under section 112C—the incorporation form delivered to the Registrar of Companies under section 112C(1)(a); or
 (b)for a re-domiciled OFC—the re-domiciliation form delivered to the Registrar of Companies under section 112ZJC(1)(a). (Amended 33 of 2021 s. 6)
 (3)A director of an open-ended fund company owes the open-ended fund company—
 (a)the same fiduciary duties that are owed by a director of an ordinary company to the ordinary company; and
 (b)the duty to exercise reasonable care, skill and diligence that is owed by a director of an ordinary company to the ordinary company under section 465 of the Companies Ordinance (Cap. 622).
 (4)In the case of a breach or threatened breach by a director of an open-ended fund company of any of the director’s duties referred to in subsection (3), the director is liable to the same consequences as would apply if the director were a director of an ordinary company.
 (5)In this section—
 ordinary company (普通公司) means a company formed and registered under the Companies Ordinance (Cap. 622).
 112V.Restrictions on body corporate being director
 (1)A body corporate must not be appointed a director of an open-ended fund company.
 (2)An appointment made in contravention of subsection (1) is void.
 (3)However, this section does not affect any liability of a body corporate under this Ordinance for—
 (a)purporting to act as a director of an open-ended fund company; or
 (b)acting as a shadow director of an open-ended fund company.
 112W.Minimum age for appointment as director
 (1)A person must not be appointed a director of an open-ended fund company unless at the time of appointment the person has attained the age of 18 years.
 (2)An appointment made in contravention of subsection (1) is void.
 (3)However, this section does not affect any liability of a person below the age of 18 years under this Ordinance for—
 (a)purporting to act as a director of an open-ended fund company; or
 (b)acting as a shadow director of an open-ended fund company.
 112X.Provisions as to undischarged bankrupt acting as director
 (1)A person who is an undischarged bankrupt must not, except with the leave of the Court of First Instance by which the person was adjudged bankrupt—
 (a)act as a director of an open-ended fund company; or
 (b)directly or indirectly, be concerned, or take part, in the management of an open-ended fund company.
 (2)A person who contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $700,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine of $150,000 and to imprisonment for 1 year.
 (3)The Court of First Instance must not give leave for the purposes of this section unless a notice of the intention to apply for it has been served on the Official Receiver.
 (4)If the Official Receiver is of opinion that it is contrary to the public interest that an application for leave should be granted, the Official Receiver must attend the hearing of, and oppose the granting of, the application.
 112Y.Validity of acts of director
 (1)The acts of a person acting as a director of an open-ended fund company are valid even though it is afterwards discovered—
 (a)that there was a defect in the appointment of the person as a director;
 (b)that the person was not qualified to hold office as a director or was disqualified from holding office as a director;
 (c)that the person had ceased to hold office as a director; or
 (d)that the person was not entitled to vote on the matter in question.
 (2)Subsection (1) applies even if the appointment of the person as a director is void under section 112V or 112W.
 112Z.Investment manager
 (1)An open-ended fund company must have an investment manager who is responsible for managing the scheme property of the company.
 (2)An investment manager of an open-ended fund company must be an intermediary licensed or registered for Type 9 regulated activity.
 112ZA.Custodian
 (1)An open-ended fund company must have a custodian.
 (2)All the scheme property of an open-ended fund company must be entrusted to a custodian of the company for safe keeping.
 (3)Despite subsection (2), any scheme property of a class or description specified by the Commission for the purposes of this subsection is not required to be entrusted to a custodian.
 (4)A custodian of an open-ended fund company must take reasonable care, skill and diligence to ensure the safe keeping of the scheme property of the company that is entrusted to the custodian under subsection (2).
 (5)This section does not prohibit either of the following persons from entrusting, by an agreement in writing, to another person for safe keeping any or all of the scheme property of an open-ended fund company that is entrusted to the first-mentioned person—
 (a)a custodian of the company;
 (b)a person to whom any scheme property of the company is entrusted for safe keeping under an agreement in writing, other than the custodian of the company.
 112ZB.Auditor
 An open-ended fund company must appoint an auditor for each financial year of the company.
 112ZC.Provision protecting specified officer from liability void
 (1)This section applies to a provision contained in—
 (a)the instrument of incorporation of an open-ended fund company; or
 (b)a contract, or any other instrument, made or executed by an open-ended fund company.
 (2)If a provision purports to exempt a specified officer of the company from any liability that would otherwise attach to the officer in connection with the officer’s misconduct, the provision is void.
 (3)If, by a provision, the company directly or indirectly provides an indemnity for a specified officer of the company against any liability attaching to the officer in connection with the officer’s misconduct, the provision is void.
 112ZD.Court of First Instance may grant specified officer relief in proceedings for misconduct
 (1)This section applies if, in any proceedings for any misconduct against a specified officer of an open-ended fund company, it appears to the Court of First Instance that the officer—
 (a)is or may be liable for the misconduct;
 (b)has acted honestly and reasonably; and
 (c)ought fairly to be excused for the misconduct, having regard to all the circumstances of the case (including those connected with the officer’s appointment).
 (2)The Court of First Instance may relieve the specified officer, either wholly or partly, from the liability on any terms that the Court thinks fit.
 (3)If the case is tried by a judge with a jury, the judge may—
 (a)withdraw the case in whole or in part from the jury; and
 (b)direct judgment to be entered for the specified officer on any terms as to costs or otherwise that the judge thinks fit.
 (4)To avoid doubt, this section does not apply in relation to criminal proceedings.
 112ZE.Court of First Instance may grant specified officer relief for misconduct on specified officer’s application
 (1)A specified officer of an open-ended fund company may apply to the Court of First Instance for relief if the officer has reason to apprehend that a claim will or might be made against the officer for any misconduct.
 (2)On an application by a specified officer of an open-ended fund company, the Court of First Instance may relieve the officer, either wholly or partly, from the liability on any terms that the Court thinks fit if it appears to the Court that the officer—
 (a)is or may be liable for the misconduct;
 (b)has acted honestly and reasonably; and
 (c)ought fairly to be excused for the misconduct, having regard to all the circumstances of the case (including those connected with the officer’s appointment).
 Division 8Supervision by Commission
 112ZF.Commission’s power to give directions
 (1)The Commission may, by notice in writing, give any of the directions specified in subsection (2) if it appears to the Commission that—
 (a)with respect to an open-ended fund company, any of the requirements for registration specified in section 112E is no longer met;
 (b)an open-ended fund company or a director, an investment manager, a custodian or a sub-custodian of an open-ended fund company has contravened—
 (i)any of the relevant provisions;
 (ii)any notice or requirement given or made by the Commission under or pursuant to this Ordinance; or
 (iii)any of the conditions imposed in respect of the registration of the company;
 (c)an open-ended fund company or a director, an investment manager, a custodian or a sub-custodian of an open-ended fund company has, in purported compliance with—
 (i)any of the relevant provisions;
 (ii)any notice or requirement given or made by the Commission under or pursuant to this Ordinance; or
 (iii)any of the conditions imposed in respect of the registration of the company,
 knowingly or recklessly provided to the Commission any information that is false or misleading in a material particular;
 (d)an investment manager of an open-ended fund company has contravened any of the terms and conditions of its licence or registration under this Ordinance;
 (e)an investment manager of an open-ended fund company has, in purported compliance with any of the terms and conditions of its licence or registration under this Ordinance, knowingly or recklessly provided to the Commission any information that is false or misleading in a material particular; or
 (f)it is desirable to do so in order to protect the interest of the investing public.
 (2)The directions are—
 (a)a direction to the company or its investment manager that the company is to cease to issue or redeem, or cease to issue and redeem, shares or any class of shares in the company; and
 (b)a direction to a director of the company that the director is to cease to transfer shares or any class of shares in the company to or from, or to and from, the director’s own holding of shares.
 (3)The Commission may, by notice in writing served on the person to whom a direction is given under this section, amend or revoke the direction.
 (4)A direction given under subsection (1), or an amendment or revocation of such a direction under subsection (3), takes effect—
 (a)at the time of the service of the notice in respect of the direction, amendment or revocation; or
 (b)if a later time is specified in the notice, at that time.
 (5)Subject to subsection (6), if the registration of an open-ended fund company is cancelled under section 112ZH or 112ZI while a direction given under this section in relation to the company is in force—
 (a)the direction is not to be affected in any respect by the cancellation; and
 (b)this section continues to apply to the company as if its registration had not been cancelled.
 (6)If an order for the winding up of an open-ended fund company is made by the court under section 212 or the OFC rules, a direction given under this section in relation to the company ceases to have effect on the making of the order.
 112ZG.Application to Court of First Instance in respect of failure to comply with direction
 (1)If a person fails to comply with a direction given under section 112ZF, the Commission may apply to the Court of First Instance in respect of the failure and the Court may—
 (a)if satisfied that there is no reasonable excuse for the person not to comply with the direction, order the person to comply with the direction within the period specified by the Court; and
 (b)if satisfied that the failure was without reasonable excuse, punish the person, and any other person knowingly involved in the failure, in the same manner as if the person and, if applicable, that other person had been guilty of contempt of court.
 (2)If there is a reasonable likelihood that a person will fail to comply with a direction given under section 112ZF, the Commission may apply to the Court of First Instance for an order that—
 (a)the person; and
 (b)any other person whom the Court is satisfied is able to procure the person to comply with the direction,
 take any action or refrain from taking any action that the Court directs.
 (3)An application under this section must be made by originating summons in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 112ZH.Commission’s power to cancel registration on open-ended fund company’s application
 (1)Subject to subsection (2), the Commission must cancel the registration under section 112D of an open-ended fund company on an application made by the company in accordance with the OFC rules.
 (2)The Commission may refuse to cancel the registration of an open-ended fund company if it considers that—
 (a)it is in the public interest that any matter concerning the company should be investigated before its registration is so cancelled; or
 (b)the cancellation would not be in the interest of the investing public.
 (3)On cancelling the registration of an open-ended fund company, the Commission may impose any condition that it considers appropriate.
 (4)The Commission may, by notice in writing served on an open-ended fund company the registration of which is cancelled, amend or revoke any of the conditions imposed, or impose new conditions, in respect of the cancellation.
 (5)The Commission must not exercise a power under subsection (2), (3) or (4) in relation to an open-ended fund company without first giving the company a reasonable opportunity to be heard.
 (6)If the Commission cancels the registration of an open-ended fund company, it must notify the company in writing of the cancellation.
 (7)If the Commission exercises a power under subsection (2), (3) or (4) in relation to an open-ended fund company, it must notify the company in writing of the exercise and the reasons for it.
 (8)If the Commission cancels the registration of an open-ended fund company, it—
 (a)must, as soon as reasonably practicable after cancelling the registration, notify the Registrar of Companies in writing of the cancellation; and
 (b)may publish notice of the cancellation and the reason for the cancellation in any manner that it considers appropriate.
 112ZI.Commission’s power to cancel registration otherwise than on open-ended fund company’s application
 (1)The Commission may cancel the registration under section 112D of an open-ended fund company if—
 (a)it appears to the Commission that, with respect to the company, any of the requirements for registration specified in section 112E is no longer met;
 (b)it appears to the Commission that the company or a director, an investment manager, a custodian or a sub-custodian of the company has contravened—
 (i)any of the relevant provisions;
 (ii)any notice or requirement given or made by the Commission under or pursuant to this Ordinance; or
 (iii)any of the conditions imposed in respect of the registration of the company;
 (c)it appears to the Commission that the company or a director, an investment manager, a custodian or a sub-custodian of the company has, in purported compliance with—
 (i)any of the relevant provisions;
 (ii)any notice or requirement given or made by the Commission under or pursuant to this Ordinance; or
 (iii)any of the conditions imposed in respect of the registration of the company,
 knowingly or recklessly provided to the Commission any information that is false or misleading in a material particular;
 (d)the Commission is not satisfied that the continued registration of the company is in the interest of the investing public; or
 (e)an order for the winding up of the company has been made by the court under the OFC rules.
 (2)On cancelling the registration of an open-ended fund company, the Commission may impose any condition that it considers appropriate.
 (3)The Commission may, by notice in writing served on an open-ended fund company the registration of which is cancelled, amend or revoke any of the conditions imposed, or impose new conditions, in respect of the cancellation.
 (4)The Commission must not exercise a power under subsection (1), (2) or (3) in relation to an open-ended fund company without first giving the company a reasonable opportunity to be heard.
 (5)If the Commission exercises a power under subsection (1), (2) or (3) in relation to an open-ended fund company, it must notify the company in writing of the exercise and the reasons for it.
 (6)If the Commission cancels the registration of an open-ended fund company, it—
 (a)must, as soon as reasonably practicable after cancelling the registration, notify the Registrar of Companies in writing of the cancellation; and
 (b)may publish notice of the cancellation and the reasons for the cancellation in any manner that it considers appropriate.
 112ZJ.Permission to carry on essential business operations on cancellation of registration
 (1)The Commission may, by notice in writing served on an open-ended fund company the registration of which has been cancelled under section 112ZH or 112ZI, permit the company to carry on essential business operations.
 (2)The registration of an open-ended fund company to which permission is given is, while it carries on essential business operations in accordance with the permission, deemed not to be cancelled for the purposes of this Ordinance.
 (3)On giving permission to an open-ended fund company, the Commission may impose any condition that it considers appropriate.
 (4)A condition imposed under subsection (3) must be specified in the notice in respect of the permission.
 (5)A permission given or a condition imposed in respect of it under subsection (3) takes effect—
 (a)at the time of the service of the notice in respect of the permission; or
 (b)if a later time is specified in the notice, at that time.
 (6)The Commission may, by notice in writing served on an open-ended fund company to which permission is given, amend or revoke any of the conditions imposed, or impose new conditions, in respect of the permission.
 (7)An amendment or revocation of a condition, or a new condition imposed, under subsection (6) takes effect—
 (a)at the time of the service of the notice in respect of the amendment or revocation of the condition or the imposition of the new condition; or
 (b)if a later time is specified in the notice, at that time.
 (8)In this section—
 essential business operations (必要的業務運作), in relation to an open-ended fund company, means business operations that are essential for closing down its business.
 Division 8ARe-domiciliation
 (Division 8A added 33 of 2021 s. 7)
 112ZJA.Interpretation of Division 8A of Part IVA
 (1)In this Division—
 application date (申請日期), in relation to a non-Hong Kong fund corporation, means the date on which an application under section 112ZJB(1) is made by the corporation;
 deregister (撤銷註冊), in relation to a non-Hong Kong fund corporation, means to cease to have a registration under the law of its place of incorporation relating to the incorporation or domicile of the corporation in that place;
 intended OFC (籌劃中公司), in relation to a non-Hong Kong fund corporation, means the re-domiciled OFC that the corporation is intended to become on the re-domiciliation date;
 non-Hong Kong fund corporation (非香港基金法團) means a collective investment scheme constituted as a corporation that is incorporated outside Hong Kong as at the application date;
 place of incorporation (成立地), in relation to a non-Hong Kong fund corporation, means—
 (a)the jurisdiction outside Hong Kong in which the corporation is incorporated and under the law of which the corporation is registered as at the application date; or
 (b)if the corporation has, after its incorporation, transferred its domicile to a jurisdiction outside Hong Kong, and is registered under the law of that jurisdiction as at the application date—that jurisdiction;
 re-domiciliation date (遷冊日期) means the date on which the certificate of re-domiciliation is issued.
 (2)In this Division, a reference to registration under the law of a jurisdiction outside Hong Kong includes any permission or authorization (however described) of a similar nature under the law of that jurisdiction.
 112ZJB.Registration with Commission before re-domiciliation
 (1)On an application by a non-Hong Kong fund corporation, the Commission may register the corporation for the purposes of this Part.
 (2)An application for the purposes of subsection (1)—
 (a)must be made in the manner specified by the Commission; and
 (b)must be accompanied by any document or information that the Commission requires.
 (3)The Commission must refuse to register a non-Hong Kong fund corporation under subsection (1) unless it is satisfied that the requirements for registration specified in section 112E will, on the re-domiciliation date, be met in relation to the intended OFC.
 (4)Without limiting any other ground on which the Commission may refuse to register a non-Hong Kong fund corporation under subsection (1), the Commission may refuse to so register the corporation if it is not satisfied that the registration is in the interest of the investing public.
 (5)On registering a non-Hong Kong fund corporation under subsection (1), the Commission may impose any condition that it considers appropriate.
 (6)The Commission must, as soon as reasonably practicable after registering a non-Hong Kong fund corporation under subsection (1), notify the Registrar of Companies in writing of the registration.
 (7)The Commission must, as soon as reasonably practicable after refusing to register a non-Hong Kong fund corporation under subsection (1), notify the corporation in writing of the refusal and the reasons for it.
 (8)A registration under subsection (1) takes effect on the re-domiciliation date.
 (9)Once a registration under subsection (1) has taken effect—
 (a)the registration is taken to be a registration under section 112D(1) that has taken effect; and
 (b)a condition imposed under subsection (5) is taken to be a condition imposed under section 112D(6).
 112ZJC.Issue of certificate of re-domiciliation by Registrar of Companies
 (1)A non-Hong Kong fund corporation may apply for a certificate of re-domiciliation by delivering to the Registrar of Companies for registration—
 (a)a re-domiciliation form prescribed by the OFC rules; and
 (b)a copy of the instrument of incorporation of the intended OFC that has been signed in accordance with the OFC rules.
 (2)The documents specified in subsection (1)—
 (a)must be delivered in the manner prescribed by the OFC rules; and
 (b)must be accompanied by any document or information prescribed by the OFC rules.
 (3)Subject to subsection (4), if the Registrar of Companies is satisfied that the requirements for issuing a certificate of re-domiciliation prescribed by the OFC rules are met in relation to the non-Hong Kong fund corporation, the Registrar—
 (a)must register the documents delivered under subsection (1); and
 (b)must issue a certificate of re-domiciliation to the corporation certifying that it has become an open-ended fund company.
 (4)The Registrar of Companies must not take any action under subsection (3) unless the Registrar has been notified of the registration of the non-Hong Kong fund corporation under section 112ZJB(6).
 112ZJD.Effect of re-domiciliation
 (1)On the re-domiciliation date of a non-Hong Kong fund corporation—
 (a)the corporation becomes, and continues as a body corporate as, a re-domiciled OFC; and
 (b)this Ordinance applies accordingly to the re-domiciled OFC.
 (2)Subsection (1) does not operate to—
 (a)create a new legal entity;
 (b)prejudice or affect the identity or continuity of the non-Hong Kong fund corporation as a corporation registered in its place of incorporation;
 (c)affect any contract made, resolution passed or any other thing done by or in relation to the corporation;
 (d)affect any function, property, right, privilege, obligation or liability acquired, accrued or incurred by or to the corporation; or
 (e)render defective any legal proceedings commenced or continued by or against the corporation.
 (3)To avoid doubt, on and after the re-domiciliation date, any legal proceedings that could have been commenced or continued by or against the non-Hong Kong fund corporation may be commenced or continued by or against the re-domiciled OFC.
 (4)To avoid doubt—
 (a)with effect from the re-domiciliation date, all property of the non-Hong Kong fund corporation is the property of the re-domiciled OFC; and
 (b)for tax purposes, the operation of this section does not amount to—
 (i)a transfer of assets of the corporation; or
 (ii)a change in the beneficial ownership of those assets.
 (5)If the non-Hong Kong fund corporation is registered as a registered non-Hong Kong company under Part 16 of the Companies Ordinance (Cap. 622) immediately before its re-domiciliation date—
 (a)the registration ceases to have effect on the re-domiciliation date; and
 (b)the re-domiciled OFC is not to be regarded as a non-Hong Kong company (as defined by section 2(1) of that Ordinance).
 112ZJE.Deregistration in place of incorporation
 (1)As soon as practicable after the re-domiciliation date of a non-Hong Kong fund corporation, the corporation, which has become a re-domiciled OFC, must take all reasonable steps to procure its deregistration in its place of incorporation.
 (2)Within 60 days after the re-domiciliation date, the non-Hong Kong fund corporation—
 (a)must be deregistered in its place of incorporation; and
 (b)must submit to the Commission a document evidencing the deregistration to the satisfaction of the Commission.
 (3)On an application by the non-Hong Kong fund corporation, the Commission may extend the 60-day period mentioned in subsection (2) subject to any condition that the Commission considers appropriate.
 Division 9Rules made by Commission
 112ZK.Commission’s power to make rules
 (1)The Commission may make rules to provide for—
 (a)the carrying on of collective investments by means of open-ended fund companies; and
 (b)the regulation of open-ended fund companies.
 (2)Rules made under subsection (1) may provide for—
 (a)the requirements for incorporation of proposed companies;
 (ab)the requirements for issuing a certificate of re-domiciliation; (Added 33 of 2021 s. 8)
 (b)the requirements for registration of proposed companies or non-Hong Kong fund corporations with the Commission; (Amended 33 of 2021 s. 8)
 (c)the naming of open-ended fund companies;
 (d)the change of names of open-ended fund companies;
 (e)the capacity, objects, powers, privileges, rights and liabilities of open-ended fund companies;
 (f)the instruments of incorporation of open-ended fund companies, including the form of such instruments;
 (g)the requirements relating to the execution of documents by open-ended fund companies;
 (h)the types of investments that open-ended fund companies may make;
 (i)the management and operation of open-ended fund companies, including their administration and procedure;
 (j)the management of the scheme property of open-ended fund companies;
 (k)the accounting and reporting requirements with which open-ended fund companies must comply;
 (l)the making or issue of statements, certificates or other documents by open-ended fund companies and their officers;
 (m)the keeping of accounts and records by open-ended fund companies, and the inspection of such accounts and records;
 (n)the keeping of a register of shareholders and other registers by open-ended fund companies, and the inspection and rectification of such registers;
 (o)matters relating to the share capital of open-ended fund companies, including valuation, purchase, redemption and transfer of shares, redenomination of share capital and variation of rights attached to shares;
 (p)the requirements relating to segregating the liabilities of sub-funds of an open-ended fund company; and
 (q)the cross investments between sub-funds of an open-ended fund company.
 (3)Rules made under subsection (1) may also provide for—
 (a)the rights, powers and liabilities of a shareholder of an open-ended fund company;
 (b)the rights, powers, duties and liabilities of a director, an investment manager, a custodian, a sub-custodian or an auditor of an open-ended fund company;
 (c)the eligibility of a person to be a director, an investment manager, a custodian, a sub-custodian or an auditor of an open-ended fund company;
 (d)the appointment and removal of a director, an investment manager, a custodian, a sub-custodian or an auditor of an open-ended fund company, including the procedures to be followed when they cease to act;
 (e)the notification of the appointment and removal of a director, an investment manager, a custodian, a sub-custodian or an auditor of an open-ended fund company; and
 (f)the notification of changes in the particulars of a director, an investment manager, a custodian, a sub-custodian or an auditor of an open-ended fund company.
 (4)Rules made under subsection (1) may also provide for—
 (a)the procedures to be followed in relation to the giving, amendment and revocation of directions under section 112ZF;
 (b)the procedures to be followed in relation to the cancellation of the registration of open-ended fund companies under section 112ZH or 112ZI;
 (c)the merger of 2 or more open-ended fund companies and the reorganization of an open-ended fund company into 2 or more open-ended fund companies;
 (d)matters relating to the arrangements and compromises entered into, or proposed to be entered into, by open-ended fund companies, including the Commission’s right to be heard in the related court process and the registration of arrangements and compromises with the Registrar of Companies;
 (e)the winding up and dissolution of open-ended fund companies, including the grounds and procedures for such winding up and dissolution;
 (f)the winding up and dissolution of sub-funds of open-ended fund companies, including the grounds and procedures for such winding up and dissolution;
 (g)the power of the Court of First Instance to make an order to disqualify a person from acting in any capacity in relation to open-ended fund companies or the scheme property of open-ended fund companies, or from acting in any capacity in the promotion or incorporation of proposed companies or in the process for a non-Hong Kong fund corporation to become a re-domiciled OFC; (Amended 33 of 2021 s. 8)
 (h)the liability of a person acting in contravention of section 112X or of an order made by the Court of First Instance under rules made under paragraph (g);
 (i)a court’s functions in relation to any matter concerning open-ended fund companies and sub-funds of open-ended fund companies; and
 (j)any other thing that, under this Part, is required or permitted to be prescribed or provided by rules.
 (5)Rules made under this section may provide that a person is not excused from complying with a requirement to produce a document or information imposed on the person under those rules only on the ground that to do so might tend to incriminate the person.
 (6)Subsections (2), (3), (4) and (5) do not have the effect of limiting subsection (1).
 112ZL.Rules made with consent of Registrar of Companies
 (1)The Commission may, with the consent of the Registrar of Companies, make rules to provide for the functions of the Registrar in relation to open-ended fund companies, including—
 (a)specifying the form of any document required or authorized to be delivered to the Registrar, other than a document the form of which is or may be prescribed by this Ordinance;
 (b)specifying requirements in relation to documents and information required or authorized to be delivered to the Registrar;
 (c)keeping records of documents and information relating to open-ended fund companies;
 (d)keeping a list of the names of open-ended fund companies;
 (e)establishing and maintaining a register of open-ended fund companies;
 (f)making available the OFC register for public inspection;
 (g)issuing copies or certified true copies of documents and information on the OFC register;
 (h)requiring an open-ended fund company to resolve any inconsistency between information contained in a document registered by the Registrar in respect of the company and any other information relating to the company on the OFC register;
 (i)ensuring that the OFC register is accurate and up-to-date;
 (j)annotating the OFC register;
 (k)issuing certificates of change of name; and
 (l)destroying or disposing of documents and information delivered to the Registrar for registration.
 (2)The Commission may also, with the consent of the Registrar of Companies, make rules to provide for—
 (a)the registration by the Registrar of documents delivered by or on behalf of proposed companies, non-Hong Kong fund corporations and open-ended fund companies; (Amended 33 of 2021 s. 9)
 (b)appeals to the Court of First Instance against a decision of the Registrar to refuse registration of a document;
 (c)the information to be contained in the OFC register;
 (d)the withholding of information on the OFC register from public inspection, and the use and disclosure of the withheld information;
 (e)applications to the Court of First Instance for an order to rectify information on, or to remove information from, the OFC register and the Court’s powers in relation to such applications;
 (f)the Registrar taking part in the proceedings for an order mentioned in paragraph (e) before the Court of First Instance;
 (g)the forms of the certificates issued by the Registrar;
 (h)the admissibility in evidence in judicial or other proceedings of documents and information certified to be true by the Registrar;
 (i)the delivery of documents and information required or authorized to be delivered to the Registrar by electronic means;
 (j)the effect of a discrepancy between a document delivered to the Registrar that is in a language other than English and Chinese and the certified translation of the document;
 (k)inquiry by the Registrar into acts that would constitute offences relating to the giving of any misleading, false or deceptive information or statement to the Registrar and the delegation of the Registrar’s powers to inquire into such acts;
 (l)calculation of the daily fine imposed under rules made under this section or section 112ZK or 112ZM that make it an offence for failing to comply with a requirement to deliver a document or information to the Registrar under those rules and that impose a fine for each day during which the offence continues;
 (m)the issue of guidelines by the Registrar and the effect of such guidelines; and
 (n)the protection and immunity of the Registrar, other public officers and other persons.
 (3)Rules made under this section may provide that a person is not excused from complying with a requirement to produce a document or information imposed on the person under those rules only on the ground that to do so might tend to incriminate the person.
 (4)In this section—
 OFC register (《開放式基金型公司登記冊》) means the register of open-ended fund companies maintained by the Registrar of Companies under rules made under this section.
 112ZM.Rules made with consent of Official Receiver
 The Commission may, with the consent of the Official Receiver, make rules to provide for the functions of the Official Receiver in relation to—
 (a)the winding up and dissolution of open-ended fund companies; and
 (b)the winding up and dissolution of sub-funds of open-ended fund companies.
 112ZN.OFC rules may prescribe offences
 (1)The OFC rules may—
 (a)make it an offence for a person to do, or omit to do, any specified act; and
 (b)provide that the offence is punishable by a fine, imprisonment or both.
 (2)The OFC rules may provide for defences to any offence prescribed by those rules.
 (3)For an offence punishable on conviction on indictment, the maximum fine that may be prescribed is $1,000,000 and the maximum imprisonment that may be prescribed is 7 years. In addition, in the case of a continuing offence, a further fine not exceeding level 6 for each day during which the offence continues may be prescribed.
 (4)For an offence punishable on summary conviction, the maximum fine that may be prescribed is $500,000 and the maximum imprisonment that may be prescribed is 2 years. In addition, in the case of a continuing offence, a further fine not exceeding level 3 for each day during which the offence continues may be prescribed.
 112ZO.Modification or waiver of requirements of OFC rules by notice
 (1)The Commission may, on an application by a person specified in subsection (2), grant a modification or waiver in relation to the person in respect of any of the requirements of the OFC rules.
 (2)The person is—
 (a)an open-ended fund company;
 (b)a director of an open-ended fund company;
 (c)an investment manager of an open-ended fund company;
 (d)a custodian of an open-ended fund company;
 (e)a sub-custodian of an open-ended fund company; or
 (f)an auditor of an open-ended fund company.
 (3)An application for the purposes of subsection (1)—
 (a)must be made in the manner prescribed by the OFC rules; and
 (b)must be accompanied by the fee prescribed by regulations made under section 112ZQ for the purposes of this section.
 (4)The Commission may only grant a modification or waiver if it is satisfied that the modification or waiver will not prejudice the interest of the investing public.
 (5)The grant of a modification or waiver in relation to a person is to be effected by a notice in writing served on the person specifying the period (if any) for which the modification or waiver is in force.
 (6)On granting a modification or waiver, the Commission may impose any condition that it considers appropriate.
 (7)The Commission may, by notice in writing served on a person in relation to whom a modification or waiver is granted, amend or revoke the modification or waiver.
 (8)The Commission may, by notice in writing served on a person in relation to whom a modification or waiver is granted, amend or revoke any of the conditions imposed, or impose new conditions, in respect of the modification or waiver.
 (9)A person who contravenes a condition imposed under subsection (6) or (8), or as amended under subsection (8), commits an offence and is liable on conviction to a fine at level 6.
 112ZP.Modification or waiver of requirements of OFC rules by rules
 (1)The Commission may by rules grant a modification or waiver, in relation to a class of open-ended fund companies, or a class of directors, investment managers, custodians, sub-custodians or auditors of open-ended fund companies, in respect of any of the requirements of the OFC rules.
 (2)The Commission may only grant a modification or waiver if it is satisfied that the modification or waiver will not prejudice the interest of the investing public.
 (3)The Commission may specify in the rules the conditions subject to which a modification or waiver is granted.
 (4)The rules may—
 (a)make it an offence for a person to contravene any of the conditions specified in respect of a modification or waiver; and
 (b)provide that the offence is punishable by a fine not exceeding level 6.
 Division 10Miscellaneous
 112ZQ.Financial Secretary may make regulations relating to fees
 (1)Despite section 395, the Financial Secretary may make regulations to provide for—
 (a)the charging or collecting of fees by the Commission—
 (i)in respect of any things done, or services provided, by the Commission in performing the Commission’s functions under this Part or the OFC rules; or
 (ii)in respect of any things done, or services provided, by the Commission in connection with any other matters specified in the OFC rules;
 (b)the charging or collecting of fees by the Registrar of Companies—
 (i)in respect of any things done, or services provided, by the Registrar in performing the Registrar’s functions under this Part or the OFC rules; or
 (ii)in respect of any things done, or services provided, by the Registrar in connection with any other matters specified in the OFC rules; and
 (c)the charging or collecting of fees by the Official Receiver—
 (i)in respect of any things done, or services provided, by the Official Receiver in performing the Official Receiver’s functions under this Part or the OFC rules; or
 (ii)in respect of any things done, or services provided, by the Official Receiver in connection with any other matters specified in the OFC rules.
 (2)The regulations may—
 (a)provide for the amount of the fees to be fixed by or determined under the regulations;
 (b)provide for different fees to be payable in respect of the same matter in different circumstances;
 (c)specify when and how fees are to be paid; and
 (d)provide for the waiver of payment of any fee prescribed by the regulations, either generally or in a particular case.
 (3)The Registrar of Companies—
 (a)may, subject to the approval of the Financial Secretary, determine what fees are chargeable in respect of the things done, or services provided—
 (i)for which fees are not provided for by the regulations; or
 (ii)in circumstances other than those for which fees are provided by the regulations; and
 (b)may charge such fees.
 112ZR.Commission may publish codes and guidelines
 (1)The Commission may publish, in the Gazette and in any other manner it considers appropriate, any code or guideline to provide guidance in respect of any matter relating to—
 (a)the incorporation, registration, management and operation of open-ended fund companies, including their administration and procedure; or
 (b)the business of open-ended fund companies.
 (2)Without limiting subsection (1), a code or guideline published under that subsection may refer to obligations to observe any other codes or guidelines issued, or requirements imposed, otherwise than by the Commission.
 (3)The Commission may amend any code or guideline published under subsection (1).
 (4)Any amendments made to a code or guideline published under subsection (1) must be published in the Gazette and in any other manner the Commission considers appropriate.
 (5)A code or guideline published under subsection (1)—
 (a)may be of general or special application and, in particular, may be made so as to apply, or so as not to apply—
 (i)to a specified extent in relation to a specified person or to members of a specified class of persons; or
 (ii)in specified circumstances; and
 (b)may make different provisions for different circumstances and provide for different cases or classes of cases.
 (6)A code or guideline published under subsection (1) and all amendments made to it are not subsidiary legislation.
 112ZS.Effect of codes and guidelines
 (1)A failure by a person to comply with a provision in a code or guideline does not itself make the person liable to any judicial or other proceedings.
 (2)However, a failure on the part of an intermediary acting as an investment manager of an open-ended fund company, or a representative of such an intermediary, to comply with a provision in a code or guideline may be taken into account in considering, for the purposes of any provision of this Ordinance—
 (a)in the case of an intermediary, whether it is a fit and proper person to be or to remain licensed or registered;
 (b)in the case of a representative of an intermediary that is a licensed corporation, whether he or she is a fit and proper person to be or to remain licensed as a representative; or
 (c)in the case of a representative of an intermediary that is a registered institution, whether he or she is a fit and proper person to be or to remain a person whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged by a registered institution in respect of a regulated activity.
 (3)Despite subsection (1), in any proceedings under this Ordinance before a court—
 (a)a code or guideline is admissible in evidence; and
 (b)if any provision in a code or guideline appears to the court to be relevant to a question arising in the proceedings, the provision is to be taken into account in determining the question.
 (4)In this section—
 code or guideline (守則或指引) means a code or guideline published under section 112ZR.
 112ZT.Offence of fraudulent trading
 (1)If any business of an open-ended fund company is carried on—
 (a)with intent to defraud creditors of the company or creditors of any other person; or
 (b)for any fraudulent purpose,
 every person who is knowingly a party to the carrying on of the business with that intent or for that purpose commits an offence.
 (2)A person who commits an offence under subsection (1) is liable—
 (a)on conviction on indictment to a fine of $10,000,000 and to imprisonment for 10 years; or
 (b)on summary conviction to a fine of $1,000,000 and to imprisonment for 3 years.
 (3)This section applies whether or not the open-ended fund company has been, or is in the course of being, wound up.
 Part V
 Licensing and Registration
 (Format changes—E.R. 2 of 2012)
 113.Interpretation of Part V
 (1)In this Part, unless the context otherwise requires—
 executive director (執行董事), in relation to a licensed corporation, means a director of the corporation who—
 (a)actively participates in; or
 (b)is responsible for directly supervising,
 the business of a regulated activity for which the corporation is licensed;
 prescribed fee (訂明費用) means a fee prescribed by rules made under section 395;
 prescribed manner (訂明方式) means such manner as is prescribed by rules made under section 397;
 principal (主事人), in relation to a licensed representative, means the licensed corporation to which the representative is accredited;
 regulated function (受規管職能), in relation to a regulated activity carried on as a business by any person, means any function performed for or on behalf of or by arrangement with the person relating to the regulated activity, other than work ordinarily performed by an accountant, clerk or cashier;
 specified titles (指明稱銜) means the titles specified in column 3 of Schedule 6.
 (2)In this Part, a reference to a licence to carry on a regulated activity shall be construed—
 (a)in relation to a licensed corporation, as a licence to carry on a business in the regulated activity; and
 (b)in relation to a licensed representative, as a licence to perform for or on behalf of or by arrangement with a licensed corporation to which he is accredited any regulated function in relation to the regulated activity.
 (3)Registration for a regulated activity under section 119 shall be construed as registration for carrying on a business in the regulated activity.
 114.Restriction on carrying on business in regulated activities, etc.
 (1)Subject to subsections (2), (5) and (6), no person shall—
 (a)carry on a business in a regulated activity; or
 (b)hold himself out as carrying on a business in a regulated activity.
 (2)Subsection (1) shall not apply to—
 (a)a corporation licensed under section 116 or 117 for the regulated activity;
 (b)an authorized financial institution registered under section 119 for the regulated activity; or
 (c)a person authorized under section 95(2) for the regulated activity.
 (3)Without prejudice to subsection (1) but subject to subsection (4), no person shall—
 (a)perform any regulated function in relation to a regulated activity carried on as a business; or
 (b)hold himself out as performing such function.
 (4)Subsection (3) shall not apply to—
 (a)a licensed representative who carries on for his principal a regulated activity for which the representative is licensed;
 (b)an individual—
 (i)who carries on for a registered institution a regulated activity for which the registered institution is registered; and
 (ii)whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged by the registered institution in respect of the regulated activity; or
 (c)an employee of a person authorized under section 95(2) for the regulated activity who performs any regulated function in relation to the regulated activity for which the person is so authorized.
 (5)A person shall not be regarded as contravening subsection (1) in relation to Type 8 regulated activity by reason only of carrying on one or more of the activities specified in Part 3 of Schedule 5.
 (6)A person shall not be regarded as contravening subsection (1) in relation to Type 8 regulated activity by reason only of providing financial accommodation if he reasonably believes that the financial accommodation is not to be used to facilitate—
 (a)the acquisition of securities listed on a stock market (whether a recognized stock market or any other stock market outside Hong Kong); or
 (b)the continued holding of such securities.
 (7)For the purposes of subsection (6), where it is proved in any proceedings for a contravention of subsection (1) that the person had obtained, before providing the financial accommodation to a borrower, a written confirmation from the borrower that the financial accommodation was not to be used to facilitate such acquisition or continued holding as referred to in subsection (6)(a) and (b), that person shall be presumed, unless the contrary is proved, to have reasonably believed that the financial accommodation was not to be so used.
 (8)A person who, without reasonable excuse, contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $5,000,000 and to imprisonment for 7 years and, in the case of a continuing offence, to a further fine of $100,000 for every day during which the offence continues; or
 (b)on summary conviction to a fine of $500,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues.
 (9)A person who, without reasonable excuse, contravenes subsection (3) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $20,000 for every day during which the offence continues; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months and, in the case of a continuing offence, to a further fine of $2,000 for every day during which the offence continues.
 115.Application of section 114 in relation to conduct or activities outside Hong Kong
 (1)If—
 (a)a person actively markets, whether by himself or another person on his behalf and whether in Hong Kong or from a place outside Hong Kong, to the public any services that he provides; and
 (b)such services, if provided in Hong Kong, would constitute a regulated activity,
 then—
 (i)the provision of such services so marketed shall be regarded for the purposes of section 114(1)(a) as carrying on a business in that regulated activity;
 (ii)the person’s marketing of such services as referred to in paragraph (a) shall be regarded for the purposes of section 114(1)(b) as holding himself out as carrying on a business in that regulated activity; and
 (iii)to the extent that the provision of such services involves the performance by a person of a function that, if performed in Hong Kong in relation to a regulated activity, would constitute a regulated function, the performance of such function by that person shall be regarded for the purposes of section 114(3)(a) as performance of that regulated function in relation to that regulated activity.
 (2)If—
 (a)a person actively markets, whether by himself or another person on his behalf and whether in Hong Kong or from a place outside Hong Kong, to the public any function that he performs; and
 (b)such function, if performed in Hong Kong in relation to a regulated activity carried on as a business, would constitute a regulated function,
 then—
 (i)the performance of such function so marketed shall be regarded for the purposes of section 114(3)(a) as performance of that regulated function in relation to that regulated activity; and
 (ii)the person’s marketing of such function as referred to in paragraph (a) shall be regarded for the purposes of section 114(3)(b) as holding himself out as performing that regulated function in relation to that regulated activity.
 116.Corporations to be licensed for carrying on regulated activities
 (1)The Commission may, upon application in the prescribed manner and payment of the prescribed fee, grant to the applicant a licence to carry on one or more than one regulated activity. (Amended 19 of 2015 s. 3)
 (1A)The Commission must, on granting a licence under subsection (1), issue to the applicant a printed licence specifying the regulated activity for which the applicant is licensed. (Added 19 of 2015 s. 3)
 (2)The Commission shall refuse to grant a licence to carry on a regulated activity under subsection (1) unless—
 (a)the applicant is—
 (i)a company;
 (ii)a registered non-Hong Kong company as defined by section 2(1) of the Companies Ordinance (Cap. 622); or (Replaced 28 of 2012 ss. 912 & 920)
 (iii)a corporation (other than a company or a non-Hong Kong company)— (Amended 30 of 2004 s. 3)
 (A)which carries on a business principally outside Hong Kong in an activity which, if carried on in Hong Kong, would constitute the regulated activity;
 (B)to which section 114(1) would not apply but for the provisions of section 115(1)(i) and (ii); and
 (C)to which Part 16 of the Companies Ordinance (Cap. 622) would apply if it established a place of business in Hong Kong; (Amended 28 of 2012 ss. 912 & 920)
 (b)applications have been lodged under section 126 in respect of such persons as referred to in section 125(1)(a) and (b) for approval of them as the responsible officers of the applicant in relation to the regulated activity; and
 (c)an application has been lodged under section 130(1) for approval of premises to be used by the applicant for keeping records or documents required under this Ordinance.
 (3)The Commission shall refuse to grant a licence to carry on a regulated activity under subsection (1) unless the applicant satisfies the Commission that—
 (a)it is a fit and proper person to be licensed for the regulated activity;
 (b)it will be able, if licensed, to comply with the financial resources rules; and
 (c)it—
 (i)has lodged and maintains with the Commission such security in accordance with rules made under subsection (4); or
 (ii)is insured in accordance with rules made under subsection (5).
 (4)The Commission may make rules for the purposes of subsection (3)(c)(i) that provide for—
 (a)any security to be lodged and maintained by a licensed corporation with the Commission;
 (b)the manner in which the security is lodged;
 (c)the terms on which the security is maintained;
 (d)the Commission’s power to apply a security lodged and maintained with the Commission in such circumstances, for such purposes and in such manner as may be prescribed in the rules;
 (e)any other matter relating to the security.
 (5)The Commission may make rules for the purposes of subsection (3)(c)(ii) that provide for—
 (a)insurance coverage for specified amounts to be taken out and maintained by a licensed corporation in relation to specified risks;
 (b)the terms on which the insurance is to be taken out and maintained;
 (c)any other matter relating to the insurance.
 (6)A licence granted under subsection (1) shall be subject to such reasonable conditions as the Commission may impose, and the Commission may at any time, by notice in writing served on the licensed corporation concerned, amend or revoke any such condition or impose new conditions as may be reasonable in the circumstances.
 (7)Where the Commission by notice in writing amends or revokes any condition or imposes any new condition under subsection (6), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (8)A licensed corporation shall not, when carrying on a regulated activity for which it is licensed under subsection (1), use a name other than the name specified in the printed licence. (Amended 19 of 2015 s. 3)
 (9)Without prejudice to the Commission’s powers under Divisions 2 and 3 of Part IX, a licence granted to a corporation to carry on Type 7 regulated activity shall be deemed to be revoked in respect of that regulated activity upon the corporation’s being granted an authorization under section 95(2) to provide automated trading services. (Amended 6 of 2014 s. 11)
 117.Grant of temporary licences to corporations for carrying on regulated activities
 (1)The Commission may, upon application by a corporation in the prescribed manner and payment of the prescribed fee, grant to the applicant a licence to carry on, for a period not exceeding 3 months, one or more than one regulated activity (other than Type 3, Type 7, Type 8 and Type 9 regulated activities). (Amended 19 of 2015 s. 4)
 (1A)The Commission must, on granting a licence under subsection (1), issue to the applicant a printed licence specifying the regulated activity for which the applicant is licensed. (Added 19 of 2015 s. 4)
 (2)The Commission shall refuse to grant a licence to carry on a regulated activity under subsection (1) unless the applicant satisfies the Commission that—
 (a)it carries on a business principally outside Hong Kong in an activity which, if carried on in Hong Kong, would constitute the regulated activity;
 (b)it seeks to be licensed for the regulated activity solely for carrying on in Hong Kong such business in the activity;
 (c)it carries on such business in the activity in the place referred to in paragraph (a) under an authorization (however described) by an authority or regulatory organization in that place which—
 (i)in the Commission’s opinion, performs a function similar to the functions of the Commission under this Part;
 (ii)confirms to the satisfaction of the Commission that the applicant has been so authorized; and
 (iii)the Commission is satisfied is empowered under the law of that place to investigate, and, where applicable, to take disciplinary action for, the conduct of the applicant in Hong Kong;
 (d)the granting of the licence would not result in its being granted licences under subsection (1) for respective licence periods that in total exceed 6 months in any period of 24 months;
 (e)it is a fit and proper person to be so licensed for the regulated activity;
 (f)it has nominated at least one individual for approval by the Commission for the purposes of subsection (5)(a); and
 (g)an application has been lodged under section 130(1) for approval of premises to be used by the applicant for keeping records or documents required under this Ordinance.
 (3)A licence granted under subsection (1) shall be subject to such reasonable conditions as the Commission may impose, and the Commission may at any time, by notice in writing served on the licensed corporation concerned, amend or revoke any such condition or impose new conditions as may be reasonable in the circumstances.
 (4)Where the Commission by notice in writing amends or revokes any condition or imposes any new condition under subsection (3), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (5)Without limiting the generality of subsection (3), it shall be a condition of a licence granted under subsection (1) for carrying on a regulated activity—
 (a)that, in relation to the regulated activity, there is at least one individual who is—
 (i)nominated by the licensed corporation and approved by the Commission for the purposes of this paragraph; and
 (ii)available at all times to supervise the business of the regulated activity for which the corporation is licensed; and
 (b)that the licensed corporation shall not hold any client assets in carrying on the regulated activity.
 (6)A licensed corporation shall not, when carrying on a regulated activity for which it is licensed under subsection (1), use a name other than the name specified in the printed licence. (Amended 19 of 2015 s. 4)
 118.Licensing conditions in certain cases
 (1)Without limiting the generality of section 116(6), it shall be a condition of a licence granted under section 116(1) for carrying on—
 (a)a regulated activity—
 (i)that the licensed corporation—
 (A)shall lodge (whether or not in addition to any security that it may have lodged) and maintain with the Commission such security in respect of that regulated activity as may be required by rules made under section 116(4); or
 (B)is insured, in lieu of lodging (where applicable) and maintaining such security, in accordance with rules made under section 116(5); and
 (ii)that, in relation to the regulated activity, there is at least one responsible officer of the licensed corporation who is available at all times to supervise the business of the regulated activity for which the corporation is licensed;
 (b)Type 3 regulated activity, that in relation to any dispute between the licensed corporation and a client regarding or touching upon any matter concerning the carrying on of that regulated activity, the licensed corporation is obliged, if the client so requires, to have the dispute settled by arbitration in accordance with rules made under subsection (2);
 (c)Type 7 regulated activity, that if the Commission in its absolute discretion requires by notice in writing, the licensed corporation shall apply, within such reasonable period as may be specified in the notice, for an authorization under section 95(2) for that regulated activity, and the regulated activity shall be operated in such manner as may be specified in the notice pending the revocation of the licence under section 195(2);
 (d)Type 8 regulated activity, that—
 (i)the licensed corporation shall carry on no business other than securities margin financing, except business that is necessarily incidental to the carrying on of such business; and
 (ii)where the licensed corporation carries on a business in one or more of the activities specified in Part 3 of Schedule 5, it shall comply with the requirements of such rules made under Part VI as apply to it in relation to such business.
 (2)The Commission may make rules for the purposes of subsection (1)(b) that provide for—
 (a)the establishment and functions of an arbitration panel and relevant matters;
 (b)the appointment by the Financial Secretary of members of the arbitration panel, including a chairman and one or more than one deputy chairman;
 (c)the appointment from the arbitration panel of a tribunal to hear a dispute between a licensed corporation and its client and the constitution and composition of the tribunal;
 (d)the liability or entitlement to costs of a party to a dispute and the recovery of costs;
 (e)the practice and procedure in the hearing of a dispute;
 (f)the Commission to use the findings of a tribunal for performing its functions under any of the relevant provisions;
 (g)the exercise of any discretion by a person under the rules.
 119.Registered institutions
 (1)The Commission may, upon application by an authorized financial institution in the prescribed manner and payment of the prescribed fee, register the applicant for one or more than one regulated activity (other than Type 3 and Type 8 regulated activities) and shall, upon such registration, grant to the applicant a certificate of registration specifying the regulated activity for which it is registered.
 (2)The Commission shall refer to the Monetary Authority any application made to it under subsection (1).
 (3)Upon receiving an application for registration for a regulated activity referred to him under subsection (2), the Monetary Authority shall—
 (a)consider the application;
 (b)consult the Commission upon the merits of the application; and
 (c)advise the Commission whether he is satisfied by the applicant that the applicant is a fit and proper person to be registered for that regulated activity.
 (4)In deciding whether to register or refuse to register an applicant under subsection (1), the Commission—
 (a)shall have regard to any advice given to it by the Monetary Authority pursuant to subsection (3)(c); and
 (b)may rely wholly or partly on that advice in making that decision.
 (5)Any registration under subsection (1) shall be subject to such reasonable conditions as the Commission may impose, and the Commission may at any time, by notice in writing served on the registered institution concerned, amend or revoke any such condition or impose new conditions as may be reasonable in the circumstances.
 (6)Where the Commission by notice in writing amends or revokes any condition or imposes any new condition under subsection (5), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (7)Without prejudice to the Commission’s powers under Divisions 2 and 3 of Part IX, the registration of an authorized financial institution for Type 7 regulated activity shall be deemed to be revoked in respect of that regulated activity upon the institution’s being granted an authorization under section 95(2) to provide automated trading services. (Amended 6 of 2014 s. 12)
 (8)Without limiting the generality of subsection (5), it shall be a condition of any registration under subsection (1) for—
 (a)a regulated activity, that—
 (i)in relation to the regulated activity, there is at least one executive officer of the registered institution who is available at all times to supervise the business of the regulated activity for which the institution is registered; and
 (ii)any individual whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged by the registered institution in respect of the regulated activity is a fit and proper person to be so engaged;
 (b)Type 7 regulated activity, that if the Commission in its absolute discretion requires by notice in writing, the registered institution shall apply, within such reasonable period as may be specified in the notice, for an authorization under section 95(2) for that regulated activity, and the regulated activity shall be operated in such manner as may be specified in the notice pending the revocation of the registration under section 197(2).
 (9)The Commission shall not exercise its power under subsection (5) or (8)(b) unless the Commission has first consulted the Monetary Authority.
 120.Representatives to be licensed
 (1)The Commission may, upon application by an individual in the prescribed manner and payment of the prescribed fee, grant to the applicant a licence to carry on one or more than one regulated activity for a corporation licensed under section 116 to which he is accredited. (Amended 19 of 2015 s. 5)
 (2)The Commission in its absolute discretion may, upon request by the applicant in the prescribed manner and payment of the prescribed fee, grant to the applicant a provisional licence to carry on, for such corporation, the regulated activity in respect of which the application is made.
 (2A)On granting a licence under subsection (1) or (2), the Commission must, by notice in writing served on the applicant, inform the applicant of—
 (a)the grant of the licence; and
 (b)the regulated activity for which the applicant is licensed. (Added 19 of 2015 s. 5)
 (2B)Beginning on the day on which Part 2 of the Securities and Futures (Amendment) Ordinance 2015 (19 of 2015) comes into operation#—
 (a)no printed licence is to be issued on granting a licence under subsection (1) or (2); and
 (b)a printed licence issued by the Commission to a licensed representative before that day ceases to be effective for indicating that an individual is licensed under subsection (1) or (2). (Added 19 of 2015 s. 5)
 (3)The Commission shall refuse to grant a licence to carry on a regulated activity under subsection (1) or (2) unless the applicant satisfies the Commission that he is a fit and proper person to be so licensed for the regulated activity.
 (4)The Commission shall refuse to grant a licence under subsection (2) unless the applicant satisfies the Commission that the grant of the licence will not prejudice the interest of the investing public.
 (5)A licence granted under subsection (1) or (2) shall be subject to the condition specified in subsection (6) and to any other reasonable conditions as the Commission may impose.
 (6)It shall be a condition of a licence granted under subsection (1) or (2) that the licensed representative concerned shall—
 (a)at all times keep the Commission informed of particulars of his contact details including, in so far as applicable, his residential address, telephone and facsimile numbers and electronic mail address; and
 (b)inform the Commission of any change in the particulars within 14 days after the change takes place.
 (7)The Commission may at any time, by notice in writing served on the licensed representative concerned, amend or revoke any condition imposed under subsection (5) or impose new conditions as may be reasonable in the circumstances.
 (8)Where the Commission by notice in writing amends or revokes any condition or imposes any new condition under subsection (7), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (9)A provisional licence shall be deemed to be revoked—
 (a)upon the Commission’s refusal of the relevant application made under subsection (1); or
 (b)upon the grant of the licence sought under the application,
 whichever first occurs.
 (10)Without prejudice to the Commission’s powers under Divisions 2 and 3 of Part IX, the Commission may, after having regard to the interest of the investing public and in its absolute discretion, by notice in writing served on the licensed representative concerned, revoke a provisional licence granted under subsection (2). (Amended 6 of 2014 s. 13)
 (11)-(12)(Repealed 19 of 2015 s. 5)
 (13)A licensed representative shall not, when carrying on the regulated activity for which the representative is licensed under subsection (1) or (2), use a name other than the name under which the representative is licensed. (Amended 19 of 2015 s. 5)
 Editorial Note:
 # Commencement date: 13 November 2015.
 121.Temporary licences for representatives
 (1)The Commission may, upon application by an individual in the prescribed manner and payment of the prescribed fee, grant to the applicant a licence to carry on, for a period not exceeding 3 months, one or more than one regulated activity (other than Type 3, Type 7, Type 8 and Type 9 regulated activities)— (Amended 19 of 2015 s. 6)
 (a)for a corporation licensed under section 116 to which he is accredited; or
 (b)for a corporation licensed under section 117 to which he is accredited.
 (1A)On granting a licence under subsection (1), the Commission must, by notice in writing served on the applicant, inform the applicant of—
 (a)the grant of the licence; and
 (b)the regulated activity for which the applicant is licensed. (Added 19 of 2015 s. 6)
 (1B)Beginning on the day on which Part 2 of the Securities and Futures (Amendment) Ordinance 2015 (19 of 2015) comes into operation#—
 (a)no printed licence is to be issued on granting a licence under subsection (1); and
 (b)a printed licence issued by the Commission to a licensed representative before that day ceases to be effective for indicating that an individual is licensed under subsection (1). (Added 19 of 2015 s. 6)
 (2)The Commission shall refuse to grant a licence to carry on a regulated activity under subsection (1) unless the applicant satisfies the Commission—
 (a)that he carries on in a place outside Hong Kong an activity which, if carried on in Hong Kong, would constitute carrying on the regulated activity, under an authorization (however described) by an authority or regulatory organization in that place which—
 (i)in the Commission’s opinion, performs a function similar to the functions of the Commission under this Part;
 (ii)confirms to the satisfaction of the Commission that the applicant has been so authorized; and
 (iii)the Commission is satisfied is empowered under the law of that place to investigate, and, where applicable, to take disciplinary action for, the conduct of the applicant in Hong Kong;
 (b)where the application is for a licence under subsection (1)(a), that—
 (i)he carries on the activity referred to in paragraph (a) for or on behalf of a corporation which carries on the activity as a business principally in a place outside Hong Kong under an authorization (however described) by an authority or regulatory organization in that place which—
 (A)in the Commission’s opinion, performs a function similar to the functions of the Commission under this Part; and
 (B)confirms to the satisfaction of the Commission that the corporation has been so authorized; and
 (ii)the licensed corporation to which he seeks to be accredited is a member of the same group of companies as the corporation referred to in subparagraph (i);
 (c)where the application is for a licence under subsection (1)(b), that he seeks to be so licensed solely for the conduct of his principal’s business in the activity referred to in section 117(2)(a);
 (d)that the granting of the licence would not result in his being granted licences under subsection (1) for respective licence periods that in total exceed 6 months in any period of 24 months; and
 (e)that he is a fit and proper person to be so licensed for the regulated activity.
 (3)A licence granted under subsection (1) shall be subject to the condition specified in subsection (4) and to any other reasonable conditions as the Commission may impose.
 (4)It shall be a condition of a licence granted under subsection (1) that the licensed representative concerned—
 (a)shall at all times keep the Commission informed of particulars of his contact details including, in so far as applicable, his residential address, telephone and facsimile numbers and electronic mail address;
 (b)shall inform the Commission of any change in the particulars within 14 days after the change takes place; and
 (c)shall not hold any client assets in carrying on the regulated activity for which he is so licensed.
 (5)The Commission may at any time, by notice in writing served on the licensed representative concerned, amend or revoke any condition imposed under subsection (3) or impose new conditions as may be reasonable in the circumstances.
 (6)Where the Commission by notice in writing amends or revokes any condition or imposes any new condition under subsection (5), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (7)A licensed representative shall not, when carrying on the regulated activity for which the representative is licensed under subsection (1), use a name other than the name under which the representative is licensed. (Amended 19 of 2015 s. 6)
 Editorial Note:
 # Commencement date: 13 November 2015.
 122.Approval and transfer of accreditation
 (1)The Commission may, upon application in the prescribed manner and payment of the prescribed fee, approve the accreditation of a licensed representative—
 (a)who is licensed under section 120(1) or (2) or 121(1)(a), to a corporation licensed under section 116; or
 (b)who is licensed under section 121(1)(b), to a corporation licensed under section 117,
 and on the Commission’s approving the accreditation, the corporation becomes the representative’s principal. (Amended 19 of 2015 s. 7)
 (2)The Commission may, upon application in the prescribed manner and payment of the prescribed fee by a licensed representative licensed under section 120(1) or (2) or 121(1), approve the transfer of his accreditation to another corporation licensed under section 116 or 117 (as the case may be), and on the Commission’s approving the transfer, the corporation becomes the representative’s principal. (Amended 19 of 2015 s. 7)
 (2A)On granting an approval under subsection (1) or (2), the Commission must, by notice in writing served on the applicant, inform the applicant of the approval. (Added 19 of 2015 s. 7)
 (3)The Commission shall refuse to—
 (a)approve an accreditation under subsection (1); or
 (b)approve a transfer of accreditation under subsection (2),
 unless the applicant satisfies the Commission that he will be competent to carry out his duties to the requisite standard as a licensed representative for or on behalf of the licensed corporation concerned.
 (4)Without limiting the generality of subsection (3), where a licensed representative who is licensed under section 121(1)(a) applies—
 (a)under subsection (1)(a) for approval of an accreditation; or
 (b)under subsection (2) for approval of a transfer of accreditation,
 to a corporation licensed under section 116, the Commission shall refuse to grant the approval unless the applicant satisfies the Commission that the licensed corporation to which he seeks to be accredited is a member of the same group of companies as the corporation referred to in section 121(2)(b)(i).
 123.Commission to be notified, etc. if licensed representative ceases to act for principal
 (1)If an individual licensed under section 120(1) or (2) or 121(1) ceases to act for or on behalf of his principal as a licensed representative, he thereupon ceases to be accredited to the principal and—
 (a)the principal shall, within 7 business days after such cessation, notify the Commission of the cessation; and (Amended 19 of 2015 s. 8)
 (b)(Repealed 19 of 2015 s. 8)
 (c)where the individual has not applied for transfer of his accreditation to another corporation licensed under section 116 or 117 (as the case may be) within 180 days after such cessation, the licence shall be deemed to have been revoked upon such cessation.
 (2)A person who contravenes subsection (1)(a) commits an offence and is liable on conviction to a fine at level 6.
 (3)(Repealed 19 of 2015 s. 8)
 124.Duplicate printed licence, etc.
 (Amended 19 of 2015 s. 9)
 (1)Subject to subsection (2), the Commission may, upon application in the prescribed manner and payment of the prescribed fee by a licensed corporation or a registered institution on the ground that its printed licence or certificate of registration is lost, defaced or destroyed, issue to the licensed corporation or the registered institution a duplicate of the printed licence or certificate of registration (as the case may be).
 (2)In support of an application under subsection (1), the licensed corporation or the registered institution shall— (Amended 19 of 2015 s. 9)
 (a)submit to the Commission a statutory declaration made by the licensed corporation or the registered institution stating the ground of the application and such other particulars as the case may require in order to verify the loss, defacement or destruction (as the case may be) of the printed licence or certificate of registration; and
 (b)furnish to the Commission such other information as the Commission may reasonably require in relation to the application.
 (Amended 19 of 2015 s. 9)
 125.Requirement for executive officers
 (1)A corporation licensed under section 116 shall not carry on any regulated activity for which it is licensed unless—
 (a)every executive director of the licensed corporation who is an individual is approved by the Commission as a responsible officer of the corporation in relation to the regulated activity; and
 (b)not less than 2 individuals, at least one of whom shall be an executive director of the licensed corporation, are approved by the Commission as the responsible officers of the corporation in relation to the regulated activity.
 (2)A registered institution shall not carry on any regulated activity for which it is registered unless it has complied with section 71D of the Banking Ordinance (Cap. 155) in respect of the appointment of executive officers and such executive officers are in compliance with section 71C of that Ordinance (including section 71C of that Ordinance as read with section 71E of that Ordinance).
 (3)If a licensed corporation contravenes subsection (1) or a registered institution contravenes subsection (2), without reasonable excuse, the licensed corporation or registered institution (as the case may be) commits an offence and is liable on conviction to a fine at level 6 and, in the case of a continuing offence, to a further fine of $2,000 for every day during which the offence continues.
 126.Approval of responsible officers
 (1)The Commission may, upon application by a licensed representative in the prescribed manner and payment of the prescribed fee, approve the applicant as a responsible officer of the licensed corporation to which he is accredited.
 (2)The Commission shall refuse to approve an applicant as a responsible officer of a licensed corporation under subsection (1) unless the applicant satisfies the Commission that—
 (a)he is a fit and proper person to be so approved; and
 (b)he has sufficient authority within the licensed corporation.
 (3)An approval under subsection (1) shall be subject to such reasonable conditions as the Commission may impose on the licensed corporation and the responsible officer concerned, and the Commission may at any time, by notice in writing served on the licensed corporation or the responsible officer concerned, amend or revoke any such condition or impose new conditions as may be reasonable in the circumstances.
 (4)The approval of an individual as a responsible officer of a licensed corporation shall be deemed to be revoked if the individual—
 (a)ceases to act as a licensed representative for or on behalf of; or
 (b)ceases to be accredited to,
 the licensed corporation.
 127.Variation of regulated activity for which licensed person or registered institution is licensed or registered
 (Amended 19 of 2015 s. 10)
 (1)The Commission may, upon application in the prescribed manner and payment of the prescribed fee, vary the regulated activity for which a licensed person or registered institution is licensed or registered by adding to or reducing the regulated activity. (Amended 19 of 2015 s. 10)
 (2)If a person applies for variation under subsection (1) by adding a regulated activity, the application is, for the purposes of this Part, to be regarded as an application for a licence or registration (as the case may be) in relation to that regulated activity. (Replaced 19 of 2015 s. 10)
 128.Applicant to provide information
 (1)A person who applies—
 (a)for a licence under section 116, 117, 120 or 121;
 (b)for registration under section 119;
 (c)for approval of accreditation or approval of transfer of accreditation to a principal, under section 122;
 (d)for approval to be a responsible officer under section 126;
 (e)for variation, under section 127, of the regulated activity for which the person is licensed or registered;
 (f)for approval of premises under section 130(1);
 (g)for approval to become or continue to be (as the case may be) a substantial shareholder under section 132;
 (h)for a modification or waiver under section 134; or
 (i)for any other matter requiring the approval of the Commission under this Part,
 shall provide the Commission with such information as it may reasonably require to enable it to consider the application.
 (2)In considering an application referred to in subsection (1), the Commission may have regard to any information in its possession whether provided by the applicant or not.
 (3)The Commission may make rules providing for—
 (a)the information to be provided by an applicant to enable the Commission to consider his application;
 (b)the form, manner and time period in which such information is to be provided;
 (c)any other matter relating thereto.
 129.Determination of fit and proper
 (1)In considering whether a person is a fit and proper person for the purposes of any provision of this Part, the Commission or the Monetary Authority (as the case may be) shall, in addition to any other matter that the Commission or the Monetary Authority (as the case may be) may consider relevant, but subject to section 134, have regard to—
 (a)the financial status or solvency;
 (b)the educational or other qualifications or experience having regard to the nature of the functions which, if the application is allowed, the person will perform;
 (c)the ability to carry on the regulated activity competently, honestly and fairly; and
 (d)the reputation, character, reliability and financial integrity,
 of—
 (i)where the person is an individual, the person himself;
 (ii)where the person is a corporation (other than an authorized financial institution), the corporation and any officer of the corporation; or
 (iii)where the person is an authorized financial institution, the institution and any director, chief executive, manager (as defined in section 2(1) of the Banking Ordinance (Cap. 155)) and executive officer of the institution.
 (2)Without limiting the generality of subsection (1), the Commission or the Monetary Authority (as the case may be) may, in considering whether a person is a fit and proper person for the purposes of any provision of this Ordinance—
 (a)take into account a decision made in respect of the person by—
 (i)(in the case of the Commission) the Monetary Authority or (in the case of the Monetary Authority) the Commission;
 (ii)the Insurance Authority;
 (iii)the Mandatory Provident Fund Schemes Authority; or
 (iv)any other authority or regulatory organization, whether in Hong Kong or elsewhere, which, in the Commission’s opinion, performs a function similar to the functions of the Commission;
 (b)take into account any information in the possession of the Commission or the Monetary Authority (as the case may be), whether provided by the person or not, relating to—
 (i)where such consideration relates to a licence under section 116 or 117 or an application for the licence, any other person who is or is to be employed by, or associated with, the person for the purposes of the regulated activity for which the licence is granted or the application is made (as the case may be);
 (ii)where such consideration relates to a licence under section 116 or 117 to carry on a regulated activity or any registration for a regulated activity under section 119 or an application for the licence or registration, any other person who will be acting for or on behalf of the person in relation to the regulated activity; or
 (iii)where the person is a corporation in a group of companies—
 (A)any other corporation in the same group of companies; or
 (B)any substantial shareholder or officer of the corporation or any corporation referred to in sub-subparagraph (A);
 (c)take into account, where such consideration relates to a licence under section 116 or 117 or any registration under section 119 or an application for the licence or registration, whether the person has established effective internal control procedures and risk management systems to ensure his compliance with all applicable regulatory requirements under any of the relevant provisions, having regard in particular to the information provided in accordance with section 128; and
 (d)have regard to the state of affairs of any other business which the person carries on or proposes to carry on.
 130.Suitability of premises for keeping records or documents
 (1)The Commission may, upon application in the prescribed manner and payment of the prescribed fee, approve premises to be used by a licensed corporation for keeping records or documents required under this Ordinance or the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). (Amended 15 of 2011 s. 88; 4 of 2018 s. 43)
 (2)The Commission shall refuse to approve premises under subsection (1) unless the applicant satisfies the Commission that—
 (a)the premises are suitable for being used for the purpose referred to in that subsection; and
 (b)where the premises are used partly for residential purposes, such residential use of the premises will not affect the exercise of any powers under this Part or Part VI or VIII.
 (3)A licensed corporation shall not, without the prior approval in writing of the Commission, use any premises for the keeping of records or documents relating to the carrying on of the regulated activity for which it is licensed.
 (4)The Commission shall inform the applicant in writing of its decision under subsection (1) as soon as reasonably practicable after receipt of the application.
 131.Restriction on substantial shareholding, etc.
 (1)A person shall not become and continue to be a substantial shareholder of a corporation licensed under section 116 without first being approved by the Commission under section 132(1)(a).
 (2)A person who contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years, and to a further fine of $5,000 for every day during which the person continues to be such substantial shareholder without the Commission’s approval under section 132(1)(b); or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months, and to a further fine of $500 for every day during which the person continues to be such substantial shareholder without the Commission’s approval under section 132(1)(b).
 (3)It is a defence for a person charged with an offence under subsection (2) to prove—
 (a)that he did not know, and could not have by the exercise of reasonable diligence ascertained, the existence of the act or circumstances by virtue of which he became such a substantial shareholder; and
 (b)where he subsequently became aware of such act or circumstances, that he applied under section 132(1)(b), as soon as reasonably practicable and in any event within 3 business days after he became so aware, for approval to continue to be a substantial shareholder of the corporation.
 (4)If a person becomes a substantial shareholder of a corporation licensed under section 116 without the Commission’s prior approval under section 132(1)(a) by virtue of—
 (a)a transfer of shares;
 (b)an issue of shares; or
 (c)a transfer of the right to be issued with shares,
 then, unless and until the Commission approves the person to continue to be a substantial shareholder of the corporation under section 132(1)(b), the voting rights conferred by the shares concerned are not exercisable.
 (5)A person who purportedly exercises any voting right that is not exercisable by virtue of subsection (4) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (6)It is a defence for a person charged with an offence under subsection (5) to prove that he—
 (a)did not know; and
 (b)could not have by the exercise of reasonable diligence known,
 that the voting right which he purportedly exercised is by virtue of subsection (4) not exercisable.
 132.Approval to become or continue to be substantial shareholder
 (1)The Commission may, upon application in the prescribed manner and payment of the prescribed fee, approve the applicant—
 (a)to become; or
 (b)to continue to be,
 as the case may be, a substantial shareholder of a corporation licensed under section 116.
 (2)The Commission shall refuse to approve an applicant to become or continue to be (as the case may be) a substantial shareholder of the licensed corporation concerned unless the applicant satisfies the Commission that the corporation will remain a fit and proper person to be licensed if the application is approved.
 (3)An approval under subsection (1)(a) or (b) shall be subject to such reasonable conditions as the Commission may impose on the applicant and on the licensed corporation concerned, and the Commission may at any time, by notice in writing served on the approved substantial shareholder and the corporation, amend or revoke any such condition or impose new conditions as may be reasonable in the circumstances.
 (4)Where the Commission by notice in writing amends or revokes any condition or imposes any new condition under subsection (3), the amendment, revocation or imposition takes effect at the time of the service of the notice or at the time specified in the notice, whichever is the later.
 (5)Without limiting the generality of subsection (3), it shall be a condition of an approval under subsection (1)(a) or (b) that the approved substantial shareholder shall—
 (a)at all times keep the Commission informed of particulars of his contact details including, in so far as applicable, his business address, residential address, telephone and facsimile numbers and electronic mail address; and
 (b)inform the Commission of any change in the particulars within 14 days after the change takes place.
 133.Commission’s power to give directions
 (1)Where a person became a substantial shareholder without the Commission’s prior approval under section 132(1)(a), whether or not he has applied under section 132(1)(b) for approval to continue to be such shareholder and regardless of whether such approval is granted or not, the Commission may by notice in writing direct the licensed corporation concerned—
 (a)not to permit or acquiesce in the involvement of the person in the management of the business of the corporation;
 (b)to deem void and of no effect any votes cast by the person and any of his associates (if any) at any meeting of the corporation;
 (c)to reconvene any such meeting for voting anew on the business on which the votes were cast; and
 (d)to take such other reasonable steps as it may specify in the notice.
 (2)Without prejudice to the operation of subsection (1), where the Commission refuses to approve an application to continue to be a substantial shareholder made under section 132(1)(b), it may by notice in writing direct the applicant—
 (a)to reduce, within such reasonable time as the Commission may require, the interest in shares by virtue of which he became a substantial shareholder of the licensed corporation concerned to the extent that he is no longer a substantial shareholder of the corporation; and
 (b)to take such other reasonable steps as the Commission may specify in the notice.
 (3)If a person fails to comply with any direction under subsection (1) or (2), the Commission may, by originating summons or originating motion, make an application to the Court of First Instance in respect of the failure, and the Court may inquire into the case and—
 (a)if the Court is satisfied that there is no reasonable excuse for the person not to comply with the direction, order the person to comply with the direction within the period specified by the Court; and
 (b)if the Court is satisfied that the failure was without reasonable excuse, punish the person, and any other person knowingly involved in the failure, in the same manner as if he and, where applicable, that other person had been guilty of contempt of court.
 (4)An originating summons under subsection (3) shall be in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 (Amended E.R. 2 of 2012)
 134.Modification or waiver of requirements
 (1)The Commission may, upon application in the prescribed manner and payment of the prescribed fee by—
 (a)a licensed corporation;
 (b)an applicant for a licence under section 116 or 117;
 (c)a registered institution;
 (d)an applicant for registration under section 119;
 (e)a licensed representative;
 (f)an applicant for a licence under section 120 or 121;
 (g)a responsible officer approved under section 126;
 (h)a substantial shareholder approved under section 132;
 (i)an applicant for approval under section 132 to become or continue to be (as the case may be) a substantial shareholder; or
 (j)an associated entity,
 grant a modification or waiver, in relation to the applicant, in respect of any condition specified in section 118 or imposed under section 116, 117, 119, 120, 121, 126 or 132 or any of the requirements of the following—
 (i)sections 116(2)(b) and 125(1) and (2);
 (ii)sections 116(2)(c) and 130;
 (iii)rules made under section 118(2);
 (iv)section 121(2)(a);
 (v)section 129;
 (vi)rules made under section 145;
 (vii)rules made under section 148;
 (viii)rules made under section 149;
 (ix)rules made under section 151;
 (x)rules made under section 152;
 (xi)rules made under section 168;
 (xii)rules made under section 173;
 (xiii)section 175(1), (2) and (3); or
 (xiv)any provision of rules made by the Commission under this Ordinance.
 (2)The grant of a modification or waiver under subsection (1) shall be effected by a notice in writing served on the applicant specifying the period (if any) for which the modification or waiver is valid.
 (3)The Commission shall refuse to grant a modification or waiver under subsection (1) unless it is satisfied by the applicant that to do so will not prejudice—
 (a)in the case of a modification or waiver granted in respect of a condition imposed under section 116, 117 or 119, the interests of any client of the applicant; or
 (b)in the case of a modification or waiver granted in respect of a condition specified in section 118 or imposed under section 120, 121, 126 or 132, or in respect of any requirement of a provision specified in subsection (1)(i) to (xiv), the interest of the investing public.
 (4)A modification or waiver granted under subsection (1) to a person shall be subject to such reasonable conditions as the Commission may impose, and the Commission may at any time, by notice in writing served on—
 (a)the person;
 (b)where the person is an intermediary or an associated entity, an executive officer of the intermediary or the entity; or
 (c)where the modification or waiver is granted pursuant to an application made under subsection (1)(e), (f) or (g), the principal to which the person is accredited,
 amend such modification or waiver, or amend or revoke any such condition or impose new conditions as may be reasonable in the circumstances.
 (5)Subject to subsection (4), a modification or waiver granted under subsection (1) remains in force—
 (a)if a period is specified in the notice served under subsection (2) in respect of the modification or waiver, until the end of the period; or
 (b)if no such period is specified, until revoked by the Commission by notice in writing served on—
 (i)the person;
 (ii)where the person is an intermediary or an associated entity, an executive officer of the intermediary or the entity; or
 (iii)where the modification or waiver is granted pursuant to an application made under subsection (1)(e), (f) or (g), the principal to which the person is accredited.
 (6)In relation to a modification or waiver under subsection (1) to a person, the Commission shall—
 (a)on the grant of the modification or waiver;
 (b)on its amendment or an amendment or revocation of its conditions or the imposition of any new condition on it under subsection (4); or
 (c)on its revocation under subsection (5)(b),
 subject to subsection (7), publish, by the use of the Internet, notice of—  (Amended 9 of 2012 s. 39)
 (i)the name of the person;
 (ii)the event referred to in paragraph (a), (b) or (c) (as the case may be) and the reasons for the event;
 (iii)any condition imposed on the modification or waiver on its grant, or the condition amended or revoked or newly imposed subsequently under subsection (4) (as the case may be); and
 (iv)(if applicable) the period for which the grant or amendment or the condition so imposed is valid.
 (7)If the applicant satisfies the Commission that publishing notice of any condition in compliance with subsection (6)(iii) would prejudice, to an unreasonable degree, the commercial interests of the applicant, the Commission may, in lieu of publishing notice of the condition, include in the notice referred to in subsection (6)—  (Amended 9 of 2012 s. 39)
 (a)a brief account of its reasons for not publishing notice of the condition; and (Amended 9 of 2012 s. 39)
 (b)such appropriate information on the condition as the Commission considers incapable of prejudicing, to an unreasonable degree, the commercial interests of the applicant.
 (8)The Commission may by rules grant a modification or waiver, in relation to a class of licensed persons or registered institutions or associated entities, in respect of any of the requirements of the rules referred to in subsection (1)(vi), (vii), (viii), (ix), (x) or (xi).
 (9)The Commission shall not make any rules under subsection (8) to grant a modification or waiver referred to in that subsection unless the Commission is satisfied that to do so will not prejudice the interest of the investing public.
 (10)The Commission may specify in the rules referred to in subsection (8) the conditions subject to which the modification or waiver is granted and the rules may provide that a person who fails to comply with such a condition commits an offence and is liable on conviction to a fine not exceeding level 6.
 (11)The Commission may at any time by rules—
 (a)revoke a modification or waiver granted under subsection (8); or
 (b)amend, revoke or add to, any condition subject to which such modification or waiver is granted.
 (12)The Commission shall not exercise its power under subsection (1), (4), (8), (10) or (11) in relation to any registered institution or any associated entity that is an authorized financial institution unless the Commission has first consulted the Monetary Authority.
 (13)A person who fails to comply with a condition imposed under subsection (4) commits an offence and is liable on conviction to a fine at level 6.
 135.Events to be reported by licensed persons and registered institutions
 (1)A licensed person or registered institution who intends to cease to carry on any regulated activity for which he is licensed or registered shall notify the Commission and (in the case of a registered institution) the Monetary Authority in writing of such intended cessation as soon as reasonably practicable and in any event not later than 7 business days before such intended cessation.
 (2)An intermediary shall give to the Commission and (in the case of a registered institution) the Monetary Authority at least 7 business days’ advance notice in writing of any intended change of address at which it proposes to carry on the regulated activity for which it is licensed or registered.
 (3)Subject to subsection (5), where a person has provided any information to the Commission under any provision of this Part and a change in the information occurs, then in such circumstances as are prescribed by rules made under section 397 for the purposes of this subsection, the person shall, within 7 business days of the change, give notice in writing of the change containing a full description of it.
 (4)The notice referred to in subsection (3) shall be given to the following person or persons—
 (a)(where the information has been provided in connection with an application under any provision of this Part and the Commission is still considering the application) the Commission; or
 (b)(in other cases) the Commission and (if the information provided relates to a registered institution) the Monetary Authority.
 (5)Where the information has been provided in connection with an application under any provision of this Part and the application has been refused or withdrawn, subsection (3) shall no longer apply in relation to the information.
 (6)Where a person becomes or ceases to be a director of a licensed corporation, both the person and the corporation shall, within 7 business days thereafter, notify the Commission in writing of the name and address of the person and of the nature of the position which he occupies or has ceased to occupy (as the case may be).
 (7)A person who, without reasonable excuse, contravenes subsection (1), (2), (3) or (6) commits an offence and is liable on conviction to a fine at level 5.
 136.Commission to maintain register of licensed persons and registered institutions
 (1)The Commission shall maintain a register of licensed persons and registered institutions in such form as it considers appropriate.
 (2)The register maintained under subsection (1) shall contain in relation to each licence or registration—
 (a)the name and business address of the licensed person or registered institution (as the case may be);
 (b)such conditions of the licence or registration (as the case may be) as the Commission considers appropriate;
 (c)in relation to each licensed representative, the name of his principal;
 (d)in relation to the licensed corporation or registered institution (as the case may be) the name and business address of each of its executive officers; and
 (e)such other particulars as are prescribed by rules made under section 397 for the purposes of this subsection.
 (3)The register may be maintained—
 (a)in a documentary form; or
 (b)by recording the information required under subsection (2) otherwise than in a documentary form, so long as the information is capable of being reproduced in a legible form.
 (4)For the purposes of enabling any member of the public to ascertain whether he is dealing with a licensed person or a registered institution in matters of or connected with any regulated activity and to ascertain the particulars of the licence or registration of such person or institution (as the case may be), the register shall be made available for public inspection at all reasonable times.
 (5)At all reasonable times, a member of the public may—
 (a)inspect the register, or (where the register is maintained otherwise than in a documentary form) a reproduction of the information or the relevant part of it in a legible form; and
 (b)obtain a copy of an entry in or extract of the register on payment of the prescribed fee.
 (6)A document purporting to be—
 (a)a copy of an entry in or extract of the register maintained under this section; and
 (b)certified by an authorized officer of the Commission as a true copy of the entry or extract referred to in paragraph (a),
 shall be admissible as evidence of its contents in any legal proceedings.
 (7)Without derogating from the other provisions of this section, the Commission shall, in addition, cause the register to be available to the public in the form of an on-line record.
 137.Publication of names of licensed persons and registered institutions
 (1)The Commission shall at least once in each year publish at such time and in such manner as it considers appropriate the name and address of each licensed person and registered institution, the regulated activities for which the person or institution is licensed or registered and such conditions of the licence or registration as the Commission considers appropriate.
 (2)If the Commission amends the register maintained under section 136 by adding or removing the name of a licensed person or registered institution or varying the regulated activity for which a licensed person or registered institution is licensed or registered or any condition of a licence or registration, it shall publish particulars of the amendment within one month after making the amendment.
 138.Annual fee and return
 (1)A person licensed under section 116 or 120(1) or a registered institution shall pay to the Commission an annual fee prescribed by rules made under section 395 for the purposes of this subsection.
 (2)The annual fee shall be payable within one month after each anniversary of the date of grant of the licence or certificate of registration (as the case may be), or on such other date as may be approved by the Commission by notice in writing.
 (3)In default of full payment of the annual fee as required under subsection (2), the person shall pay to the Commission an additional sum calculated as follows—
 (a)10% of the fee or such part of the fee (as the case may be) that remains unpaid for the first month after the due date for its payment;
 (b)20% of the fee or such part of the fee (as the case may be) for each subsequent month when it remains unpaid,
 and in calculating the additional sum for the purposes of this subsection, any fraction of a month shall be treated as a month.
 (4)A person licensed under section 116 or 120(1) shall submit an annual return to the Commission—
 (a)within one month after each anniversary of the date on which the person is licensed; or
 (b)by such other date as may be approved by the Commission by notice in writing,
 which return shall contain such information as is prescribed by rules made under section 397 for the purposes of this subsection.
 139.Prohibition of use of certain titles
 (1)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless—
 (a)the person is licensed or registered for Type 1 regulated activity; or
 (b)his name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged in respect of Type 1 regulated activity by a person registered for that regulated activity, while acting in that capacity.
 (2)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless—
 (a)the person is licensed or registered for Type 2 regulated activity; or
 (b)his name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged in respect of Type 2 regulated activity by a person registered for that regulated activity, while acting in that capacity.
 (3)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless the person—
 (a)is licensed for Type 3 regulated activity;
 (b)is an authorized financial institution; or
 (c)is engaged by an authorized financial institution, while acting for the institution in an activity that would have fallen within the meaning of the definition of leveraged foreign exchange trading in Part 2 of Schedule 5 but for paragraph (xii) of that definition.
 (4)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless—
 (a)the person is licensed or registered for Type 4 regulated activity; or
 (b)his name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged in respect of Type 4 regulated activity by a person registered for that regulated activity, while acting in that capacity.
 (5)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless—
 (a)the person is licensed or registered for Type 5 regulated activity; or
 (b)his name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged in respect of Type 5 regulated activity by a person registered for that regulated activity, while acting in that capacity.
 (6)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless—
 (a)the person is licensed or registered for Type 6 regulated activity; or
 (b)his name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged in respect of Type 6 regulated activity by a person registered for that regulated activity, while acting in that capacity.
 (7)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless—
 (a)the person is licensed or registered for Type 7 regulated activity;
 (b)the person is granted an authorization under section 95(2) to provide automated trading services;
 (c)his name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as engaged in respect of Type 7 regulated activity by a person registered for that regulated activity, while acting in that capacity; or
 (d)the person is an employee of a person authorized under section 95(2) to provide automated trading services, while acting for that person in that regulated activity.
 (8)A person shall not take or use any of the specified titles set out opposite to the reference to this subsection in column 2 of Schedule 6 unless the person—
 (a)is licensed for Type 8 regulated activity;
 (b)is an authorized financial institution; or
 (c)is engaged by an authorized financial institution, while acting for the institution in an activity that would have fallen within the meaning of the definition of securities margin financing in Part 2 of Schedule 5 but for paragraph (v) of that definition.
 (9)A person shall not take or use any title, other than any specified title referred to in subsection (1), (2), (3), (4), (5), (6), (7) or (8), which suggests that—
 (a)he carries on a business in any regulated activity referred to in any of those subsections; or
 (b)he performs any regulated function in relation to a regulated activity referred to in any of those subsections which is carried on as a business,
 unless he falls within the description specified in a paragraph of such of those subsections.
 (10)A person who contravenes subsection (1), (2), (3), (4), (5), (6), (7), (8) or (9) commits an offence and is liable on conviction to a fine at level 6 and, in the case of a continuing offence, to a further fine of $2,000 for every day during which the offence continues.
 140.Procedural requirements
 (1)If the Commission forms a preliminary view to—
 (a)refuse the whole or a part of an application made under this Part;
 (b)impose conditions on approving an application; or
 (c)amend or revoke the conditions of, or impose new conditions to—
 (i)a licence granted under section 116, 117, 120 or 121, or any registration under section 119;
 (ii)an accreditation approved or transferred under section 122;
 (iii)an approval for a person to be a responsible officer under section 126 or to become or continue to be (as the case may be) a substantial shareholder under section 132; or
 (iv)a modification or waiver granted under section 134(1),
 then the Commission shall, before making its final decision—
 (i)inform the applicant or the relevant licensed corporation, registered institution, licensed representative, responsible officer or approved substantial shareholder (as the case may be) of the ground for the preliminary view; and
 (ii)give such person a reasonable opportunity of being heard.
 (2)When the Commission makes a final decision, it shall, as soon as reasonably practicable, notify the applicant or the relevant licensed corporation, registered institution, licensed representative, responsible officer or approved substantial shareholder (as the case may be) in writing of its decision and the reasons for making such decision.
 141.Service of notices, etc. on licensed persons
 (1)Notwithstanding section 400, any written notice, decision or direction or other document (however described) to be, or required to be, issued or served (however described) to or on a licensed person for the purposes of this Ordinance shall for all purposes be regarded as duly issued or served only if—
 (a)in the case of an individual, it is—
 (i)delivered to him by hand; or
 (ii)(A)left at, or sent by post to, the last residential address;
 (B)sent by facsimile transmission to the last facsimile number; or
 (C)sent by electronic mail transmission to the last electronic mail address,
 provided by the person to the Commission pursuant to section 120(6) or 121(4) (as the case may be); or
 (b)in the case of a corporation, it is—
 (i)delivered to any officer of the corporation by hand; or
 (ii)(A)left at, or sent by post to, the last address;
 (B)sent by facsimile transmission to the last facsimile number; or
 (C)sent by electronic mail transmission to the last electronic mail address,
 provided by the corporation to the Commission pursuant to section 116, 117, 130(1), 135(2) or 138(4) (as the case may be).
 (2)Where a notice, decision or direction or other document (however described) is regarded as duly issued or served to or on a licensed person under subsection (1)(a)(ii) or (b)(ii), it shall for all purposes be regarded as issued or served to or on the licensed person, and as coming to his notice, at the time when—
 (a)where it is left at an address, it is so left at that address;
 (b)where it is sent by post to an address, it would in the ordinary course of post be delivered to that address;
 (c)where it is sent by facsimile transmission to a facsimile number, it would in the ordinary course of transmission by facsimile be received at that number; or
 (d)where it is sent by electronic mail transmission to an electronic mail address, it would in the ordinary course of transmission by electronic mail be received at that address.
 142.Amendment of Schedule 5
 The Financial Secretary may, by notice published in the Gazette, amend Schedule 5.
 143.Amendment of Schedule 6
 The Commission may, by notice published in the Gazette, amend Schedule 6.
 Part VI
 Capital Requirements, Client Assets, Records and Audit Relating to Intermediaries
 (Format changes—E.R. 3 of 2015)
 Division 1Interpretation
 144.Interpretation of Part VI
 In this Part, unless the context otherwise requires—
 specified amount requirements (指明數額規定) means the requirements specified in the financial resources rules pursuant to section 145(2)(a)(i).
 Division 2Capital requirements
 145.Financial resources of licensed corporations
 (1)The Commission may, after consultation with the Financial Secretary, make rules requiring licensed corporations to maintain such financial resources as are specified in the rules.
 (2)Without limiting the generality of subsection (1) and without prejudice to section 398(7) and (8), the Commission may in the rules referred to in subsection (1)—
 (a)require licensed corporations to maintain financial resources in accordance with—
 (i)specified requirements as to the amount in which they are to be maintained; and
 (ii)any other specified requirements;
 (b)specify the assets, liabilities and other matters to be taken into account under the rules to determine the amount of the financial resources of licensed corporations for the purposes of the rules and the extent to which, and the manner in which, they are to be taken into account for that purpose;
 (c)provide for the different treatment of the assets, liabilities and other matters for the purposes of the rules according to whether or not they are approved by the Commission for that purpose;
 (d)provide that the rules, or any of the provisions of the rules, do not apply to licensed corporations which maintain financial resources, in Hong Kong or elsewhere, in accordance with an authorization of an authority, in Hong Kong or elsewhere, which in the opinion of the Commission performs a function which involves the imposition of requirements relating to financial resources of persons carrying on activities similar to any regulated activity for which a licensed person may be licensed, or apply to such licensed corporations with specified modifications or only in specified circumstances;
 (e)provide for the grant of approvals for specified purposes and for the amendment or revocation of such approvals, and for the publication of such approvals and of any amendment or revocation of such approvals in the specified manner;
 (f)require licensed corporations to submit to the Commission—
 (i)at specified intervals, returns relating to their financial resources and trading activities; and
 (ii)notice in writing of specified circumstances relating to their financial resources and trading activities;
 (g)require licensed corporations to submit returns to the Commission in response to a request by the Commission for information relating to their financial resources and trading activities;
 (h)provide for any other matter relating to financial resources of licensed corporations.
 145A.Commission may vary financial resources rules for particular licensed corporations
 (1)The Commission may, by a written notice served on a licensed corporation that engages in acts involving OTC derivative transactions, vary any financial resources rule applicable to the corporation, if satisfied, on reasonable grounds, that it is prudent to make the variation, taking into account risks associated with the corporation.
 (2)If the Commission proposes to serve a notice under subsection (1) on a licensed corporation, it must serve a draft of the notice (draft notice) on the corporation.
 (3)A draft notice must—
 (a)specify—
 (i)the financial resources rule proposed to be varied;
 (ii)the manner in which that rule is proposed to be varied; and
 (iii)the grounds for the proposed variation; and
 (b)include a statement that the corporation may, within 14 days, or a longer period the Commission allows in a particular case, from the date of service of the draft notice, make written representations to the Commission on any or all of the matters specified in the draft notice.
 (4)If representations are made in accordance with subsection (3)(b) on a draft notice served on a licensed corporation, the Commission may, after considering the representations—
 (a)serve a notice on the corporation under subsection (1) in substantially the same terms as the draft notice;
 (b)serve a notice on the corporation under subsection (1) in terms modified to take account of any one or more of those representations that satisfy the Commission that the modification ought to be made; or
 (c)elect not to serve a notice on the corporation under subsection (1) because one or more of those representations satisfy the Commission that it should neither take the action mentioned in paragraph (a) nor take the action mentioned in paragraph (b).
 (5)If no representations are made in accordance with subsection (3)(b) on a draft notice served on a licensed corporation, the Commission may serve a notice on the corporation under subsection (1) in substantially the same terms as the draft notice.
 (6)If a financial resources rule applicable to a licensed corporation that engages in OTC derivative transactions is varied under this section, this Part (including rules made under section 145) applies, in relation to that corporation, with all necessary modifications to take account of the financial resources rule so varied.
 (7)To avoid doubt—
 (a)the Commission may serve a draft notice on a licensed corporation in substitution for an earlier draft notice served on the corporation; and
 (b)the reference to substantially the same terms as the draft notice in subsections (4)(a) and (5) is not to be construed to include the statement required to be included in a draft notice under subsection (3)(b).
 (8)The variation of a financial resources rule under subsection (1) takes effect at the time of the service of the written notice of the variation on the licensed corporation under that subsection or at the time specified in the notice, whichever is the later.
 (Added 6 of 2014 s. 14)
 146.Failure to comply with financial resources rules
 (1)If a licensed corporation becomes aware of its inability to maintain, or to ascertain whether it maintains, financial resources in accordance with the specified amount requirements that apply to it, it shall—
 (a)as soon as reasonably practicable notify the Commission by notice in writing of that fact; and
 (b)subject to subsection (2), immediately cease carrying on any regulated activity for which it is licensed, otherwise than for the purpose of completing such transactions as the Commission may permit.
 (2)Where the Commission considers appropriate, the Commission may permit a licensed corporation which gives notice to the Commission under subsection (1)(a) to carry on any regulated activity for which it is licensed, subject to such conditions as may be imposed by the Commission by notice given to it, whether orally or in writing.
 (3)If a licensed corporation becomes aware of its inability to comply with, or to ascertain whether it complies with, all or any of the requirements of the financial resources rules that apply to it, other than the specified amount requirements, it shall within one business day thereafter notify the Commission by notice in writing of that fact.
 (4)Without limiting the generality of the financial resources rules and the rules that may be made under section 151, a licensed corporation to which any of the requirements of the financial resources rules apply shall—
 (a)keep its records in sufficient detail to establish readily whether all of such requirements are being complied with; and
 (b)where the Commission by notice in writing served on it requires it to do so, make its records available to the Commission within 5 business days after the service of the notice.
 (5)Without prejudice to sections 194 and 195, where the Commission reasonably believes that a licensed corporation is unable to maintain, or to ascertain whether it maintains, financial resources in accordance with the specified amount requirements that apply to it, the Commission may, whether or not notice has been given under subsection (1)(a)—
 (a)by notice in writing served on the licensed corporation suspend the licensed corporation’s licence, whether in relation to all or any, or any part of all or any, of the regulated activities for which it is licensed for such period or until the occurrence of such event as the Commission may specify; or
 (b)permit the licensed corporation to carry on any regulated activity for which it is licensed, subject to such conditions as may be imposed by the Commission by notice given to it, whether orally or in writing.
 (6)Where any conditions are imposed pursuant to subsection (2) or (5)(b) by notice given to a licensed corporation in writing, the Commission may amend any of the conditions in such manner as may be specified by the Commission, by notice given to the licensed corporation, whether orally or in writing, and where any of the conditions are so amended—
 (a)such conditions shall have effect subject to the amendment accordingly; and
 (b)where the conditions are amended by notice in writing, this subsection shall apply, with necessary modifications, to the conditions as so amended as if they had been imposed pursuant to subsection (2) or (5)(b) (as the case may be).
 (7)Where any conditions are imposed pursuant to subsection (2) or (5)(b), or amended under subsection (6), by notice given to a licensed corporation otherwise than in writing, the Commission shall as soon as reasonably practicable give the licensed corporation a further notice in writing to confirm the conditions imposed or the conditions as amended (as the case may be), subject to such amendment (if any) in respect of the conditions as it may specify in the notice, and where any conditions are so confirmed subject to any amendment—
 (a)the conditions shall have effect subject to the amendment accordingly; and
 (b)subsection (6) shall apply, with necessary modifications, to the conditions as so amended as if they had been imposed pursuant to subsection (2) or (5)(b) (as the case may be).
 (8)Notwithstanding anything in this section, the Commission shall not impose any conditions pursuant to subsection (2) or (5)(b), or amend any conditions under subsection (6), by notice given to a licensed corporation otherwise than in writing if the licensed corporation has on the occasion of being heard pursuant to subsection (12) in respect of the imposition or amendment (as the case may be) made a request to the Commission that the conditions shall only be so imposed, or amended, by notice given to it in writing.
 (9)The suspension of a licence under subsection (5)(a) takes effect at the time when notice is served in respect of it pursuant to that subsection or at the time specified in the notice, whichever is the later.
 (10)The imposition of any conditions pursuant to subsection (2) or (5)(b), or the amendment of any conditions under or pursuant to subsection (6) or (7), takes effect at the time when notice is given in respect of it pursuant to such subsection or at the time specified in the notice, whichever is the later.
 (11)Where a licence of a licensed corporation is suspended under subsection (5)(a), sections 200(1), 201(2) and (5), 202 and 203 shall apply, with necessary modifications, in relation to the suspension as if it were a suspension under section 194 or 195.
 (12)Notwithstanding anything in this section, the Commission shall not exercise any power under subsection (1)(b), (2), (4)(b), (5), (6), (7), (9) or (10) in respect of a licensed corporation unless the Commission has given the licensed corporation a reasonable opportunity of being heard.
 (13)A licensed corporation which contravenes subsection (1)(a) or (b) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $100,000 for every day during which the offence continues; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months and, in the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues.
 (14)A licensed corporation which contravenes a condition imposed pursuant to subsection (2) or (5)(b), or as amended under or pursuant to subsection (6) or (7), commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $100,000 for every day during which the offence continues; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months and, in the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues.
 (15)A licensed corporation which, without reasonable excuse, contravenes subsection (3) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (16)A licensed corporation which contravenes subsection (4) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (17)The financial resources rules may provide that a licensed corporation which, without reasonable excuse, contravenes any specified provision of the financial resources rules that applies to it, other than that imposing any of the specified amount requirements, commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $200,000 and a term of imprisonment of 1 year;
 (b)on summary conviction a fine at level 5 and a term of imprisonment of 6 months.
 (18)A licensed corporation is not excused from complying with subsection (3) only on the ground that to do so might tend to incriminate it.
 147.Monitoring compliance with financial resources rules
 (1)The Commission may at any time, by notice in writing served on an executive officer of a licensed corporation, require the licensed corporation to satisfy the Commission that it complies with all of the requirements of the financial resources rules that apply to it.
 (2)Without limiting the generality of subsection (1), the Commission and any person authorized by the Commission under subsection (12) may exercise any of the powers of an auditor referred to in section 162 for the purpose of ascertaining whether a licensed corporation complies with all of the requirements of the financial resources rules that apply to it.
 (3)Without prejudice to sections 194 and 195, where a licensed corporation, upon being required to do so under subsection (1), fails to satisfy the Commission that it maintains financial resources in accordance with the specified amount requirements that apply to it, the Commission may—
 (a)by notice in writing served on the licensed corporation suspend the licensed corporation’s licence, whether in relation to all or any, or any part of all or any, of the regulated activities for which it is licensed for such period or until the occurrence of such event as the Commission may specify; or
 (b)permit the licensed corporation to carry on any regulated activity for which it is licensed, subject to such conditions as may be imposed by the Commission by notice given to it, whether orally or in writing.
 (4)Where any conditions are imposed pursuant to subsection (3)(b) by notice given to a licensed corporation in writing, the Commission may amend any of the conditions in such manner as may be specified by the Commission, by notice given to the licensed corporation, whether orally or in writing, and where any of the conditions are so amended—
 (a)such conditions shall have effect subject to the amendment accordingly; and
 (b)where the conditions are amended by notice in writing, this subsection shall apply, with necessary modifications, to the conditions as so amended as if they had been imposed pursuant to subsection (3)(b).
 (5)Where any conditions are imposed pursuant to subsection (3)(b), or amended under subsection (4), by notice given to a licensed corporation otherwise than in writing, the Commission shall as soon as reasonably practicable give the licensed corporation a further notice in writing to confirm the conditions imposed or the conditions as amended (as the case may be), subject to such amendment (if any) in respect of the conditions as it may specify in the notice, and where any conditions are so confirmed subject to any amendment—
 (a)the conditions shall have effect subject to the amendment accordingly; and
 (b)subsection (4) shall apply, with necessary modifications, to the conditions as so amended as if they had been imposed pursuant to subsection (3)(b).
 (6)Notwithstanding anything in this section, the Commission shall not impose any conditions pursuant to subsection (3)(b), or amend any conditions under subsection (4), by notice given to a licensed corporation otherwise than in writing if the licensed corporation has on the occasion of being heard pursuant to subsection (10) in respect of the imposition or amendment (as the case may be) made a request to the Commission that the conditions shall only be so imposed, or amended, by notice given to it in writing.
 (7)The suspension of a licence under subsection (3)(a) takes effect at the time when notice is served in respect of it pursuant to that subsection or at the time specified in the notice, whichever is the later.
 (8)The imposition of any conditions pursuant to subsection (3)(b), or the amendment of any conditions under or pursuant to subsection (4) or (5), takes effect at the time when notice is given in respect of it pursuant to such subsection or at the time specified in the notice, whichever is the later.
 (9)Where a licence of a licensed corporation is suspended under subsection (3)(a), sections 200(1), 201(2) and (5), 202 and 203 shall apply, with necessary modifications, in relation to the suspension as if it were a suspension under section 194 or 195.
 (10)Notwithstanding anything in this section—
 (a)the Commission or any person authorized by the Commission under subsection (12) shall not exercise any power under subsection (2) in respect of a licensed corporation;
 (b)the Commission shall not exercise any power under subsection (3), (4), (5), (7) or (8) in respect of a licensed corporation,
 unless the Commission or the person (as the case may be) has given the licensed corporation a reasonable opportunity of being heard.
 (11)A licensed corporation which contravenes a condition imposed pursuant to subsection (3)(b), or as amended under or pursuant to subsection (4) or (5), commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $100,000 for every day during which the offence continues; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months and, in the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues.
 (12)For the purposes of subsection (2), the Commission may authorize any person in writing to exercise any of the powers referred to in that subsection.
 Division 3Client assets
 148.Client securities and collateral held by intermediaries and their associated entities
 (1)The Commission may make rules requiring intermediaries and their associated entities to treat and deal with client securities and collateral of the intermediaries, and to ensure that client securities and collateral of the intermediaries that are received or held by any other person on behalf of the intermediaries or the associated entities (as the case may be) are treated and dealt with, in such manner as is specified in the rules.
 (2)Without limiting the generality of subsection (1) and without prejudice to section 398(7) and (8), the Commission may in the rules referred to in subsection (1)—
 (a)require client securities and collateral of intermediaries to be held, and accounted for, in the specified manner;
 (b)provide that the client securities and collateral shall not be deposited, transferred, lent, pledged, repledged or otherwise dealt with except in the specified manner;
 (c)specify the circumstances in which the client securities and collateral may, notwithstanding that they are subject to a lawful claim or lien, be dealt with by intermediaries or their associated entities;
 (d)provide for the approval, subject to such conditions as the Commission considers appropriate, of companies or non-Hong Kong companies as being suitable for the safe custody of the client securities and collateral; (Amended 30 of 2004 s. 3)
 (e)require intermediaries and their associated entities to ensure, or to take reasonable steps to ensure, that persons who receive or hold the client securities and collateral on behalf of the intermediaries or the associated entities (as the case may be) comply with specified requirements;
 (f)require the maintenance of records in relation to the client securities and collateral (including records of performance of reconciliations in respect of movements of the client securities and collateral into and out of accounts of intermediaries or their associated entities) in the specified manner;
 (g)require the submission to the Commission, upon request or at specified intervals, of specified information, records and documents for the purpose of enabling the Commission to ascertain readily whether the rules are being complied with;
 (h)require specified matters, and the circumstances relevant thereto, to be notified to the clients of intermediaries or the Commission, or both;
 (i)require a person who becomes aware that he does not comply with any specified provision of the rules that applies to him to notify the Commission of that fact and of any further specified information, within the specified time;
 (j)provide for any other matter relating to the client securities and collateral.
 (3)Except as provided in the rules made under this section, client securities and collateral of an intermediary are not liable to be taken in execution against the intermediary or an associated entity of the intermediary under the order or process of a court.
 (4)Rules made under this section may provide that an intermediary, or an associated entity of an intermediary, which, without reasonable excuse, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $200,000 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 6 and a term of imprisonment of 6 months.
 (5)Rules made under this section may provide that an intermediary, or an associated entity of an intermediary, which, with intent to defraud, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $1,000,000 and a term of imprisonment of 7 years;
 (b)on summary conviction a fine of $500,000 and a term of imprisonment of 1 year.
 (6)A person is not excused from complying with a requirement in any rules made pursuant to subsection (2)(i) to give notification to the Commission only on the ground that to do so might tend to incriminate the person.
 (7)Notwithstanding anything in this section—
 (a)the power of the Commission to make rules under this section in respect of intermediaries shall, where the intermediaries are registered institutions, be regarded as the power to make rules in respect of the intermediaries only in relation to client securities and collateral received or held by them in the course of the businesses which constitute any regulated activities for which they are registered;
 (b)the power of the Commission to make rules under this section in respect of associated entities shall, where the associated entities are authorized financial institutions, be regarded as the power to make rules in respect of the associated entities only in relation to client securities and collateral received or held by them in the course of their businesses of receiving or holding client securities and collateral of intermediaries of which they are associated entities.
 (8)Notwithstanding anything in subsection (3), that subsection—
 (a)applies to client securities and collateral received or held by a registered institution only if the client securities and collateral were received or held by the registered institution in the course of the business which constitutes any regulated activity for which the registered institution is registered;
 (b)applies to client securities and collateral received or held by an associated entity that is an authorized financial institution only if the client securities and collateral were received or held by the associated entity in the course of its business of receiving or holding client securities and collateral of the intermediary of which the associated entity is an associated entity.
 149.Client money held by licensed corporations and their associated entities
 (1)The Commission may make rules requiring licensed corporations and their associated entities to treat and deal with client money of the licensed corporations in such manner as is specified in the rules.
 (2)Without limiting the generality of subsection (1) and without prejudice to section 398(7) and (8), the Commission may in the rules referred to in subsection (1)—
 (a)require client money of licensed corporations or any part thereof to be paid into segregated accounts established for client money and designated as trust accounts or client accounts;
 (b)specify when and how the client money or any part thereof is to be paid into such accounts and require it to be dealt with, and accounted for, in the specified manner;
 (c)specify the amount or proportion of the client money that is not to be paid into such accounts, and the deductions that may be made before the client money is paid into such accounts;
 (d)specify the circumstances in which the client money may be paid out of such accounts, including the circumstances in which the client money that is the subject of a lawful claim or lien may be paid out of such accounts;
 (e)require interest accruing from the holding of the client money in such accounts to be dealt with and paid in the specified manner;
 (f)specify the persons in Hong Kong with whom such accounts are to be established and maintained;
 (g)provide for authorization by the Commission as a condition for payment out of such accounts in specified circumstances;
 (h)require the maintenance of records in relation to such accounts (including records of performance of reconciliations of payments of the client money into and out of such accounts) in the specified manner;
 (i)require the submission to the Commission, upon request or at specified intervals, of specified information, records and documents for the purpose of enabling the Commission to ascertain readily whether the rules are being complied with;
 (j)require specified matters, and the circumstances relevant thereto, to be notified to the clients of licensed corporations or the Commission, or both;
 (k)require a person who becomes aware that he does not comply with any specified provision of the rules that applies to him to notify the Commission of that fact and of any further specified information, within the specified time;
 (l)provide for any other matter relating to the client money.
 (3)Except as provided in the rules made under this section, client money of a licensed corporation is not liable to be taken in execution against the licensed corporation or an associated entity of the licensed corporation under the order or process of a court.
 (4)Rules made under this section may provide that a licensed corporation, or an associated entity of a licensed corporation, which, without reasonable excuse, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $200,000 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 6 and a term of imprisonment of 6 months.
 (5)Rules made under this section may provide that a licensed corporation, or an associated entity of a licensed corporation, which, with intent to defraud, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $1,000,000 and a term of imprisonment of 7 years;
 (b)on summary conviction a fine of $500,000 and a term of imprisonment of 1 year.
 (6)A person is not excused from complying with a requirement in any rules made pursuant to subsection (2)(k) to give notification to the Commission only on the ground that to do so might tend to incriminate the person.
 (7)Notwithstanding anything in this section, no rules made under this section shall apply to associated entities that are authorized financial institutions.
 (8)Notwithstanding anything in subsection (3), that subsection does not prevent client money of a licensed corporation that is received or held by an associated entity that is an authorized financial institution from being taken in execution against the associated entity.
 150.Claims and liens not affected
 Nothing in sections 148 and 149 and any rules made under any of those sections shall be construed as taking away or affecting a lawful claim or lien which any person has in respect of client assets of an intermediary (whether received or held by the intermediary or an associated entity of the intermediary), but the existence of any such claim or lien does not relieve the intermediary or an associated entity of the intermediary of the duty to comply with the requirements of those rules that apply to the intermediary or the associated entity (as the case may be).
 Division 4Records
 151.Keeping of accounts and records by intermediaries and their associated entities
 (1)The Commission may make rules to provide for—
 (a)the keeping by intermediaries of such accounts and records as are specified in the rules;
 (b)the keeping by associated entities of intermediaries of such accounts and records in respect of client assets of the intermediaries that they receive or hold as are specified in the rules.
 (2)Without limiting the generality of subsection (1) and without prejudice to section 398(7) and (8), the Commission may in the rules referred to in subsection (1)—
 (a)require intermediaries and their associated entities to keep the specified accounts and records for specified purposes;
 (b)provide for the manner in which the accounts and records are to be kept;
 (c)provide for the period for which, and the location at which, the accounts and records are to be kept before they may be destroyed;
 (d)require a person who becomes aware that he does not comply with any specified provision of the rules that applies to him to notify the Commission of that fact and of any further specified information, within the specified time;
 (e)provide for any other matter relating to accounts and records to be kept, whether by intermediaries or their associated entities.
 (3)An entry in the accounts or records of an intermediary or an associated entity of an intermediary shall, in the absence of evidence to the contrary, be deemed to have been made by or with the authority of the intermediary or the associated entity (as the case may be).
 (4)A person who, with intent to defraud—
 (a)enters, records or stores, or causes to be entered, recorded or stored, in any accounts or records kept in compliance with, or in purported compliance with, rules made under this section, any matter which he knows to be false or misleading in a material particular;
 (b)deletes, destroys, removes or falsifies, or causes to be deleted, destroyed, removed or falsified, any matter that has been entered, recorded or stored in any accounts or records kept in compliance with, or in purported compliance with, rules made under this section; or
 (c)fails to enter, record or store in any accounts or records kept in compliance with, or in purported compliance with, rules made under this section, as soon as reasonably practicable, any matter that should be so entered, recorded or stored,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (ii)on summary conviction to a fine of $500,000 and to imprisonment for 1 year.
 (5)Rules made under this section may provide that an intermediary, or an associated entity of an intermediary, which, without reasonable excuse, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $200,000 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 6 and a term of imprisonment of 6 months.
 (6)Rules made under this section may provide that an intermediary, or an associated entity of an intermediary, which, with intent to defraud, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $1,000,000 and a term of imprisonment of 7 years;
 (b)on summary conviction a fine of $500,000 and a term of imprisonment of 1 year.
 (7)A person is not excused from complying with a requirement in any rules made pursuant to subsection (2)(d) to give notification to the Commission only on the ground that to do so might tend to incriminate the person.
 (8)Notwithstanding anything in this section, the power of the Commission to make rules under this section in respect of intermediaries shall, where the intermediaries are registered institutions, be regarded as the power to make rules in respect of the intermediaries only in relation to accounts and records relating to the businesses which constitute any regulated activities for which they are registered.
 152.Provision of contract notes, receipts, statements of account and notifications by intermediaries and their associated entities
 (1)The Commission may make rules to provide for—
 (a)the preparation by intermediaries of such contract notes, receipts, statements of account and notifications as are specified in the rules, and the provision thereof to clients of the intermediaries;
 (b)the preparation by associated entities of intermediaries, in respect of client assets of the intermediaries that they receive or hold, of such receipts, statements of account and notifications as are specified in the rules, and the provision thereof to clients of the intermediaries.
 (2)Without limiting the generality of subsection (1) and without prejudice to section 398(7) and (8), the Commission may in the rules referred to in subsection (1)—
 (a)require intermediaries, in relation to all transactions they enter into, over any specified period of time, with or on behalf of a client of the intermediaries in the conduct of any of the businesses which constitute any regulated activities for which they are licensed or registered, to prepare and provide to the client a contract note and, where applicable, a statement of account in the specified manner and circumstances;
 (b)require intermediaries and their associated entities, in relation to every client of the intermediaries to whom the intermediaries have provided financial accommodation, to prepare and provide to the client a statement of account in the specified manner and circumstances;
 (c)require intermediaries and their associated entities, in relation to every receipt of client assets from or for the account of a client of the intermediaries, to prepare and provide to the client a receipt in the specified manner and circumstances;
 (d)require intermediaries and their associated entities, in relation to every notification which relates to client assets received or held by the intermediaries or the associated entities (as the case may be) on behalf of a client of the intermediaries, and which is received from any person other than the client (including any notification concerning any entitlement relating to client assets), to prepare and provide to the client a notification in the specified manner and circumstances;
 (e)provide for the time when contract notes, receipts, statements of account and notifications are to be provided and the period for which, and the location at which, copies thereof are to be kept before they may be destroyed;
 (f)require a person who becomes aware that he does not comply with any specified provision of the rules that applies to him to notify the Commission of that fact and of any further specified information, within the specified time;
 (g)provide for any other matter relating to contract notes, receipts, statements of account and notifications to be prepared and provided to clients of intermediaries, whether by the intermediaries or their associated entities.
 (3)Rules made under this section may provide that an intermediary, or an associated entity of an intermediary, which, without reasonable excuse, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $200,000 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 6 and a term of imprisonment of 6 months.
 (4)Rules made under this section may provide that an intermediary, or an associated entity of an intermediary, which, with intent to defraud, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $1,000,000 and a term of imprisonment of 7 years;
 (b)on summary conviction a fine of $500,000 and a term of imprisonment of 1 year.
 (5)A person is not excused from complying with a requirement in any rules made pursuant to subsection (2)(f) to give notification to the Commission only on the ground that to do so might tend to incriminate the person.
 (6)Notwithstanding anything in this section, the power of the Commission to make rules under this section in respect of intermediaries shall, where the intermediaries are registered institutions, be regarded as the power to make rules in respect of the intermediaries only in relation to contract notes, receipts, statements of account and notifications relating to the businesses which constitute any regulated activities for which they are registered.
 Division 5Audit
 153.Auditor to be appointed by licensed corporations and associated entities of intermediaries
 (1)A licensed corporation shall appoint an auditor to perform the functions required of an auditor of the corporation under or pursuant to the provisions of this or any other Ordinance.
 (2)An associated entity of an intermediary shall appoint an auditor to perform the functions required of an auditor of the associated entity under or pursuant to the provisions of this or any other Ordinance.
 (3)A licensed corporation, and an associated entity of an intermediary, shall, within 7 business days after its appointment of an auditor under subsection (1) or (2) (as the case may be), notify the Commission by notice in writing of the name and address of the auditor.
 (4)A person—
 (a)is not eligible for appointment as an auditor under subsection (1) or (2)—
 (i)if he is an officer or employee of the licensed corporation or the associated entity the accounts of which are to be audited, or is in the employment of such an officer or employee; or
 (ii)if he belongs to a class of persons prescribed by rules made under section 397 for the purposes of this subsection;
 (b)is, subject to paragraph (a), eligible for appointment as an auditor under subsection (1) or (2), notwithstanding that he is, apart from that appointment, already an auditor appointed by the licensed corporation or the associated entity the accounts of which are to be audited, whether for the purposes of the Companies Ordinance (Cap. 622) or otherwise. (Amended 28 of 2012 ss. 912 & 920)
 (5)A licensed corporation, or an associated entity of an intermediary, which fails to appoint an auditor in accordance with subsection (1) or (2) within one month after—
 (a)it becomes licensed or becomes such an associated entity (as the case may be); or
 (b)the auditor first appointed under subsection (1) or (2) after it becomes licensed or becomes such an associated entity, or any auditor further appointed under subsection (1) or (2), ceases to be an auditor of the licensed corporation or of the associated entity (as the case may be),
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (ii)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (6)A licensed corporation, or an associated entity of an intermediary, which contravenes subsection (3) commits an offence and is liable on conviction to a fine at level 5.
 (7)Nothing in this section prejudices the operation of any other requirements relating to the appointment of an auditor, whether under the Companies Ordinance (Cap. 622) or otherwise. (Amended 28 of 2012 ss. 912 & 920)
 (8)In this section, a reference to an associated entity of an intermediary shall be construed as a reference to such associated entity other than one that is an authorized financial institution.
 154.Notification of proposed change of auditors by licensed corporations and associated entities of intermediaries
 (1)A licensed corporation, and an associated entity of an intermediary, shall within one business day after—
 (a)it gives notice to its members of a motion, to be moved at its general meeting—
 (i)to remove an auditor appointed by it under section 153 before the expiration of his term of office; or
 (ii)to replace with another auditor, or not to reappoint, an auditor appointed by it under section 153 at the expiration of his term of office; or
 (b)an auditor appointed by it under section 153 ceases to be its auditor before the expiration of his term of office, otherwise than in consequence of a motion referred to in paragraph (a),
 notify the Commission by notice in writing of that fact.
 (2)A licensed corporation, or an associated entity of an intermediary, which contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 5.
 (3)In this section, a reference to an associated entity of an intermediary shall be construed as a reference to such associated entity other than one that is an authorized financial institution.
 155.Notification of end of financial year by licensed corporations and associated entities of intermediaries, etc.
 (1)A licensed corporation, and an associated entity of an intermediary, shall—
 (a)in the case of the licensed corporation, within one month after it becomes licensed; or
 (b)in the case of the associated entity, within one month after it becomes such an associated entity,
 notify the Commission by notice in writing of the date on which its financial year ends.
 (2)A licensed corporation, and an associated entity of an intermediary, shall not—
 (a)except with the approval in writing of the Commission under subsection (3)(a), alter the date notified to the Commission under subsection (1) as the date on which its financial year ends;
 (b)except with the approval in writing of the Commission under subsection (3)(b), adopt any period which exceeds 12 months as its financial year.
 (3)On an application in writing by a licensed corporation or an associated entity of an intermediary, the Commission may, subject to such conditions as it considers appropriate, grant approval in writing in respect of—
 (a)an alteration of the date notified to the Commission under subsection (1) as the date on which its financial year ends;
 (b)the adoption of any period which exceeds 12 months as its financial year.
 (4)A licensed corporation, or an associated entity of an intermediary, which contravenes subsection (1) or (2), or a condition imposed pursuant to subsection (3), commits an offence and is liable on conviction to a fine at level 5.
 (5)Nothing in this section prejudices the operation of section 429 of the Companies Ordinance (Cap. 622). (Amended 28 of 2012 ss. 912 & 920)
 (6)In this section, a reference to an associated entity of an intermediary shall be construed as a reference to such associated entity other than one that is an authorized financial institution.
 156.Audited accounts, etc. to be submitted by licensed corporations and associated entities of intermediaries
 (1)Subject to subsections (3) and (4), a licensed corporation, and an associated entity of an intermediary, shall—
 (a)prepare such financial statements and other documents, for such periods, as are prescribed by rules made under section 397 for the purposes of this section; and
 (b)submit the financial statements and other documents, together with an auditor’s report, to the Commission not later than 4 months after the end of the financial year to which they relate.
 (2)Subject to subsections (3) and (4), a licensed corporation that ceases, in such circumstances as are prescribed by rules made under section 397 for the purposes of this section, carrying on all of the regulated activities for which it is licensed, and an associated entity of an intermediary that ceases to be such an associated entity, shall—
 (a)prepare such financial statements and other documents, which shall be made up to (and including) the date of the cessation, as are prescribed by the rules; and
 (b)submit the financial statements and other documents, together with an auditor’s report, to the Commission not later than 4 months after the date of the cessation.
 (3)Without limiting the generality of subsection (1) or (2), the requirements under such subsection relating to the financial statements and other documents, and the auditor’s report, referred to in such subsection include the requirements that—
 (a)the financial statements and other documents are to relate to such matters and contain such particulars as are prescribed by rules made under section 397 for the purposes of this section;
 (b)the auditor’s report is to contain such particulars, including such statement of opinion, as are prescribed by the rules;
 (c)the financial statements and other documents, and the auditor’s report, are to be prepared in accordance with such principles or bases as are prescribed by the rules; and
 (d)without limiting the generality of section 387 of the Companies Ordinance (Cap. 622), the financial statements and other documents are to be signed by such person as is prescribed by the rules. (Amended 28 of 2012 ss. 912 & 920)
 (4)On an application in writing by the licensed corporation or the associated entity by which any financial statements and other documents, and any auditor’s report, are required under subsection (1) or (2) to be submitted, the Commission may, where it is satisfied that there are special reasons for so doing, extend the period within which the financial statements and other documents, and the auditor’s report, are required to be submitted, for such period and subject to such conditions as the Commission considers appropriate, and upon the Commission granting the extension, subsection (1) or (2) (as the case may be) shall apply subject to the extension accordingly.
 (5)A licensed corporation, or an associated entity of an intermediary, which, without reasonable excuse, contravenes subsection (1) or (2), or a condition imposed pursuant to subsection (4), commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (6)A licensed corporation, or an associated entity of an intermediary, which, with intent to defraud, contravenes subsection (1) or (2), or a condition imposed pursuant to subsection (4), commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (b)on summary conviction to a fine of $500,000 and to imprisonment for 1 year.
 (7)In this section, a reference to an associated entity of an intermediary shall be construed as a reference to such associated entity other than one that is an authorized financial institution.
 157.Auditors of licensed corporations or associated entities of intermediaries to lodge report with Commission, etc. in certain cases
 (1)If a person—
 (a)in the course of performing his functions as an auditor appointed under section 153 by a licensed corporation or an associated entity of an intermediary or, where an associated entity of an intermediary is an authorized financial institution, as an auditor appointed for the purposes of the Banking Ordinance (Cap. 155) by the associated entity, becomes aware of a reportable matter; or
 (b)in the course of performing his functions as an auditor appointed under section 153 by a licensed corporation or an associated entity of an intermediary, proposes to include any qualification or adverse statement in any report prepared by him on the financial statements or other documents of the licensed corporation or the associated entity (as the case may be) which are required to be submitted to the Commission under section 156,
 he shall—
 (i)in the case of paragraph (a), as soon as reasonably practicable after he becomes aware of the reportable matter, lodge with—
 (A)in the case of an auditor appointed under section 153 by a licensed corporation or an associated entity of an intermediary, the Commission; or
 (B)in the case of an auditor appointed for the purposes of the Banking Ordinance (Cap. 155) by an associated entity of an intermediary, the Commission and the Monetary Authority,
 a written report on the reportable matter;
 (ii)in the case of paragraph (b), as soon as reasonably practicable after he first proposes the inclusion of the qualification or adverse statement, lodge with the Commission a written report on the qualification or adverse statement.
 (2)If a person appointed as an auditor under section 153 by a licensed corporation or an associated entity of an intermediary—
 (a)resigns as an auditor of the licensed corporation or the associated entity (as the case may be) before the expiration of his term of office as such auditor;
 (b)does not seek reappointment as an auditor of the licensed corporation or the associated entity (as the case may be) at the expiration of his term of office as such auditor; or
 (c)otherwise ceases to be an auditor of the licensed corporation or the associated entity (as the case may be),
 he shall within one business day thereafter notify the Commission by notice in writing of that fact, and in the notice state the reasons therefor, and give particulars of any connected circumstances which he considers should be brought to the attention of the Commission or, where no such circumstances exist, make a statement to that effect.
 (3)In this section—
 prescribed requirement (訂明規定) means such of the requirements under any of the rules made under section 148, 149, 151 or 152 as are prescribed by rules made under section 397 for the purposes of this definition;
 reportable matter (須報告事項), in relation to a person acting as an auditor within the meaning of subsection (1)(a), means a matter that, in the opinion of the person—
 (a)in the case of a licensed corporation—
 (i)constitutes on the part of the licensed corporation or any of its associated entities a failure to comply with any prescribed requirement;
 (ii)adversely affects to a material extent the financial position of the licensed corporation or any of its associated entities; or
 (iii)constitutes on the part of the licensed corporation a failure to comply with section 146 or with all or any of the requirements of the financial resources rules that apply to it; or
 (b)in the case of an associated entity of an intermediary—
 (i)constitutes on the part of the associated entity a failure to comply with any prescribed requirement; or
 (ii)where the associated entity is not an authorized financial institution, adversely affects to a material extent the financial position of the associated entity.
 158.Immunity in respect of communication with Commission, etc. by auditors of licensed corporations or associated entities of intermediaries
 (1)Without prejudice to sections 380 and 381, no duty which a person may be subject to as an auditor appointed under section 153 by a licensed corporation or an associated entity of an intermediary or, where an associated entity of an intermediary is an authorized financial institution, as an auditor appointed for the purposes of the Banking Ordinance (Cap. 155) by the associated entity shall be regarded as contravened by reason of his communicating in good faith to the Commission or the Monetary Authority, whether or not in response to a request made by the Commission or the Monetary Authority (as the case may be), any information or opinion on a matter which—
 (a)he becomes aware of in his capacity as such auditor (whether or not in the course of performing his functions as such auditor); and
 (b)is relevant to any function of the Commission or the Monetary Authority (as the case may be).
 (2)In addition to applying to a person who is an auditor appointed under section 153 by a licensed corporation or an associated entity of an intermediary, or appointed for the purposes of the Banking Ordinance (Cap. 155) by an associated entity of an intermediary, subsection (1) also applies to—
 (a)a person whose appointment as an auditor appointed under section 153 by a licensed corporation or an associated entity of an intermediary, or appointed for the purposes of the Banking Ordinance (Cap. 155) by an associated entity of an intermediary, has ceased, in which case a reference to a matter in that subsection shall be construed on the basis that paragraph (a) of that subsection requires the matter to be one which he becomes aware of in his capacity as such auditor (whether or not in the course of performing his functions as such auditor) before the appointment has ceased;
 (b)an auditor appointed, whether or not under section 153 or for the purposes of the Banking Ordinance (Cap. 155), by a former licensed corporation or by a former associated entity of an intermediary, in which case a reference to a matter in that subsection shall be construed on the basis that paragraph (a) of that subsection requires the matter to be one which he becomes aware of in his capacity as such auditor (whether or not in the course of performing his functions as such auditor); and
 (c)a person whose appointment as an auditor, whether or not under section 153 or for the purposes of the Banking Ordinance (Cap. 155), by a former licensed corporation or by a former associated entity of an intermediary, has ceased, in which case a reference to a matter in that subsection shall be construed on the basis that paragraph (a) of that subsection requires the matter to be one which he becomes aware of in his capacity as such auditor (whether or not in the course of performing his functions as such auditor) before the appointment has ceased.
 (3)In this section—
 former associated entity of an intermediary (中介人的前有聯繫實體) means a corporation which was formerly an associated entity of an intermediary;
 former licensed corporation (前持牌法團) means a corporation which was formerly a licensed corporation.
 159.Power of Commission to appoint auditors for licensed corporations and their associated entities
 (1)Subject to subsection (3), where—
 (a)a licensed corporation has failed to satisfy the Commission in accordance with section 147 that it complies with all of the requirements of the financial resources rules that apply to it;
 (b)the Commission has reasonable cause to believe that a licensed corporation or any of its associated entities has failed to comply with any prescribed requirement;
 (c)the Commission has reasonable cause to believe that a licensed corporation or any of its associated entities has failed to submit any financial statements or other documents in accordance with section 156; or
 (d)the Commission has received a written report lodged by a person under section 157 in relation to a licensed corporation or any of its associated entities,
 the Commission may appoint an auditor to examine and audit, either generally or in respect of any particular matter, the accounts and records of the licensed corporation and any of its associated entities (including records of transactions entered into by the licensed corporation with any other person and of client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be)), and, without prejudice to section 161, to report to the Commission on such matters as the Commission may direct.
 (2)Where an auditor is appointed under subsection (1) to examine and audit the accounts and records of a licensed corporation and any of its associated entities, the auditor may, for the purpose of carrying out the examination and audit, examine any client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be).
 (3)The Commission shall not appoint an auditor under subsection (1) to examine and audit the accounts and records of an associated entity that is an authorized financial institution unless the Commission has first consulted the Monetary Authority in respect of the appointment and of the scope of the examination and audit to be carried out by the auditor.
 (4)Subject to subsection (5), where an auditor appointed under subsection (1) has examined and audited the accounts and records of a licensed corporation or an associated entity of a licensed corporation, the Commission may, where it is of the opinion that it is appropriate to do so having regard to the conduct (whether before or after the appointment) of the licensed corporation or the associated entity (as the case may be), by notice in writing direct the licensed corporation or the associated entity (as the case may be) to pay a specified amount, being the whole or a part of the costs and expenses of the examination and audit, within the specified time and in the specified manner.
 (5)The Commission shall not give a direction under subsection (4) unless it has given the licensed corporation or the associated entity to which the direction is to be given a reasonable opportunity of being heard.
 (6)Where a licensed corporation or an associated entity of a licensed corporation fails to comply with a direction of the Commission under subsection (4), the Commission may recover the specified amount referred to in the direction as a civil debt due to it.
 (7)In this section, prescribed requirement (訂明規定) means such of the requirements under any of the rules made under section 148, 149, 151 or 152 as are prescribed by rules made under section 397 for the purposes of this definition.
 160.Power of Commission to appoint auditors for licensed corporations and their associated entities on application
 (1)Subject to subsections (3) to (6), on an application in writing by a person who alleges that a licensed corporation or any of its associated entities—
 (a)has failed to account to the person as a client of the licensed corporation for any client assets held on behalf of the person by the licensed corporation or the associated entity (as the case may be); or
 (b)has failed to act in accordance with instructions given by the person as a client of the licensed corporation to the licensed corporation or the associated entity (as the case may be), and has failed—
 (i)to account to the person for any profit that may have been secured or increased by the person had the instructions been followed; or
 (ii)to compensate the person for any loss that may have been avoided or reduced by the person had the instructions been followed,
 the Commission may appoint an auditor to examine and audit, either generally or in respect of any particular matter, the accounts and records of the licensed corporation and any of its associated entities (including records of transactions entered into by the licensed corporation with any other person and of client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be)), and, without prejudice to section 161, to report to the Commission on such matters as the Commission may direct.
 (2)Where an auditor is appointed under subsection (1) to examine and audit the accounts and records of a licensed corporation and any of its associated entities, the auditor may, for the purpose of carrying out the examination and audit, examine any client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be).
 (3)A person making an application pursuant to subsection (1) shall state in the application—
 (a)the particulars of the circumstances in which any licensed corporation or any associated entity of a licensed corporation is alleged to have failed to account for any client assets, or to act in accordance with instructions given to the licensed corporation or the associated entity and to account for any profit or compensate for any loss (as the case may be);
 (b)the particulars of any client assets concerned;
 (c)the particulars of the transactions in respect of which the alleged failure has occurred; and
 (d)any other particulars the Commission may require,
 and shall verify all statements in the application by statutory declaration, which may be taken by any person authorized by the Commission in that behalf.
 (4)The Commission shall not appoint an auditor under subsection (1) unless it is satisfied that—
 (a)the person making the application pursuant to that subsection has a good reason for making the application; and
 (b)it is in the interest of—
 (i)the licensed corporation and the associated entity the accounts and records of which are to be examined and audited by the auditor;
 (ii)the person making the application; or
 (iii)the investing public or the public,
 that the auditor be appointed.
 (5)The Commission shall not appoint an auditor under subsection (1) to examine and audit the accounts and records of an associated entity that is an authorized financial institution unless the Commission has first consulted the Monetary Authority in respect of the appointment and of the scope of the examination and audit to be carried out by the auditor.
 (6)The Commission shall not appoint an auditor under subsection (1) to examine and audit the accounts and records of a licensed corporation or an associated entity of a licensed corporation unless the Commission has given the licensed corporation or the associated entity (as the case may be) a reasonable opportunity of being heard.
 (7)For the purposes of the law of defamation, every statement in an application made pursuant to subsection (1) shall, if made in good faith and without malice, be privileged.
 (8)Subject to subsection (9), where an auditor appointed under subsection (1) has examined and audited the accounts and records of a licensed corporation or an associated entity of a licensed corporation, the Commission may, where it is of the opinion that it is appropriate to do so having regard to the conduct (whether before or after the appointment) of the licensed corporation or the associated entity (as the case may be) and of the person making the application pursuant to subsection (1) in respect of the appointment, by notice in writing direct the licensed corporation or the associated entity (as the case may be) or the person making the application to pay a specified amount, being—
 (a)in the case of the licensed corporation or the associated entity (as the case may be), the whole or a part of the costs and expenses of the examination and audit; or
 (b)in the case of the person making the application, the whole or a part of the costs and expenses of the examination and audit to the extent that they have been reasonably incurred for the purpose of ascertaining matters to which the application relates,
 within the specified time and in the specified manner.
 (9)The Commission shall not give a direction under subsection (8) unless it has given the licensed corporation, the associated entity or the person to which or to whom the direction is to be given a reasonable opportunity of being heard.
 (10)Where a licensed corporation, an associated entity of a licensed corporation or a person making an application pursuant to subsection (1) fails to comply with a direction of the Commission under subsection (8), the Commission may recover the specified amount referred to in the direction as a civil debt due to it.
 161.Auditors appointed under section 159 or 160 to report to Commission
 (1)An auditor appointed under section 159 or 160 shall make such interim reports to the Commission as it may require and shall, on the conclusion of the examination and audit which he is appointed to carry out, make a final report to the Commission.
 (2)A report referred to in subsection (1) shall be made within such time and in such manner as the Commission may direct.
 (3)The Commission may, if it considers appropriate, forward a copy of any report made to it under subsection (1) to the licensed corporation or the associated entity the accounts and records of which are the subject of the examination and audit referred to in the report.
 162.Powers of auditors appointed under section 159 or 160
 (1)An auditor appointed under section 159 or 160 to examine and audit the accounts and records of any licensed corporation and any of its associated entities, for the purpose of carrying out the examination and audit, may, in addition to any other action that the auditor may reasonably take for the purpose—
 (a)examine on oath or otherwise—
 (i)any officer, employee and agent of the licensed corporation or the associated entity (as the case may be); and
 (ii)any auditor appointed by the licensed corporation or the associated entity (as the case may be) under section 153 or, where the associated entity is an authorized financial institution, for the purposes of the Banking Ordinance (Cap. 155),
 in respect of any matter relating to the business of the licensed corporation or the associated entity (as the case may be) or to the client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be) and, for that purpose, administer oaths accordingly;
 (b)require any officer, employee and agent of the licensed corporation or the associated entity (as the case may be) to—
 (i)produce any accounts and records concerning any matter relating to the business of the licensed corporation or the associated entity (as the case may be) or to the client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be); and
 (ii)explain the contents of the accounts and records so produced;
 (c)require any auditor appointed by the licensed corporation or the associated entity (as the case may be) under section 153 or, where the associated entity is an authorized financial institution, for the purposes of the Banking Ordinance (Cap. 155) to—
 (i)produce any accounts and records held by him concerning any matter relating to the business of the licensed corporation or the associated entity (as the case may be) or to the client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be); and
 (ii)explain the contents of the accounts and records so produced;
 (d)require a recognized exchange company or recognized clearing house to—
 (i)produce any accounts and records kept by it, or information in its possession, concerning any matter relating to the business of the licensed corporation or the associated entity (as the case may be) or to the client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be); and
 (ii)explain the contents of the accounts and records, and the information, so produced;
 (e)require any person receiving or holding client assets of the licensed corporation on behalf of the licensed corporation or the associated entity (as the case may be) to—
 (i)produce any accounts and records kept by the person, or information in his possession, concerning any matter relating to the client assets; and
 (ii)explain the contents of the accounts and records, and the information, so produced;
 (f)employ any person he considers necessary to assist him in carrying out the examination and audit which he is appointed to carry out; and
 (g)for the purpose of carrying out the examination and audit which he is appointed to carry out, authorize in writing any person employed by him to do any act or thing referred to in this subsection (except to examine a person on oath under paragraph (a) or to exercise any power conferred by this paragraph).
 (2)If an auditor appointed under section 159 or 160, or a person authorized under subsection (1)(g), reasonably considers it necessary for the purpose of carrying out the examination and audit of the accounts and records of a licensed corporation and any of its associated entities which the auditor is appointed to carry out, the powers referred to in subsection (1)—
 (a)are exercisable in relation to any other business carried on by the licensed corporation in conjunction with any regulated activity for which it is licensed and to any business of any of its associated entities, in which case any reference to “any matter relating to the business of the licensed corporation or the associated entity (as the case may be)” in subsection (1)(a) to (g) shall be construed on the basis that it refers to any matter relating to such other business carried on by the licensed corporation or to such business of any of its associated entities; and
 (b)are exercisable in relation to a related corporation of the licensed corporation or any of its associated entities, in which case—
 (i)any reference to “any officer, employee and agent of the licensed corporation or the associated entity (as the case may be)” in subsection (1)(a) to (g) shall be construed on the basis that it refers to any officer, employee and agent of the related corporation;
 (ii)any reference to “any auditor appointed by the licensed corporation or the associated entity (as the case may be) under section 153 or, where the associated entity is an authorized financial institution, for the purposes of the Banking Ordinance (Cap. 155)” in subsection (1)(a) to (g) shall be construed on the basis that it refers to any auditor appointed by the related corporation, whether under this Ordinance or otherwise;
 (iii)any reference to “any matter relating to the business of the licensed corporation or the associated entity (as the case may be) or to the client assets of the licensed corporation received or held by the licensed corporation or the associated entity (as the case may be)” in subsection (1)(a) to (g) shall be construed on the basis that it refers, apart from the matter originally referred to, also to any matter relating to the business of the related corporation; and
 (iv)any reference to “any person receiving or holding client assets of the licensed corporation on behalf of the licensed corporation or the associated entity (as the case may be)” in subsection (1)(a) to (g) shall be construed on the basis that it refers to any person receiving or holding client assets of the licensed corporation on behalf of the related corporation.
 (3)A person who, without reasonable excuse, fails to comply with any requirement imposed on him (including the requirement to answer any question put to him) under this section (whether by an auditor appointed under section 159 or 160 or a person authorized under subsection (1)(g)) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (4)A person who—
 (a)in purported compliance with a requirement imposed on him (including the requirement to answer any question put to him) under this section (whether by an auditor appointed under section 159 or 160 or a person authorized under subsection (1)(g)), produces any accounts or records or gives an answer which is false or misleading in a material particular; and
 (b)knows that, or is reckless as to whether, the accounts or records or the answer is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (5)A person who, with intent to defraud—
 (a)fails to comply with any requirement imposed on him (including the requirement to answer any question put to him) under this section (whether by an auditor appointed under section 159 or 160 or a person authorized under subsection (1)(g)); or
 (b)in purported compliance with a requirement imposed on him (including the requirement to answer any question put to him) under this section (whether by an auditor appointed under section 159 or 160 or a person authorized under subsection (1)(g)), produces any accounts or records or gives an answer which is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (ii)on summary conviction to a fine of $500,000 and to imprisonment for 1 year.
 163.Offence to destroy, conceal, or alter accounts, records or documents, etc.
 (1)A person commits an offence if he, with intent to prevent, delay or obstruct the carrying out of any examination and audit which an auditor appointed under this Part is required to carry out—
 (a)deletes, destroys, mutilates, falsifies, conceals, alters or otherwise makes unavailable any accounts, records or documents related to such examination and audit, or aids or abets or conspires with another person to do so;
 (b)disposes or procures the disposal, in any manner and by any means, of any property related to such examination and audit, or aids or abets or conspires with another person to do so; or
 (c)leaves, or attempts to leave, Hong Kong.
 (2)A person who commits an offence under subsection (1) is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (b)on summary conviction to a fine of $500,000 and to imprisonment for 1 year.
 (3)If, in proceedings for an offence under subsection (1), it is proved that the accused person deleted, destroyed, mutilated, falsified, concealed or altered any accounts, records or documents related to any examination and audit which an auditor appointed under this Part is required to carry out, or aided or abetted or conspired with another person to do so, he shall, in the absence of evidence to the contrary, be presumed to have done so with intent to prevent, delay or obstruct the carrying out of such examination and audit.
 Division 6Miscellaneous
 164.Restriction on receiving or holding of client assets
 (1)No person shall receive or hold in Hong Kong client assets of an intermediary unless the person is—
 (a)the intermediary;
 (b)an associated entity of the intermediary; or
 (c)an excluded person.
 (2)A person who, without reasonable excuse, contravenes subsection (1) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (3)
 In this section, excluded person (豁除人士) means—
 (a)any authorized financial institution;
 (b)in the case of client collateral of any intermediary, any other intermediary or person with which or whom it is deposited, or to which or whom it is provided, in the circumstances referred to in paragraph (a)(A) or (B) or (b)(A) or (B) (as the case may be) of the definition of securities collateral or other collateral (as the case may be) in section 1 of Part 1 of Schedule 1;
 (c)any company or non-Hong Kong company that is approved under rules made pursuant to section 148(2)(d) as being suitable for the safe custody of client securities and collateral of intermediaries; or (Amended 30 of 2004 s. 3)
 (d)any person in Hong Kong that is specified under rules made pursuant to section 149(2)(f) as that with whom segregated accounts established for client money of licensed corporations and designated as trust accounts or client accounts are to be established and maintained.
 165.Associated entities
 (1)An associated entity of an intermediary shall within 7 business days after—
 (a)it becomes such an associated entity; or
 (b)it ceases to be such an associated entity,
 notify the Commission by notice in writing of that fact and such other particulars as are prescribed by rules made under section 397 for the purposes of this section.
 (2)Where there is any change in the particulars required to be provided by an associated entity of an intermediary under subsection (1), the associated entity shall within 7 business days thereafter notify the Commission by notice in writing of that fact and provide in the notice particulars of the change.
 (3)Where an associated entity of an intermediary, other than an authorized financial institution, receives or holds client assets of the intermediary, the associated entity shall not, unless authorized in writing by the Commission, conduct any business other than that of receiving or holding client assets, whether on behalf of the intermediary or otherwise.
 (4)An associated entity of an intermediary which, without reasonable excuse, contravenes subsection (1), (2) or (3) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (5)An associated entity of an intermediary which, with intent to defraud, contravenes subsection (1), (2) or (3) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (b)on summary conviction to a fine of $500,000 and to imprisonment for 1 year.
 (6)An associated entity of an intermediary which becomes aware that it does not comply with subsection (1), (2) or (3) shall within one business day thereafter notify the Commission by notice in writing of that fact and of the surrounding circumstances.
 (7)An associated entity of an intermediary which contravenes subsection (6) commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (8)An associated entity of an intermediary is not excused from complying with subsection (6) only on the ground that to do so might tend to incriminate it.
 (9)Notwithstanding anything in this section, the power of the Commission to make rules for the purposes of this section in respect of associated entities shall, where the associated entities are authorized financial institutions, be regarded as the power to make rules in respect of the associated entities only in relation to particulars relating to their businesses of receiving or holding client assets of intermediaries of which they are associated entities.
 166.Use of incriminating evidence in proceedings
 Notwithstanding any other provisions of this Ordinance, where a person—
 (a)is required under section 146(3) to notify the Commission of any matter;
 (b)is required under section 165(6) to notify the Commission of any matter; or
 (c)is required by rules made pursuant to section 148(2)(i), 149(2)(k), 151(2)(d) or 152(2)(f) to notify the Commission of any matter,
 and the notification might tend to incriminate the person, then the notification shall not be admissible in evidence against the person in criminal proceedings in a court of law other than those in which—
 (i)he is charged with an offence under Part V of the Crimes Ordinance (Cap. 200), or for perjury, in respect of the notification;
 (ii)in the case of paragraph (a), he is charged with an offence under section 146(15) in respect of the notification;
 (iii)in the case of paragraph (b), he is charged with an offence under section 165(7) in respect of the notification; or
 (iv)in the case of paragraph (c), he is charged with an offence under any rules made under section 148(4) or (5), 149(4) or (5), 151(5) or (6), 152(3) or (4) (as the case may be) in respect of a contravention taking place by reason of a failure to comply with the requirement described in paragraph (c) relating to the notification.
 Part VII
 Business Conduct, etc. of Intermediaries
 (Format changes—E.R. 2 of 2017)
 Division 1Interpretation
 167.Interpretation of Part VII
 In this Part, unless the context otherwise requires—
 client contract (客戶合約) means any contract or arrangement between an intermediary and another person, which contains terms on which the intermediary is to provide services the provision of which constitutes a regulated activity;
 representative (代表)—
 (a)in relation to a licensed corporation, means an individual—
 (i)who is licensed as a licensed representative for a regulated activity; and
 (ii)who carries on that regulated activity for the licensed corporation as a licensed corporation to which he is accredited; or
 (b)in relation to a registered institution, means an individual—
 (i)whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged by the registered institution in respect of a regulated activity; and
 (ii)who carries on that regulated activity for the registered institution.
 Division 2Business conduct
 168.Business conduct of intermediaries and their representatives
 (1)The Commission may make rules requiring intermediaries and their representatives to comply with such practices and standards, relating to the conduct of the intermediaries or the representatives (as the case may be) in carrying on the regulated activities for which the intermediaries are licensed or registered, as are specified in the rules.
 (2)Without limiting the generality of subsection (1) and without prejudice to section 398(7) and (8), the Commission may in the rules referred to in subsection (1)—
 (a)prohibit the use of misleading or deceptive advertisements by or on behalf of intermediaries, and impose conditions for the use of advertisements by or on behalf of intermediaries;
 (b)require specified terms and conditions to be included in client contracts and provide that the terms and conditions are, unless the Commission in relation to any particular term or condition otherwise directs, to be deemed to be of the essence of the client contracts in which they are included, whether or not a different intention appears from the provisions of such client contracts;
 (c)require an intermediary to provide to its client, upon entering into a client contract with the client, and thereafter from time to time upon request by the client, specified information concerning the business of the intermediary, and the identity and status of any person acting on behalf of the intermediary and with whom the client may have contact;
 (d)require an intermediary, and any representative of an intermediary, to take specified steps to ascertain, in relation to each of the clients of the intermediary, specified matters relating to his identity and his financial situation, investment experience and investment objectives relevant to the services to be provided by the intermediary;
 (e)require an intermediary, and any representative of an intermediary, to take specified steps before providing information or advice concerning financial products to any client of the intermediary;
 (f)require an intermediary, and any representative of an intermediary, when making any recommendation concerning any financial product to any client of the intermediary, to disclose to the client in the specified manner any interest the intermediary or the representative (as the case may be) may have in the financial product;
 (g)require an intermediary, and any representative of an intermediary, to take specified steps to ensure that disclosure is made to any client of the intermediary of financial risks in relation to any financial product the intermediary or the representative (as the case may be) recommends to the client;
 (h)require an intermediary, and any representative of an intermediary, to take specified steps to ensure that disclosure is made to any client of the intermediary of any commission or advantage the intermediary or the representative (as the case may be) receives or is to receive from any third party in connection with any financial product the intermediary or the representative (as the case may be) recommends to the client;
 (i)require an intermediary, and any representative of an intermediary, not to effect a transaction on behalf of any client of the intermediary in specified circumstances;
 (j)prohibit the use by an intermediary, or any representative of an intermediary, of information relating to the affairs of a client of the intermediary, except in specified circumstances and under specified conditions;
 (k)require an intermediary, and any representative of an intermediary, to take specified steps in cases of conflict arising between any of their interests and those of a client of the intermediary;
 (l)prohibit the receipt by an intermediary of any property or services from another intermediary in consideration of directing business to that other intermediary, except in specified circumstances and under specified conditions;
 (m)prohibit the dealing by any representative of an intermediary for his own account in securities or futures contracts, except in specified circumstances and under specified conditions;
 (n)require an intermediary, and any representative of an intermediary, to take specified steps to introduce and implement procedures to discourage and identify any money laundering activities;
 (o)provide for any other matter relating to the practices and standards relating to conduct in carrying on the regulated activities for which intermediaries are licensed or registered.
 (3)Notwithstanding anything in this section, the Commission shall not exercise any of its powers under this section to make rules to specify any terms and conditions for the purposes of any requirement referred to in subsection (2)(b) unless it is satisfied that the specification of the terms and conditions is for the better furtherance of any of its regulatory objectives or the better performance of any of its functions.
 (4)Rules made under this section may provide that an intermediary, or a representative of an intermediary, that, without reasonable excuse, contravenes any specified provision of the rules that applies to it or him commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $200,000 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 6 and a term of imprisonment of 6 months.
 169.Codes for business conduct of intermediaries and their representatives
 (1)Without prejudice to the power of the Commission to make rules under section 168, the Commission may publish, in the Gazette and in any other manner it considers appropriate, codes of conduct for the purpose of giving guidance relating to the practices and standards with which intermediaries and their representatives are ordinarily expected to comply in carrying on the regulated activities for which the intermediaries are licensed or registered.
 (2)Without limiting the generality of subsection (1), any code of conduct referred to in that subsection may, in giving guidance referred to in that subsection, refer to obligations to observe—
 (a)any other codes or requirements issued or imposed otherwise than by the Commission;
 (b)continuing obligations, including any such obligations—
 (i)in the case of an intermediary, to provide for the continuous training of its representatives; or
 (ii)in the case of a representative of an intermediary, to undergo continuous training;
 (c)practices and standards concerning any of the matters described in section 168(2).
 (3)The Commission may from time to time amend the whole or any part of any code of conduct published under this section in a manner consistent with the power to publish the code of conduct under this section, and—
 (a)the other provisions of this section apply, with necessary modifications, to such amendments to the code as they apply to the code; and
 (b)any reference in this or any other Ordinance to the code (however expressed) shall, unless the context otherwise requires, be construed as a reference to the code as so amended.
 (4)A failure on the part of an intermediary, or a representative of an intermediary, to comply with the provisions set out in any code of conduct published under this section that apply to it or him shall not by itself render it or him liable to any judicial or other proceedings, but may be taken into account in considering, for the purposes of any provision of this Ordinance—
 (a)in the case of an intermediary, whether it is a fit and proper person to be or to remain licensed or registered;
 (b)in the case of a representative of an intermediary that is a licensed corporation, whether he is a fit and proper person to be or to remain licensed as a representative; or
 (c)in the case of a representative of an intermediary that is a registered institution, whether he is a fit and proper person to be or to remain a person whose name is entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged by a registered institution in respect of a regulated activity,
 and in any proceedings under this Ordinance before any court the code shall be admissible in evidence, and if any provision set out in the code appears to the court to be relevant to any question arising in the proceedings it shall be taken into account in determining that question.
 (5)Any code of conduct published under this section—
 (a)may be of general or special application and, without limiting the generality of the foregoing, may be made so as to apply, or so as not to apply—
 (i)to a specified extent in relation to any specified person or to members of a specified class of persons;
 (ii)in specified circumstances;
 (b)may make different provisions for different circumstances and provide for different cases or classes of cases.
 (6)Any code of conduct published under this section is not subsidiary legislation.
 Division 3Restriction on short selling, etc.
 170.Short selling restricted
 (1)Subject to subsections (2) and (3), a person shall not sell securities at or through a recognized stock market unless at the time he sells them—
 (a)he has or, where he is selling as an agent, his principal has; or
 (b)he believes and has reasonable grounds to believe that he has or, where he is selling as an agent, that his principal has,
 a presently exercisable and unconditional right to vest the securities in the purchaser of them.
 (2)For the purposes of subsection (1)—
 (a)a person shall be regarded as selling securities if he—
 (i)purports to sell the securities;
 (ii)offers to sell the securities;
 (iii)holds himself out as being entitled to sell the securities; or
 (iv)instructs any representative of an intermediary that carries on Type 1 regulated activity for the intermediary, to sell the securities;
 (b)a person who, at a particular time, has a presently exercisable and unconditional right to have securities vested in him or in accordance with his directions shall be regarded as having at that time a presently exercisable and unconditional right to vest the securities in a purchaser of them;
 (c)a right of a person to vest securities in a purchaser of them shall not be regarded as not unconditional by reason only of the fact that the securities are charged or pledged in favour of some other person to secure the repayment of money.
 (3)Subsection (1) does not apply to—
 (a)a person who acts in good faith, believing and having reasonable grounds to believe that he has a right, title, or interest to or in the securities which he sells within the meaning of subsection (1);
 (b)a person who, as a representative of an intermediary that carries on Type 1 regulated activity for the intermediary, acts in good faith on behalf of some other person, believing and having reasonable grounds to believe that such other person has a right, title, or interest to or in the securities which he sells within the meaning of subsection (1) on behalf of such other person;
 (c)a sale of securities by an exchange participant acting as a principal, when he acts in the course of his business of dealing in odd lots of securities, in accordance with the rules of the recognized exchange company which operates a stock market, being a sale effected solely for the purpose of—
 (i)accepting an offer to purchase an odd lot of securities; or
 (ii)disposing of an odd lot of securities, by means of the sale of one board lot of those securities;
 (d)a sale of securities effected pursuant to a transaction in an options contract traded on a recognized stock market;
 (e)a sale of securities falling within a class of transactions prescribed by rules made under section 397 for the purposes of this paragraph.
 (4)A person who contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 6 and to imprisonment for 2 years.
 171.Requirements to confirm short selling order
 (1)A person, where he is selling as a principal, shall not convey a short selling order at or through a recognized stock market unless he provides to his agent an assurance, in the form of a document, that—
 (a)he has a presently exercisable and unconditional right to vest the securities to which the order relates in the purchaser of them; and
 (b)where the short selling order is such order by virtue of paragraph (a)(i) or (v) of the definition of short selling order in section 1 of Part 1 of Schedule 1, the counterparty or the other person (as the case may be) referred to in such paragraph has the securities to which the order relates available to lend or deliver to him.
 (2)A person to which subsection (1) applies shall provide to his agent such information (if any), in the form of a document and within such time, as is prescribed by rules made under section 397 for the purposes of this subsection.
 (3)An exchange participant, where he is selling as a principal, shall not convey a short selling order which is such order by virtue of paragraph (a)(i) or (v) of the definition of short selling order in section 1 of Part 1 of Schedule 1 at or through a recognized stock market unless he has received an assurance, in the form of a document, from the counterparty or the other person (as the case may be) referred to in such paragraph that the counterparty or the other person (as the case may be) has the securities to which the order relates available to lend or deliver to him.
 (4)An exchange participant to which subsection (3) applies shall collect from the counterparty or the other person referred to in that subsection such information (if any), in the form of a document and within such time, as is prescribed by rules made under section 397 for the purposes of this subsection.
 (5)A person, where he is selling as an agent, shall not convey or accept an order to sell securities which is a short selling order at or through a recognized stock market unless he has received from his principal, or the other person for whose benefit or on whose behalf the order is made, an assurance, in the form of a document, that—
 (a)his principal or that other person (as the case may be) has a presently exercisable and unconditional right to vest the securities to which the order relates in the purchaser of them; and
 (b)where the short selling order is such order by virtue of paragraph (a)(i) or (v) of the definition of short selling order in section 1 of Part 1 of Schedule 1, the counterparty or the other person (as the case may be) referred to in such paragraph has the securities to which the order relates available to lend or deliver to him.
 (6)A person to which subsection (5) applies shall collect from his principal, or the other person referred to in that subsection, such information (if any), in the form of a document and within such time, as is prescribed by rules made under section 397 for the purposes of this subsection.
 (7)For the purposes of subsections (1), (3) and (5), a person who conveys or accepts an order on behalf of his clients or beneficiaries shall be regarded as selling as a principal if—
 (a)he has full discretion to sell the securities to which the order relates; and
 (b)his conveyance or acceptance is not in accordance with any instruction from his clients or beneficiaries.
 (8)An agent or exchange participant who receives or collects an assurance or information by virtue of or under subsection (1), (2), (3), (4), (5) or (6) shall—
 (a)subject to paragraph (b), retain the document in which it is contained for not less than one year from the date on which it is received; and
 (b)upon request made at any time within that year by the Commission, give the Commission access to the document, and produce to the Commission, within the time and at the place specified by the Commission, the document.
 (9)An assurance or information referred to in subsection (1), (2), (3), (4), (5) or (6) shall in any proceedings under this Ordinance before any court be admissible as prima facie evidence of—
 (a)in the case of an assurance, the matters specified in subsection (1), (3) or (5) (as the case may be) as that to which the assurance relates; or
 (b)in the case of information, the matters (if any) specified in the rules referred to in subsection (2), (4) or (6) (as the case may be) as that to which the information relates.
 (10)Subject to subsection (11), a person who contravenes subsection (1), (3) or (5) commits an offence and is liable on conviction to a fine at level 5 and to imprisonment for 1 year.
 (11)It is a defence to a charge for an offence under subsection (10) for the person charged to prove that when he conveyed or, in the case of a contravention of subsection (5), conveyed or accepted the order concerned, he—
 (a)believed and had reasonable grounds to believe that the order was not a short selling order; or
 (b)did not know that the order was a short selling order.
 (12)A person who, without reasonable excuse, contravenes subsection (2), (4), (6) or (8) commits an offence and is liable on conviction to a fine at level 5 and to imprisonment for 1 year.
 172.Requirements to disclose short sales
 (1)An exchange participant or exchange participant’s representative who knows or is informed that an order to sell securities is a short selling order shall—
 (a)when passing the order to any other person with a view that the other person shall input the order into the trading system of a recognized stock market, inform that other person that the order is a short selling order; and
 (b)when inputting the order into the trading system of a recognized stock market, indicate such matters as may be required, under the rules of the recognized exchange company by which the recognized stock market is operated, to show that the order is a short selling order.
 (2)Subject to subsection (3), a person who, without reasonable excuse, contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 5 and to imprisonment for 1 year.
 (3)A person shall not be regarded as committing an offence under subsection (2) if he contravenes subsection (1) by reason only of his inadvertence, carelessness or negligence.
 (4)In this section, exchange participant’s representative (交易所參與者代表) means a licensed representative accredited to a licensed corporation that is an exchange participant of a recognized exchange company which operates a recognized stock market.
 Division 4Other requirements
 173.Requirements for options trading
 (1)The Commission may make rules—
 (a)prohibiting Type 1 intermediaries from—
 (i)transacting in Hong Kong;
 (ii)holding themselves out in Hong Kong as being prepared to transact,
 except as provided in the rules, any dealing whereby directly or indirectly they confer on any person an option to sell to or purchase from them, or any other person on their behalf, any listed securities;
 (b)prohibiting Type 2 intermediaries from—
 (i)transacting in Hong Kong;
 (ii)holding themselves out in Hong Kong as being prepared to transact,
 except as provided in the rules, any dealing whereby directly or indirectly they confer on any person an option to sell to or purchase from them, or any other person on their behalf, any futures contracts traded on a recognized futures market.
 (2)Rules made under this section may provide that a Type 1 intermediary, or a Type 2 intermediary, which, without reasonable excuse, contravenes any specified provision of the rules that applies to it commits an offence and is liable to a specified penalty not exceeding—
 (a)on conviction on indictment a fine of $200,000 and a term of imprisonment of 2 years;
 (b)on summary conviction a fine at level 6 and a term of imprisonment of 6 months.
 (3)In this section—
 Type 1 intermediary (第1類中介人) means an intermediary licensed or registered for Type 1 regulated activity;
 Type 2 intermediary (第2類中介人) means an intermediary licensed or registered for Type 2 regulated activity.
 174.Certain agreements not to be made during unsolicited calls
 (1)Subject to subsections (2) and (3), an intermediary, or a representative of an intermediary, shall not, as principal or agent, during or as a consequence of an unsolicited call made, whether in Hong Kong or elsewhere, by it or him—
 (a)make or offer to make with another person—
 (i)an agreement for that other person to sell or purchase, or with a view to having that other person sell or purchase, any securities, futures contract or leveraged foreign exchange contract;
 (ii)an agreement to provide, or with a view to providing, to that other person securities margin financing; or
 (iii)an agreement the purpose or effect, or pretended purpose or effect, of which is to provide, whether conditionally or unconditionally, to that other person a profit, income or other returns—
 (A)from any securities, futures contract or leveraged foreign exchange contract; or
 (B)calculated by reference to changes in the value of any securities, futures contract or leveraged foreign exchange contract; or
 (b)induce or attempt to induce another person to enter into an agreement referred to in paragraph (a),
 whether or not in making the unsolicited call it or he does any other act or thing.
 (2)An intermediary, or a representative of an intermediary, shall not be regarded as contravening subsection (1) by reason only that it or he—
 (a)makes a call on another person who is a solicitor or certified public accountant acting in his professional capacity, or is a licensed person, registered institution, money lender or professional investor, or its or his existing client; and (Amended 23 of 2004 s. 56)
 (b)whether as principal or agent, makes or offers to make with that other person an agreement referred to in subsection (1)(a), or induces or attempts to induce that other person to enter into such an agreement.
 (3)This section does not apply to—
 (a)agreements relating to securities, futures contracts or leveraged foreign exchange contracts or to securities margin financing which are of a class prescribed by rules made under section 397 for the purposes of this paragraph;
 (b)calls made by a person who is of a class prescribed by rules made under section 397 for the purposes of this paragraph;
 (c)calls made on a person who is of a class prescribed by rules made under section 397 for the purposes of this paragraph;
 (d)calls which are of a class prescribed by rules made under section 397 for the purposes of this paragraph.
 (4)Without limiting the generality of the powers of the Commission to make rules for the purposes of subsection (3)(d), the Commission may in the rules prescribe that calls made by an authorized financial institution in compliance with such requirements under any guidelines published under section 7(3) of the Banking Ordinance (Cap. 155) that apply to it shall be within a class of calls to which this section does not apply.
 (5)An intermediary, or a representative of an intermediary, that contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 5.
 (6)Where a person on whom an unsolicited call is made enters into an agreement with another person in consequence of a contravention of subsection (1), the person on whom the unsolicited call is so made may, subject to the rights of a subsequent purchaser in good faith for value, rescind the agreement, by giving notice in writing to that effect to that other person, within 28 days after the day on which the agreement is entered into or 7 days after the day on which he becomes aware of the contravention, whichever is the earlier.
 (7)In this section—
 call (造訪) means a visit in person, or a communication by any means, whether mechanically, electronically, magnetically, optically, manually or by any other medium, or by way of production or transmission of light, image or sound or any other medium;
 existing client (原有客戶), in relation to an intermediary or a representative of an intermediary, means a person—
 (a)who has entered into a client contract with the intermediary at any time during the period of 3 years immediately preceding the day on which the call is made, and remains a party to the client contract when the call is made; or
 (b)for whom the intermediary has provided a service, the provision of which constitutes a regulated activity, at any time during the period of 3 years immediately preceding the day on which the call is made;
 futures contract (期貨合約) means—
 (a)a futures contract as defined in section 1 of Part 1 of Schedule 1;
 (b)a futures contract, or a contract represented as being a futures contract, in respect of an item, whether or not capable of being delivered, which is prescribed by rules made under section 397 for the purposes of this definition;
 money lender (放債人) has the meaning assigned to it by section 2(1) of the Money Lenders Ordinance (Cap. 163);
 unsolicited call (未獲邀約的造訪) means any call made otherwise than at the express invitation of the person called upon, and for the purposes of this definition, the provision by a person of his contact details, including an address, telephone or facsimile number, or electronic mail address, does not by itself constitute an express invitation to call that person.
 175.Requirements for offers by intermediaries or representatives for Type 1, Type 4 or Type 6 regulated activity
 (1)Subject to subsection (5), a Type 1 intermediary or representative, a Type 4 intermediary or representative or a Type 6 intermediary or representative shall not communicate an offer to acquire or dispose of any securities of, or issued by, a body unless—
 (a)the offer—
 (i)is contained in a written document in an official language; or
 (ii)if communicated otherwise than in the form of a written document satisfying the requirement of subparagraph (i), is reduced to a written document in an official language and delivered to the person or persons to whom it was made not later than 24 hours after the communication;
 (b)the offer—
 (i)contains a description of the securities sufficient to enable them to be identified;
 (ii)specifies the terms of the offer, including where appropriate the amount of consideration proposed to be paid for the securities to be acquired pursuant to the offer;
 (iii)where a dividend has been declared or recommended in respect of the securities, or it is anticipated that a dividend may be so declared or recommended before the transfer of the securities, states whether the securities are to be transferred with or without the dividend;
 (iv)specifies—
 (A)whether, in the event of a person accepting the offer, the offeror will pay any stamp duty which the person so accepting the offer will become liable to pay in respect of the transaction under the Stamp Duty Ordinance (Cap. 117); and
 (B)if the offeror will not so pay the stamp duty, the rate of the stamp duty that the person so accepting the offer will become liable to pay in respect of the transaction under that Ordinance;
 (v)specifies whether, in the event of a person accepting the offer, any fees will be payable by that person to—
 (A)where the Type 1 intermediary or representative, the Type 4 intermediary or representative or the Type 6 intermediary or representative (as the case may be) is regarded as such by virtue of being an intermediary, the Type 1 intermediary or representative, the Type 4 intermediary or representative or the Type 6 intermediary or representative (as the case may be); or
 (B)where the Type 1 intermediary or representative, the Type 4 intermediary or representative or the Type 6 intermediary or representative (as the case may be) is regarded as such by virtue of being a representative of an intermediary, the intermediary;
 (vi)if contained in a written document referred to in paragraph (a)(i)—
 (A)specifies the name and address of the offeror and, where any person is making the offer on behalf of the offeror, the name and address of that person;
 (B)bears a date which is not more than 3 days before the date on which the offer is communicated;
 (C)where the offer is for the acquisition of securities, satisfies the requirements of Part 1 of Schedule 7;
 (D)where the offer is for the disposal of securities, satisfies the requirements of Part 2 of Schedule 7; and
 (E)where a report of an expert in connection with the offer is included in or annexed to the offer, contains a statement to the effect that the expert has consented to the inclusion or annexure, and has not, before the communication of the offer, withdrawn that consent; and
 (vii)if communicated in the manner described in paragraph (a)(ii), where there is a report of an expert in connection with the offer, specifies the place at which the report is available for inspection, and contains a statement to the effect that the expert has consented to the contents of the report, and has not, before the communication of the offer, withdrawn that consent; and
 (c)where the offer is contained in a written document referred to in paragraph (a)(i) or is reduced to a written document referred to in paragraph (a)(ii) but the written document is in only one official language, the written document includes a translation, in the other official language, of all the particulars required in respect of the offer under paragraph (b), except where the Commission has previously agreed that the requirements of this paragraph may be dispensed with in any particular case.
 (2)Where an offer contained in a written document referred to in subsection (1)(a)(i) is to contain a statement referred to in subsection (1)(b)(vi)(E) regarding the consent of an expert, the offer shall not be communicated unless the expert has given, and has not before the communication of the offer withdrawn, his consent to the offer being communicated with the inclusion of the statement in the form and context in which it is included in the written document.
 (3)Where an offer communicated in the manner described in subsection (1)(a)(ii) is to contain a statement referred to in subsection (1)(b)(vii) regarding the consent of an expert, the offer shall not be communicated unless the expert has given, and has not before the communication of the offer withdrawn, his consent to the offer being communicated with a reference to the statement in the form and context in which it is referred to.
 (4)Any Type 1 intermediary or representative, Type 4 intermediary or representative or Type 6 intermediary or representative who communicates an offer to acquire or dispose of any securities without having complied with subsections (1), (2) and (3) commits an offence and is liable on conviction to a fine at level 6 and, in the case of a continuing offence, to a further fine of $20,000 for every day during which the offence continues.
 (5)This section does not apply to—
 (a)an offer regulated by, and made in accordance with, the requirements of—
 (i)the rules made under section 23 or 36 governing the listing of securities;
 (ii)the code published under section 399(2)(a); or
 (iii)Part II of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) or, in the case of a corporation incorporated outside Hong Kong, Part XII of that Ordinance; (Amended 28 of 2012 ss. 912 & 920)
 (aa)an offer—
 (i)specified in Part 1 of the Seventeenth Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) as read with the other Parts of that Schedule; and (Amended 28 of 2012 ss. 912 & 920)
 (ii)specified by the Commission, by notice published in the Gazette, as an offer to which this section does not apply; (Added 30 of 2004 s. 3)
 (b)an offer communicated to persons who already hold securities of, or issued by, a body, for those persons to acquire securities of, or issued by, the body;
 (c)an offer communicated by a Type 1 intermediary or representative, a Type 4 intermediary or representative or a Type 6 intermediary or representative if the offer is made to a person with whom, or on whose behalf—
 (i)where the Type 1 intermediary or representative, the Type 4 intermediary or representative or the Type 6 intermediary or representative (as the case may be) is regarded as such by virtue of being an intermediary, the Type 1 intermediary or representative, the Type 4 intermediary or representative or the Type 6 intermediary or representative (as the case may be); or
 (ii)where the Type 1 intermediary or representative, the Type 4 intermediary or representative or the Type 6 intermediary or representative (as the case may be) is regarded as such by virtue of being a representative of an intermediary, the intermediary,
 has transacted the sale or purchase of securities on at least 3 occasions during the period of 3 years immediately preceding the date of the offer;
 (d)an offer made to—
 (i)a professional investor;
 (ii)a solicitor or certified public accountant acting in his professional capacity; or (Amended 23 of 2004 s. 56)
 (iii)any other person who is of a class prescribed by rules made under section 397 for the purposes of this paragraph;
 (e)an offer communicated by an exchange participant in the ordinary course of trading on a recognized stock market;
 (f)an offer communicated by a person who is of a class prescribed by rules made under section 397 for the purposes of this paragraph;
 (g)an offer which is of a class prescribed by rules made under section 397 for the purposes of this paragraph.
 (6)Where—
 (a)a person has accepted an offer to acquire or dispose of any securities of, or issued by, a body which is an offer to which this section applies; and
 (b)the offer has been communicated without subsections (1), (2) and (3) having been complied with in a material particular,
 that person may, subject to the rights of a subsequent purchaser of the securities in good faith for value, rescind the acceptance, by giving notice in writing to that effect to the offeror, within 28 days after the date of acceptance or 7 days after the day on which he becomes aware of the matter described in paragraph (b), whichever is the earlier.
 (7)For the purposes of this section—
 (a)where a Type 1 intermediary or representative, a Type 4 intermediary or representative or a Type 6 intermediary or representative communicates an invitation to a person to acquire or dispose of any securities of, or issued by, a body, the invitation shall be deemed to be an offer, and a reference in this section to acceptance shall be construed accordingly;
 (b)an offer to acquire or dispose of a right to acquire or dispose of securities or an interest in securities shall be deemed to be an offer to acquire or dispose of securities, and a reference in this section to a person who holds securities includes a person who holds a right to acquire securities or an interest in securities;
 (c)an offer to acquire or dispose of securities in consideration or part consideration for other securities shall be deemed to be both an offer to acquire and an offer to dispose of securities.
 (8)In this section, a reference to securities of a body shall, unless the context otherwise requires, be construed as a reference to securities (having the meaning under section 1 of Part 1 of Schedule 1) which are—
 (a)issued, made available or granted by the body; or
 (b)proposed to be issued, made available or granted by the body.
 (8A)A notice published under subsection (5)(aa)(ii) is not subsidiary legislation. (Added 30 of 2004 s. 3)
 (9)In this section—
 body (團體) means a corporation, a multilateral agency, or a government or municipal government authority;
 expert (專家) includes an engineer, valuer, certified public accountant, solicitor, and any other person whose profession gives authority to a statement made by him; (Amended 23 of 2004 s. 56)
 Type 1 intermediary or representative (第1類中介人或代表) means—
 (a)an intermediary licensed or registered for Type 1 regulated activity; or
 (b)its representative that carries on Type 1 regulated activity for it;
 Type 4 intermediary or representative (第4類中介人或代表) means—
 (a)an intermediary licensed or registered for Type 4 regulated activity; or
 (b)its representative that carries on Type 4 regulated activity for it;
 Type 6 intermediary or representative (第6類中介人或代表) means—
 (a)an intermediary licensed or registered for Type 6 regulated activity; or
 (b)its representative that carries on Type 6 regulated activity for it;
 written document (書面文件) means any document or similar material, or any other medium (whether effected as such mechanically, electronically, magnetically, optically, manually or by any other means), by which words are represented in a visible form.
 176.Certain representations prohibited
 (1)Subject to subsection (2), an intermediary, or a representative of an intermediary, shall not represent, or permit any other person to represent, in any manner and whether expressly or by implication, that its or his abilities or qualifications have been endorsed or warranted by the Government or the Commission.
 (2)A statement to the effect that a person is licensed or registered under this Ordinance does not by itself constitute a contravention of subsection (1).
 (3)An intermediary, or a representative of an intermediary, that, without reasonable excuse, contravenes subsection (1) commits an offence and is liable on conviction to a fine at level 5.
 Division 5Miscellaneous
 177.Amendment of Schedule 7
 The Chief Executive in Council may, by order published in the Gazette, amend Schedule 7.
 Part VIII
 Supervision and Investigations
 (Format changes—E.R. 2 of 2012)
 Division 1Interpretation
 178.Interpretation of Part VIII
 In this Part, unless the context otherwise requires—
 audit working papers (審計工作材料) means—
 (a)any record or document prepared by or on behalf of an auditor; and
 (b)any record or document obtained and retained by or on behalf of an auditor,
 for or in connection with the performance of any of his functions relating to the conduct of any audit of the accounts of a corporation;
 investigator (調查員) means (except in the definition of MA investigator in this section) a person directed or appointed to investigate any matter under section 182(1); (Amended 6 of 2014 s. 15)
 MA investigator (金管局調查員) means a person directed or appointed to investigate any matter under section 184A; (Added 6 of 2014 s. 15)
 person under investigation (受調查人) means—
 (a)in section 183, a person in relation to whom an investigator is directed or appointed to investigate any matter under section 182(1); and
 (b)in section 184B, a person in relation to whom an MA investigator is directed or appointed to investigate any matter under section 184A(1). (Replaced 6 of 2014 s. 15)
 Division 2Powers to require information, etc.
 179.Power to require production of records and documents concerning listed corporations, etc.
 (1)Where, in relation to a corporation which is or was listed—
 (a)it appears to the Commission that there are circumstances suggesting that at any relevant time the business of the corporation has been conducted—
 (i)with intent to defraud its creditors, or the creditors of any other person;
 (ii)for any fraudulent or unlawful purpose; or
 (iii)in a manner oppressive to its members or any part of its members;
 (b)it appears to the Commission that there are circumstances suggesting that the corporation was formed for any fraudulent or unlawful purpose;
 (c)it appears to the Commission that there are circumstances suggesting that persons concerned in the process by which the corporation became listed (including that for making the securities of the corporation available to the public in the course of such process) have engaged, in relation to such process, in defalcation, fraud, misfeasance or other misconduct;
 (d)it appears to the Commission that there are circumstances suggesting that at any relevant time persons involved in the management of the affairs of the corporation have engaged, in relation to such management, in defalcation, fraud, misfeasance or other misconduct towards it or its members or any part of its members;
 (e)it appears to the Commission that there are circumstances suggesting that at any relevant time members of the corporation or any part of its members have not been given all the information with respect to its affairs that they might reasonably expect; or
 (f)a matter in respect of the investigation of which the Commission decides to provide assistance under section 186(1) or (2) relates to the corporation and is, in the opinion of the Commission, of a nature similar to the matter described in paragraph (a), (b), (c), (d) or (e) as being suggested by the circumstances referred to in such paragraph, (Amended 19 of 2015 s. 21)
 an authorized person may, subject to subsections (5) to (10), give a direction to—
 (i)the corporation;
 (ii)a corporation that is, or was at the material time, a related corporation of the corporation;
 (iii)an authorized financial institution, other than the corporation or a corporation described in paragraph (ii);
 (iv)an auditor, other than the corporation or a corporation described in paragraph (ii);
 (v)any other person,
 requiring the production, within the time and at the place specified in the direction, of any record and document specified in the direction.
 (2)A power under this section to require the production of any record or document by any person includes the power—
 (a)if the record or document is produced—
 (i)to make copies or otherwise record details of the record or document; and
 (ii)to require—
 (A)the person;
 (B)in the case of a corporation, any person who is a present or past officer of the corporation, or is or was at any time employed by the corporation,
 to provide or make any explanation or statement in respect of the record or document (including, in so far as applicable, a description of the circumstances under which it was prepared or created, details of all instructions given or received in connection with it, and an explanation of the reasons for the making of entries contained in it or the omission of entries from it); or
 (b)if the record or document is not produced, to require—
 (i)the person;
 (ii)in the case of a corporation, any person who is a present or past officer of the corporation, or is or was at any time employed by the corporation,
 to state where it is.
 (3)An authorized person may in writing require the person providing or making an explanation or statement under this section to verify within a reasonable period specified in the requirement the explanation or statement by statutory declaration, which may be taken by the authorized person.
 (4)If a person does not provide or make an explanation or statement in accordance with a requirement under this section for the reason that the explanation or statement was not within his knowledge or in his possession, an authorized person may in writing require the person to verify within a reasonable period specified in the requirement by statutory declaration, which may be taken by the authorized person, that he was unable to comply or fully comply (as the case may be) with the requirement for that reason.
 (5)An authorized person shall not give any direction under subsection (1)(i) or (ii) to require the production of any record or document unless the authorized person has reasonable cause to believe that the record or document relates to the affairs of the corporation to which the direction is to be given or a corporation of which such corporation is, or was at the material time, a related corporation.
 (6)An authorized person shall not give any direction to an authorized financial institution under subsection (1)(iii) to require the production of any record or document unless the authorized person has reasonable cause to believe, and the Commission certifies in writing that the authorized person has reasonable cause to believe, that—
 (a)the authorized financial institution is in possession of any record or document relating to the affairs of a corporation to which any direction has been or may be given under subsection (1)(i) or (ii); and
 (b)the record or document required to be produced under the direction—
 (i)relates to the affairs of such corporation or to a transaction with such corporation; and
 (ii)is relevant to the consideration of whether there has been the occurrence of—
 (A)where subsection (1)(a), (b), (c), (d) or (e) applies, the matter described in such subsection as being suggested by the circumstances referred to in such subsection; or
 (B)where subsection (1)(f) applies, the matter in respect of the investigation of which the Commission decides to provide assistance under section 186(1) or (2). (Amended 19 of 2015 s. 21)
 (7)An authorized person shall not give any direction to an auditor under subsection (1)(iv) to require the production of any record or document unless the authorized person has reasonable cause to believe, and the Commission certifies in writing that the authorized person has reasonable cause to believe, that—
 (a)the auditor is in possession of any record or document, which is in the nature of audit working papers, relating to the affairs of a corporation to which any direction has been or may be given under subsection (1)(i) or (ii); and
 (b)the record or document required to be produced under the direction—
 (i)relates to the affairs of such corporation; and
 (ii)is relevant to the consideration of whether there has been the occurrence of—
 (A)where subsection (1)(a), (b), (c), (d) or (e) applies, the matter described in such subsection as being suggested by the circumstances referred to in such subsection; or
 (B)where subsection (1)(f) applies, the matter in respect of the investigation of which the Commission decides to provide assistance under section 186(1) or (2). (Amended 19 of 2015 s. 21)
 (8)An authorized person shall not give any direction to a person under subsection (1)(v) to require the production of any record or document unless the authorized person has reasonable cause to believe, and the Commission certifies in writing that the authorized person has reasonable cause to believe, that—
 (a)the person has dealt or has had dealings, directly or indirectly, with, or is otherwise in possession of any record or document relating to the affairs of, a corporation to which any direction has been or may be given under subsection (1)(i) or (ii); and
 (b)the record or document required to be produced under the direction—
 (i)relates to the affairs of such corporation or to a transaction with such corporation;
 (ii)is relevant to the consideration of whether there has been the occurrence of—
 (A)where subsection (1)(a), (b), (c), (d) or (e) applies, the matter described in such subsection as being suggested by the circumstances referred to in such subsection; or
 (B)where subsection (1)(f) applies, the matter in respect of the investigation of which the Commission decides to provide assistance under section 186(1) or (2); and (Amended 19 of 2015 s. 21)
 (iii)cannot be obtained by giving a direction to any other person under subsection (1)(i), (ii), (iii) or (iv).
 (9)The power of an authorized person to give any direction under subsection (1) (other than subsection (1)(iii)) to any corporation which is an authorized financial institution may be exercised only in respect of—
 (a)subsection (1)(e); or
 (b)subsection (1)(f), if, and only if, the matter in respect of the investigation of which the Commission decides to provide assistance under section 186(1) or (2) is, in the opinion of the Commission, of a nature similar to the matter described in subsection (1)(e) as being suggested by the circumstances referred to in that subsection (1)(e). (Amended 19 of 2015 s. 21)
 (10)Before an authorized person gives any direction under subsection (1) (other than subsection (1)(iii)) to any corporation—
 (a)where the corporation is an authorized financial institution or a corporation which, to the knowledge of the authorized person, is a controller of an authorized financial institution, or has as its controller an authorized financial institution, or has a controller that is also a controller of an authorized financial institution, the authorized person shall consult the Monetary Authority; or
 (b)where the corporation is an insurer authorized under the Insurance Ordinance (Cap. 41), the authorized person shall consult the Insurance Authority. (Amended 12 of 2015 s. 139)
 (11)The Commission may authorize in writing any person as an authorized person for the purposes of this section.
 (12)The Commission shall furnish an authorized person with a copy of his authorization, and the authorized person, before exercising any power under this section, shall produce a copy of the authorization to the person in respect of whom the power is exercised for inspection.
 (13)A person who, without reasonable excuse, fails to comply with a requirement imposed on him by an authorized person under this section commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (14)A person who—
 (a)in purported compliance with a requirement imposed on him by an authorized person under this section, produces any record or document or provides or makes an explanation or statement which is false or misleading in a material particular; and
 (b)knows that, or is reckless as to whether, the record or document or the explanation or statement is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (15)A person who—
 (a)with intent to defraud—
 (i)fails to comply with a requirement imposed on him by an authorized person under this section; or
 (ii)in purported compliance with a requirement imposed on him by an authorized person under this section, produces any record or document or provides or makes an explanation or statement which is false or misleading in a material particular; or
 (b)being an officer or employee of a corporation, with intent to defraud causes or allows the corporation to—
 (i)fail to comply with a requirement imposed on it by an authorized person under this section; or
 (ii)in purported compliance with a requirement imposed on it by an authorized person under this section, produce any record or document or provide or make an explanation or statement which is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (16)A person is not excused from complying with a requirement imposed on the person by an authorized person under this section only on the ground that to do so might tend to incriminate the person.
 (17)In this section—
 authorized person (獲授權人) means a person authorized under subsection (11);
 controller (控制人) means a person who is an indirect controller or a majority shareholder controller as defined in section 2(1) of the Banking Ordinance (Cap. 155);
 material time (關鍵時間) means—
 (a)where subsection (1)(a), (b), (c), (d) or (e) applies, the time at which the matter described in such subsection as being suggested by the circumstances referred to in such subsection appears to the Commission as occurring; or
 (b)where subsection (1)(f) applies, the time at which the matter in respect of the investigation of which the Commission decides to provide assistance under section 186(1) or (2) appears to the Commission as occurring; (Amended 19 of 2015 s. 21)
 relevant time (有關時間)—
 (a)in relation to a corporation which is listed, means any time since the formation of the corporation; or
 (b)in relation to a corporation which was listed, means any time since the formation of the corporation but before the corporation ceased to remain listed.
 180.Supervision of intermediaries and their associated entities
 (1)Subject to subsections (9) and (10), an authorized person may at any reasonable time, for the purpose of ascertaining whether an intermediary or an associated entity of an intermediary is complying or has complied with, or is likely to be able to comply with, the requirement specified in subsection (2)—
 (a)enter—
 (i)in the case of an intermediary—
 (A)where it is a licensed corporation, its premises as approved by the Commission under section 130(1); or
 (B)where it is a registered institution, the premises of the registered institution; or
 (ii)in the case of an associated entity of an intermediary, the premises of the associated entity;
 (b)inspect, and make copies or otherwise record details of, any record or document relating to—
 (i)the business conducted by the intermediary or the associated entity (as the case may be);
 (ii)any transaction carried out by a related corporation of the intermediary or the associated entity (as the case may be); or
 (iii)any transaction or activity which was undertaken in the course of, or which may affect, the business conducted by the intermediary or the associated entity (as the case may be); and
 (c)make inquiries of—
 (i)the intermediary or the associated entity (as the case may be);
 (ii)a related corporation of the intermediary or the associated entity (as the case may be);
 (iii)subject to subsection (7), any other person, whether or not connected with the intermediary or the associated entity (as the case may be), whom the authorized person has reasonable cause to believe has information relating to, or is in possession of, any record or document referred to in paragraph (b),
 concerning any record or document referred to in paragraph (b), or concerning any transaction or activity which was undertaken in the course of, or which may affect, the business conducted by the intermediary or the associated entity (as the case may be).
 (2)The requirement specified for the purposes of subsection (1) is the requirement not to contravene—
 (a)any provision of this Ordinance;
 (ba)any provision of Part 2 (except section 6) of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615); (Added 15 of 2011 s. 89. Amended 4 of 2018 s. 44)
 (b)any notice or requirement given or made under or pursuant to any of the relevant provisions;
 (c)any of the terms and conditions of any licence or registration under this Ordinance;
 (d)any other condition imposed under or pursuant to any provision of this Ordinance; or (Amended 16 of 2016 s. 7)
 (e)any provision in a code or guideline published under this Ordinance. (Added 16 of 2016 s. 7)
 (3)Subject to subsections (9) and (10), an authorized person in exercising any of his powers under subsection (1)(b) may require—
 (a)the intermediary or the associated entity (as the case may be);
 (b)a related corporation of the intermediary or the associated entity (as the case may be);
 (c)subject to subsection (8), any other person, whether or not connected with the intermediary or the associated entity (as the case may be), whom the authorized person has reasonable cause to believe has information relating to, or is in possession of, any record or document referred to in subsection (1)(b),
 to—
 (i)give the authorized person access to any record or document referred to in subsection (1)(b), and produce, within the time and at the place specified by him, the record or document; and
 (ii)answer any question regarding the record or document.
 (4)Subject to subsections (9) and (10), an authorized person in exercising any of his powers under subsection (1)(c) may require the intermediary or the associated entity, the related corporation or the other person (as the case may be) referred to in subsection (1)(c), to—
 (a)give the authorized person access to any record or document referred to in subsection (1)(b), and produce, within the time and at the place specified by him, the record or document; and
 (b)answer any question raised for the purposes of subsection (1)(c).
 (4A)Subject to subsection (10), if the Commission decides to provide assistance in relation to a licensed corporation under section 186(2A), an authorized person may require the licensed corporation or a related corporation of the licensed corporation to—
 (a)provide to the authorized person, within the time and at the place specified by the authorized person, a copy of any record or document relating to—
 (i)any regulated activity carried on by the licensed corporation; or
 (ii)any transaction or activity which was undertaken in the course of, or which may affect, any regulated activity carried on by the licensed corporation; and
 (b)answer any question raised by the authorized person regarding any record, document, regulated activity, transaction or activity referred to in paragraph (a). (Added 19 of 2015 s. 22)
 (5)An authorized person may in writing require the person giving an answer under this section to verify within a reasonable period specified in the requirement the answer by statutory declaration, which may be taken by the authorized person.
 (6)If a person does not give an answer in accordance with a requirement under this section for the reason that the answer was not within his knowledge, an authorized person may in writing require the person to verify within a reasonable period specified in the requirement by statutory declaration, which may be taken by the authorized person, that he was unable to comply or fully comply (as the case may be) with the requirement for that reason.
 (7)An authorized person shall not exercise any of his powers under subsection (1)(c)(iii) unless he has reasonable cause to believe that the information sought cannot be obtained by the exercise of any of the powers under subsection (1)(c)(i) or (ii).
 (8)An authorized person shall not exercise any of his powers under subsection (3)(c) unless he has reasonable cause to believe that the record or document or the information sought cannot be obtained by the exercise of any of the powers under subsection (3)(a) or (b).
 (9)This section shall not be construed as requiring an authorized financial institution, not being the intermediary or the associated entity in question as referred to in subsection (1) or a related corporation of the intermediary or the associated entity (as the case may be), to disclose any information or produce any record or document relating to the affairs of a customer unless the relevant authority is satisfied, and certifies in writing that it is satisfied, that the disclosure or production is necessary for the purposes of this section.
 (10)Before an authorized person exercises any power under this section (other than subsection (1)(c)(iii) or (3)(c)) in respect of a corporation—
 (a)where the corporation is an authorized financial institution or a corporation which, to the knowledge of the authorized person, is a controller of an authorized financial institution, or has as its controller an authorized financial institution, or has a controller that is also a controller of an authorized financial institution, the authorized person shall consult the Monetary Authority; or
 (b)where the corporation is an insurer authorized under the Insurance Ordinance (Cap. 41), the authorized person shall consult the Insurance Authority. (Amended 12 of 2015 s. 140)
 (11)The relevant authority may authorize in writing any person as an authorized person for the purposes of this section.
 (12)The relevant authority shall furnish an authorized person authorized by it with a copy of his authorization, and the authorized person, when exercising any power under this section, shall as soon as reasonably practicable produce a copy of the authorization for inspection.
 (13)Where a copy of any record or document is supplied or made for the purpose of complying with a requirement imposed under this section and a facility of a person other than the relevant authority is used to make the copy, the relevant authority shall reimburse the expenses which, in the opinion of the relevant authority, have been reasonably incurred by the person in making the copy.
 (14)A person who, without reasonable excuse, fails to comply with a requirement imposed on him by an authorized person under this section commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (15)A person who—
 (a)in purported compliance with a requirement imposed on him by an authorized person under this section, produces any record or document or gives an answer which is false or misleading in a material particular; and
 (b)knows that, or is reckless as to whether, the record or document or the answer is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (16)A person who—
 (a)with intent to defraud—
 (i)fails to comply with a requirement imposed on him by an authorized person under this section; or
 (ii)in purported compliance with a requirement imposed on him by an authorized person under this section, produces any record or document or gives an answer which is false or misleading in a material particular; or
 (b)being an officer or employee of a corporation, with intent to defraud causes or allows the corporation to—
 (i)fail to comply with a requirement imposed on it by an authorized person under this section; or
 (ii)in purported compliance with a requirement imposed on it by an authorized person under this section, produce any record or document or give an answer which is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (17)In this section—
 authorized person (獲授權人) means a person authorized under subsection (11);
 controller (控制人) means a person who is an indirect controller or a majority shareholder controller as defined in section 2(1) of the Banking Ordinance (Cap. 155);
 relevant authority (有關當局) means—
 (a)where—
 (i)the intermediary in question as referred to in subsection (1) is a registered institution; or
 (ii)the associated entity in question as referred to in that subsection is the associated entity of a registered institution,
 the Monetary Authority; or
 (b)in any other case, the Commission.
 181.Information relating to transactions
 (1)An authorized person may, for the purpose of enabling or assisting the Commission to perform a function under any of the relevant provisions, require—
 (a)a person registered as the holder of securities in a register of members kept under the Companies Ordinance (Cap. 622); (Amended 28 of 2012 ss. 912 & 920)
 (b)a person whom the authorized person has reasonable cause to believe holds any securities, futures contract, leveraged foreign exchange contract, OTC derivative product, or an interest in any securities, futures contract, leveraged foreign exchange contract, OTC derivative product or collective investment scheme;
 (c)a person whom the authorized person has reasonable cause to believe has acquired or disposed of any securities, futures contract, leveraged foreign exchange contract, OTC derivative product, or an interest in any securities, futures contract, leveraged foreign exchange contract, OTC derivative product or collective investment scheme, whether directly or through a nominee, trustee or agent, and whether as beneficial owner, nominee, trustee, agent or otherwise;
 (d)a licensed person or registered institution through whom or which the authorized person has reasonable cause to believe any securities, futures contract, leveraged foreign exchange contract, OTC derivative product, or an interest in any securities, futures contract, leveraged foreign exchange contract, OTC derivative product or collective investment scheme has been acquired, disposed of, dealt with, traded or arranged, 
 to furnish to him any of the information specified in subsection (2) within the time and in the form specified by him. (Amended 6 of 2014 s. 16)
 (2)The information specified for the purposes of subsection (1) is—
 (a)the particulars (including, in so far as applicable, the name and aliases, address, telephone and facsimile numbers, electronic mail address, occupation and particulars of any document of identity (including, if not an individual, any document evidencing incorporation or registration)) that are reasonably capable of establishing the identity of the person on whose behalf, or by, from, to or through whom, the securities, futures contract, leveraged foreign exchange contract, OTC derivative product, or the interest in securities, futures contract, leveraged foreign exchange contract, OTC derivative product or collective investment scheme in question is held, or has been acquired, disposed of, dealt with, traded or arranged (as the case may be);
 (b)the particulars (including the quantity) of and, in the case of acquisition or disposal, the consideration (if any) for the securities, futures contract, leveraged foreign exchange contract, OTC derivative product, or the interest in securities, futures contract, leveraged foreign exchange contract, OTC derivative product or collective investment scheme; and
 (c)the instructions (if any) given to or by the person referred to in paragraph (a), or any officer, employee or agent of such person, in relation to the holding, acquisition, disposal, dealing, trading, arrangement of or in respect of the securities, futures contract, leveraged foreign exchange contract, OTC derivative product, or the interest in securities, futures contract, leveraged foreign exchange contract, OTC derivative product or collective investment scheme. (Amended 6 of 2014 s. 16)
 (3)An authorized person may in writing require the person furnishing any information under this section to verify within a reasonable period specified in the requirement the information by statutory declaration, which may be taken by the authorized person.
 (4)If a person does not furnish any information in accordance with a requirement under this section for the reason that the information was not within his knowledge or in his possession, an authorized person may in writing require the person to verify within a reasonable period specified in the requirement by statutory declaration, which may be taken by the authorized person, that he was unable to comply or fully comply (as the case may be) with the requirement for that reason.
 (5)The Commission may authorize in writing any person as an authorized person for the purposes of this section.
 (6)The Commission shall furnish an authorized person with a copy of his authorization, and the authorized person, when exercising any power under this section, shall upon request by the person in respect of whom the power is exercised produce a copy of the authorization for inspection.
 (7)A person who, without reasonable excuse, fails to comply with a requirement imposed on him by an authorized person under this section commits an offence and is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (8)A person who—
 (a)in purported compliance with a requirement imposed on him by an authorized person under this section, furnishes to the authorized person information which is false or misleading in a material particular; and
 (b)knows that, or is reckless as to whether, the information is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (9)A person who—
 (a)with intent to defraud—
 (i)fails to comply with a requirement imposed on him by an authorized person under this section; or
 (ii)in purported compliance with a requirement imposed on him by an authorized person under this section, furnishes to the authorized person information which is false or misleading in a material particular; or
 (b)being an officer or employee of a corporation, with intent to defraud causes or allows the corporation to—
 (i)fail to comply with a requirement imposed on it by an authorized person under this section; or
 (ii)in purported compliance with a requirement imposed on it by an authorized person under this section, furnish to the authorized person information which is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (10)In this section—
 authorized person (獲授權人) means a person authorized under subsection (5);
 interest (權益) includes an interest of any nature, whether legal, equitable, proprietary or otherwise.
 Division 3Commission’s Powers of Investigation
 (Replaced 6 of 2014 s. 17)
 182.Investigations by Commission
 (Replaced 6 of 2014 s. 18)
 (1)Where—
 (a)the Commission has reasonable cause to believe that an offence under any of the relevant provisions may have been committed;
 (b)the Commission has reasonable cause to believe that a person may have engaged in defalcation, fraud, misfeasance or other misconduct in connection with—
 (i)dealing in any securities or futures contract or trading in any leveraged foreign exchange contract;
 (ii)the management of investment in any securities, futures contract or leveraged foreign exchange contract;
 (iii)offering or making any structured product, leveraged foreign exchange contract or collective investment scheme; (Amended 8 of 2011 s. 9)
 (iv)giving advice in relation to the allotment of securities, or the acquisition or disposal of, or investment in, any securities, structured product, futures contract, leveraged foreign exchange contract, or an interest in any securities, structured product, futures contract, leveraged foreign exchange contract or collective investment scheme; or (Amended 8 of 2011 s. 9)
 (v)any transaction involving securities margin financing;
 (vi)(Addition not yet in operation—see 6 of 2014 s. 18)
 (vii)(Addition not yet in operation—see 6 of 2014 s. 18)
 (viii)the management of an open-ended fund company or the management or safe keeping of the scheme property of an open-ended fund company; (Added 16 of 2016 s. 8)
 (c)the Commission has reasonable cause to believe that market misconduct may have taken place;
 (ca)the Commission has reasonable cause to believe that a breach of a disclosure requirement may have taken place under Part XIVA; (Added 9 of 2012 s. 4)
 (d)the Commission has reasonable cause to believe that the manner in which a person has engaged or is engaging in any of the activities referred to in paragraph (b) is not in the interest of the investing public or in the public interest; (Amended 17 of 2021 s. 9)
 #(da)the Commission has reasonable cause to believe that a prescribed person other than an authorized financial institution or an approved money broker may have contravened the reporting obligation, clearing obligation, trading obligation or record keeping obligation; (Added 6 of 2014 s. 18)
 @(db)the Commission has reasonable cause to believe that a registered SIP may have failed to comply with a requirement made under section 101X; (Added 6 of 2014 s. 18)
 (e)the Commission—
 (i)for the purpose of considering whether to exercise any power under section 194 or 196, has reason to inquire whether any person is or was at any time guilty of misconduct, or is not a fit and proper person, as described in section 194(1) or (2) or 196(1) or (2); or
 (ii)for the purpose of assisting the Monetary Authority to consider whether to exercise any power under section 58A or 71C of the Banking Ordinance (Cap. 155), has reason to inquire whether any person—
 (A)is or was at any time guilty of misconduct, or is not or has ceased to be a fit and proper person, as described in section 58A(1) of that Ordinance; or
 (B)is or was at any time guilty of misconduct, or should cease to be regarded as a fit and proper person, as described in section 71C(4) of that Ordinance;
 (f)the Commission has reason to inquire whether any of the conditions imposed in respect of an authorization under section 104, 104A or 105 are being complied with; (Amended 8 of 2011 s. 9; 16 of 2016 s. 8)
 (fa)the Commission has reason to inquire whether, with respect to an open-ended fund company, any of the requirements for registration specified in section 112E is no longer met; (Added 16 of 2016 s. 8)
 (fb)the Commission has reason to inquire whether any of the conditions imposed in respect of the registration of an open-ended fund company has been or is being complied with; or (Added 16 of 2016 s. 8)
 ##(g)a matter in respect of the investigation of which the Commission decides to provide assistance under section 186(1) or (2) is, in the opinion of the Commission, of a nature similar to the matter described in paragraph (a), (b), (c), (d), (da), (db), (e), (f), (fa) or (fb) as that which the Commission has reasonable cause to believe or has reason to inquire (as the case may be), (Amended 6 of 2014 s. 18; 19 of 2015 s. 23; 16 of 2016 s. 8)
 the Commission may in writing direct one or more of its employees or, with the consent of the Financial Secretary, appoint one or more other persons, to investigate any of the matters referred to in paragraphs (a) to (g).
 (2)The costs and expenses incurred by an investigator, other than an employee of the Commission, are to be paid out of moneys provided by the Legislative Council.
 (3)The Commission shall furnish an investigator with a copy of his direction or appointment (as the case may be), and the investigator, before first imposing any requirement on a person under section 183(1), (2) or (3), shall produce a copy of the direction or appointment (as the case may be) to that person for inspection.
 (4)Before the Commission directs any of its employees, or appoints any person—
 (a)to investigate any matter under subsection (1)(e)(i), to the extent that the investigation is for the purpose of considering whether to exercise any power under section 196; or
 (b)to investigate any matter under subsection (1)(e)(ii),
 the Commission shall consult the Monetary Authority.
 Editorial Note:
 # The new section 182(1)(da) added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on—
 (a)  10 July 2015, in so far as it relates to the contravention of the reporting obligation and the record keeping obligation; please see paragraph (f) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015); and
 (b)  1 September 2016, in so far as it relates to the contravention of the clearing obligation; please see paragraph (b) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 @ Not yet in operation.
 ## The amendment to section 182(1)(g) made by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on 10 July 2015, except in so far as it relates to the new section 182(1)(db) of the Ordinance. Please see paragraph (g) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015).
 183.Conduct of investigations
 (1)The person under investigation or a person whom the investigator has reasonable cause to believe has in his possession any record or document which contains, or which is likely to contain, information relevant to an investigation under section 182, or whom the investigator has reasonable cause to believe otherwise has such information in his possession, shall—
 (a)produce to the investigator, within the time and at the place the investigator reasonably requires in writing, any record or document specified by the investigator which is, or may be, relevant to the investigation and which is in his possession;
 (b)if required by the investigator, give the investigator an explanation or further particulars in respect of any record or document produced under paragraph (a);
 (c)attend before the investigator at the time and place the investigator reasonably requires in writing, and answer any question relating to the matters under investigation that the investigator may raise with him; and
 (d)give the investigator all assistance in connection with the investigation which he is reasonably able to give, including responding to any written question raised by the investigator.
 (2)An investigator may in writing require the person giving or making an explanation, particulars, answer or statement under this section to verify within a reasonable period specified in the requirement the explanation, particulars, answer or statement by statutory declaration, which may be taken by the investigator.
 (3)If a person does not give or make an explanation, particulars, answer or statement in accordance with a requirement under this section for the reason that the explanation, particulars, answer or statement was not within his knowledge or in his possession, an investigator may in writing require the person to verify within a reasonable period specified in the requirement by statutory declaration, which may be taken by the investigator, that he was unable to comply or fully comply (as the case may be) with the requirement for that reason.
 (4)Neither section 182 nor this section shall be construed as requiring an authorized financial institution to disclose any information or produce any record or document relating to the affairs of a customer to the investigator unless—
 (a)the customer is a person whom the investigator has reasonable cause to believe may be able to give information relevant to the investigation; and
 (b)the Commission is satisfied, and certifies in writing that it is satisfied, that the disclosure or production is necessary for the purposes of the investigation.
 (5)The investigator may, and if so directed by the Commission shall, make interim reports on his investigation to the Commission, and on the conclusion of his investigation shall make a final report on his investigation to the Commission.
 (6)The Commission may, with the consent of the Secretary for Justice, cause a report under this section to be published.
 184.Offences in relation to investigations
 (1)A person who, without reasonable excuse—
 (a)fails to produce any record or document required to be produced under section 183(1)(a);
 (b)fails to give an explanation or further particulars required under section 183(1)(b);
 (c)fails to attend before the investigator as required under section 183(1)(c);
 (d)fails to answer a question raised by the investigator under section 183(1)(c);
 (e)fails to comply with section 183(1)(d); or
 (f)fails to comply with a requirement under section 183(2) or (3),
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (ii)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (2)A person—
 (a)who—
 (i)in purportedly complying with a requirement imposed by the investigator under section 183(1)(a), produces any record or document which is false or misleading in a material particular;
 (ii)in purportedly complying with a requirement imposed by the investigator under section 183(1)(b), gives any explanation or further particulars which are false or misleading in a material particular;
 (iii)in purportedly answering any question raised by the investigator under section 183(1)(c), says anything which is false or misleading in a material particular; or
 (iv)in purportedly responding to any written question raised by the investigator under section 183(1)(d), states anything which is false or misleading in a material particular; and
 (b)who knows that, or is reckless as to whether, the record or document, the explanation or further particulars, the thing or the statement (as the case may be) is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (3)A person who—
 (a)with intent to defraud—
 (i)fails to do anything described in subsection (1)(a), (b), (c), (d), (e) or (f);
 (ii)in purportedly complying with a requirement imposed by the investigator under section 183(1)(a), produces any record or document which is false or misleading in a material particular;
 (iii)in purportedly complying with a requirement imposed by the investigator under section 183(1)(b), gives any explanation or further particulars which are false or misleading in a material particular;
 (iv)in purportedly answering any question raised by the investigator under section 183(1)(c), says anything which is false or misleading in a material particular; or
 (v)in purportedly responding to any written question raised by the investigator under section 183(1)(d), states anything which is false or misleading in a material particular; or
 (b)being an officer or employee of a corporation, with intent to defraud causes or allows the corporation to—
 (i)fail to do anything described in subsection (1)(a), (b), (c), (d), (e) or (f);
 (ii)in purportedly complying with a requirement imposed by the investigator under section 183(1)(a), produce any record or document which is false or misleading in a material particular;
 (iii)in purportedly complying with a requirement imposed by the investigator under section 183(1)(b), give any explanation or further particulars which are false or misleading in a material particular;
 (iv)in purportedly answering any question raised by the investigator under section 183(1)(c), say anything which is false or misleading in a material particular; or
 (v)in purportedly responding to any written question raised by the investigator under section 183(1)(d), state anything which is false or misleading in a material particular,
 commits an offence and is liable—
 (i)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (ii)on summary conviction to a fine at level 6 and to imprisonment for 6 months.  (Amended 6 of 2014 s. 19)
 (4)A person is not excused from complying with a requirement imposed on the person by an investigator under section 183 only on the ground that to do so might tend to incriminate the person.
 (5)Where any person is convicted by a court on a prosecution instituted as a result of an investigation under section 182, the court may order him to pay to the Commission the whole or a part of the costs and expenses of the investigation and the Commission may recover the whole or the part (as the case may be) of the costs and expenses as a civil debt due to it.
 (6)Where the Commission receives an amount under an order made under subsection (5) in respect of any of the costs and expenses of an investigation, and all or any of the costs and expenses have been paid out of moneys provided by the Legislative Council, the Commission shall pay to the Financial Secretary the amount received under the order to the extent that it has already been paid out of moneys provided by the Legislative Council.
 Division 3AMonetary Authority’s Powers of Investigation
 (Division 3A added 6 of 2014 s. 20)
 #184A.Investigations by Monetary Authority
 (1)If the Monetary Authority has reasonable cause to believe that an authorized financial institution or an approved money broker may have contravened the reporting obligation, clearing obligation, trading obligation or record keeping obligation, the Monetary Authority may—
 (a)direct in writing one or more persons appointed under section 5A(3) of the Exchange Fund Ordinance (Cap. 66) to investigate the matter; or
 (b)with the consent of the Financial Secretary, appoint in writing one or more other persons to investigate the matter.
 (2)The Monetary Authority must give an MA investigator a copy of—
 (a)the direction, if the MA investigator is directed under subsection (1)(a); and
 (b)the appointment, if the MA investigator is appointed under subsection (1)(b).
 (3)The MA investigator must, before first imposing a requirement on a person under section 184B(1), (2) or (3), produce a copy of the direction or appointment for inspection by the person.
 Editorial Note:
 # The new section 184A added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on—
 (a)  10 July 2015, in so far as it relates to the contravention of the reporting obligation and the record keeping obligation; please see paragraph (i)(i) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015); and
 (b)  1 September 2016, in so far as it relates to the contravention of the clearing obligation; please see paragraph (c) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 184B.Conduct of investigations
 (1)A person under investigation or a person whom the MA investigator has reasonable cause to believe to be in possession of any record or document that contains, or that is likely to contain, information relevant to an investigation under section 184A, or whom the MA investigator has reasonable cause to believe to be otherwise in possession of such information, must—
 (a)produce to the MA investigator, within the time and at a place the MA investigator reasonably requires in writing, a record or document specified by the MA investigator—
 (i)that is, or may be, relevant to the investigation; and
 (ii)that is in the person’s possession;
 (b)if required by the MA investigator, give the MA investigator an explanation or further particulars in respect of a record or document produced under paragraph (a);
 (c)attend before the MA investigator at a time and place the MA investigator reasonably requires in writing, and answer any question relating to a matter under investigation raised by the MA investigator; and
 (d)give the MA investigator all assistance in connection with the investigation that the person is reasonably able to give, including responding to any written question raised by the MA investigator.
 (2)An MA investigator may require, in writing, a person who makes or gives an explanation, particulars, answer or statement under this section to verify, by statutory declaration, within a reasonable period specified in the requirement, the explanation, particulars, answer or statement.
 (3)If a person does not make or give an explanation, particulars, answer or statement in accordance with a requirement under this section for the reason that the explanation, particulars, answer or statement was not within the person’s knowledge or in the person’s possession, an MA investigator may require, in writing, the person to verify by statutory declaration—
 (a)that the person was unable to comply or fully comply (as the case may be) with the requirement for that reason; and
 (b)within a reasonable period specified in the requirement.
 (4)A statutory declaration under this section may be made before the MA investigator.
 184C.Investigation reports
 (1)An MA investigator—
 (a)may make interim reports on the investigation conducted under this Division to the Monetary Authority;
 (b)must make interim reports on the investigation to the Monetary Authority if directed by the Monetary Authority; and
 (c)must, after the completion of the investigation, make a final report on the investigation to the Monetary Authority.
 (2)The Monetary Authority may, with the consent of the Secretary for Justice, publish any report made under subsection (1).
 184D.Offences relating to investigations
 (1)A person commits an offence if the person, without reasonable excuse—
 (a)fails to produce a record or document required to be produced under section 184B(1)(a);
 (b)fails to give an explanation or further particulars required under section 184B(1)(b);
 (c)fails to attend before the MA investigator as required under section 184B(1)(c);
 (d)fails to answer a question raised by the MA investigator under section 184B(1)(c);
 (e)fails to comply with section 184B(1)(d); or
 (f)fails to comply with a requirement under section 184B(2) or (3).
 (2)A person who commits an offence under subsection (1) is liable—
 (a)on conviction on indictment to a fine of $200,000 and to imprisonment for 1 year; or
 (b)on summary conviction to a fine at level 5 and to imprisonment for 6 months.
 (3)A person commits an offence if—
 (a)the person—
 (i)in purportedly complying with a requirement imposed by the MA investigator under section 184B(1)(a), produces a record or document that is false or misleading in a material particular;
 (ii)in purportedly complying with a requirement imposed by the MA investigator under section 184B(1)(b), gives an explanation or further particulars that are false or misleading in a material particular;
 (iii)in purportedly answering a question raised by the MA investigator under section 184B(1)(c), says anything that is false or misleading in a material particular; or
 (iv)in purportedly responding to a written question raised by the MA investigator under section 184B(1)(d), states anything that is false or misleading in a material particular; and
 (b)the person knows that, or is reckless as to whether, the record or document, the explanation or further particulars, the thing said or statement is false or misleading in a material particular.
 (4)A person who commits an offence under subsection (3) is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (5)A person commits an offence if the person with intent to defraud—
 (a)fails to do anything described in subsection (1)(a), (b), (c), (d), (e) or (f);
 (b)in purportedly complying with a requirement imposed by the MA investigator under section 184B(1)(a), produces a record or document that is false or misleading in a material particular;
 (c)in purportedly complying with a requirement imposed by the MA investigator under section 184B(1)(b), gives an explanation or further particulars that are false or misleading in a material particular;
 (d)in purportedly answering a question raised by the MA investigator under section 184B(1)(c), says anything that is false or misleading in a material particular; or
 (e)in purportedly responding to a written question raised by the MA investigator under section 184B(1)(d), states anything that is false or misleading in a material particular.
 (6)An officer or employee of a corporation commits an offence if the officer or employee, with intent to defraud, causes or allows the corporation to—
 (a)fail to do anything described in subsection (1)(a), (b), (c), (d), (e) or (f);
 (b)in purportedly complying with a requirement imposed by the MA investigator under section 184B(1)(a), produce a record or document that is false or misleading in a material particular;
 (c)in purportedly complying with a requirement imposed by the MA investigator under section 184B(1)(b), give an explanation or further particulars that are false or misleading in a material particular;
 (d)in purportedly answering a question raised by the MA investigator under section 184B(1)(c), say anything that is false or misleading in a material particular; or
 (e)in purportedly responding to a written question raised by the MA investigator under section 184B(1)(d), state anything that is false or misleading in a material particular.
 (7)A person is not excused from complying with a requirement imposed under section 184B(1), (2) or (3) only on the ground that to do so might tend to incriminate the person.
 (8)A person who commits an offence under subsection (5) or (6) is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 7 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 184E.Recovery of costs of investigation
 (1)If a person is convicted by a court on a prosecution instituted as a result of an investigation under this Division, the court may order the person to pay to the Monetary Authority the whole or a part of the costs and expenses of the investigation.
 (2)The Monetary Authority may recover, as a civil debt due to the Monetary Authority, the whole or the part (as the case may be) of the costs and expenses ordered under subsection (1).
 (3)The Monetary Authority must pay into the Exchange Fund any costs and expenses recovered under subsection (2).
 Division 4Miscellaneous
 185.Application to Court of First Instance relating to non-compliance with requirements under section 179, 180, 181, 183 or 184B
 (Amended 6 of 2014 s. 21)
 (1)If a person fails to do anything upon being required to do so by an authorized person under section 179, 180 or 181, or to do anything upon being required to do so by an investigator under section 183(1), (2) or (3), the Commission may, by originating summons or originating motion, make an application to the Court of First Instance in respect of the failure, and the Court may inquire into the case and—  (Amended 9 of 2012 s. 40)
 (a)if the Court is satisfied that there is no reasonable excuse for the person not to comply with the requirement, order the person to comply with the requirement within the period specified by the Court; and
 (b)if the Court is satisfied that the failure was without reasonable excuse, punish the person, and any other person knowingly involved in the failure, in the same manner as if he and, where applicable, that other person had been guilty of contempt of court.
 (1A)If a person fails to do anything on being required to do so by an MA investigator under section 184B(1), (2) or (3), the Monetary Authority may, by originating summons, make an application to the Court of First Instance in respect of the failure. (Added 6 of 2014 s. 21)
 (1B)The Court of First Instance may inquire into the case and if satisfied that—
 (a)there is no reasonable excuse for the person not to comply with the requirement, order the person to comply with it within the period specified by the Court; and
 (b)the failure was without reasonable excuse, punish the person, and any other person knowingly involved in the failure, in the same manner as if the person, and (if applicable) that other person, had been guilty of contempt of court. (Added 6 of 2014 s. 21)
 (2)An originating summons under subsection (1) or (1A) shall be in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 (3)Notwithstanding anything in this section and any other provisions of this Ordinance—
 (a)no proceedings may be instituted against any person for the purposes of subsection (1)(b) or (1B)(b) in respect of any conduct if—  (Amended 6 of 2014 s. 21)
 (i)criminal proceedings have previously been instituted against the person under section 179, 180, 181, 184 or 184D in respect of the same conduct; and
 (ii)(A)those criminal proceedings remain pending; or
 (B)by reason of the previous institution of those criminal proceedings, no criminal proceedings may again be lawfully instituted against that person under such section in respect of the same conduct;
 (b)no criminal proceedings may be instituted against any person under section 179, 180, 181, 184 or 184D in respect of any conduct if—  (Amended 6 of 2014 s. 21)
 (i)proceedings have previously been instituted against the person for the purposes of subsection (1)(b) or (1B)(b) in respect of the same conduct; and
 (ii)(A)those proceedings remain pending; or
 (B)by reason of the previous institution of those proceedings, no proceedings may again be lawfully instituted against that person for the purposes of such subsection in respect of the same conduct.
 (Amended E.R. 2 of 2012; 6 of 2014 s. 21)
 186.Commission’s assistance to regulators outside Hong Kong
 (Amended 6 of 2014 s. 22)
 (1)Where the Commission receives, from an authority or regulatory organization outside Hong Kong which in the opinion of the Commission satisfies the requirements referred to in subsection (5)(a) and (b), a request for assistance to investigate whether a person specified by the authority or regulatory organization has contravened or is contravening legal or regulatory requirements which—
 (a)the authority or regulatory organization enforces or administers; and
 (b)relate to such transactions regarding any securities, futures contract, leveraged foreign exchange contract, OTC derivative product, collective investment scheme or other similar transactions as are regulated by the authority or regulatory organization, (Amended 6 of 2014 s. 22)
 the Commission may, where it is of the opinion that the condition specified in subsection (3) is satisfied, provide the assistance to investigate the matter by directing that any of the powers under sections 179, 181, 182 and 183 be exercised. (Amended 19 of 2015 s. 24)
 (2)Where the Commission receives, from a companies inspector outside Hong Kong who in the opinion of the Commission satisfies the requirements referred to in subsection (5)(a) and (b), a request for assistance to investigate whether a person specified by the companies inspector has contravened or is contravening legal or regulatory requirements which relate to transactions regarding any securities, futures contract, leveraged foreign exchange contract, OTC derivative product, collective investment scheme or other similar transactions, the Commission may, where it is of the opinion that the condition specified in subsection (3) is satisfied, provide the assistance to investigate the matter by directing that any of the powers under sections 179, 181, 182 and 183 be exercised. (Amended 6 of 2014 s. 22; 19 of 2015 s. 24)
 (2A)Where the Commission receives, from an authority or regulatory organization outside Hong Kong, a request for assistance in relation to a licensed corporation, the Commission may provide the assistance by directing that the power under section 180(4A) be exercised if—
 (a)in the opinion of the Commission—
 (i)the authority or regulatory organization satisfies the requirements referred to in subsection (5)(a) and (b); and
 (ii)the condition specified in subsection (3) is satisfied; and
 (b)the authority or regulatory organization has provided to the Commission a written statement that conforms with subsection (2D) and a written undertaking that conforms with subsection (2E). (Added 19 of 2015 s. 24)
 (2B)In subsection (2A), a reference to assistance in relation to a licensed corporation is a reference to assistance to ascertain whether a corporation specified in subsection (2C)—
 (a)constitutes a risk to, or may affect, the financial stability of the jurisdiction of the authority or regulatory organization; or
 (b)is complying or has complied with, or is likely to be able to comply with, legal or regulatory requirements that—
 (i)are administered by the authority or regulatory organization; and
 (ii)relate to transactions or activities regarding any securities, futures contract, leveraged foreign exchange contract, OTC derivative product, collective investment scheme, or other similar transactions or activities, that are regulated by the authority or regulatory organization. (Added 19 of 2015 s. 24)
 (2C)The corporation specified for the purposes of subsection (2B) is one that—
 (a)is regulated by the authority or regulatory organization; and
 (b)is a licensed corporation or a related corporation of a licensed corporation. (Added 19 of 2015 s. 24)
 (2D)The written statement referred to in subsection (2A)(b) must be to the effect of confirming that the authority or regulatory organization has not been and will not be able to—
 (a)obtain the information referred to in section 180(4A)(a) or (b) by any other reasonable means; and
 (b)fully ascertain the matters described in subsection (2B) without the information. (Added 19 of 2015 s. 24)
 (2E)The written undertaking referred to in subsection (2A)(b) must be to the effect that the authority or regulatory organization—
 (a)will use the information obtained from the Commission because of the request for assistance solely for ascertaining the matters described in subsection (2B);
 (b)will not use any of the information in any proceedings, in the jurisdiction of the authority or regulatory organization or elsewhere, unless—
 (i)the authority or regulatory organization has made a separate request under subsection (1) (investigation request), and the Commission has decided to provide assistance under that subsection; and
 (ii)the authority or regulatory organization has obtained the same information from the Commission because of the investigation request;
 (c)will treat the information as confidential and will not disclose it to any other person, in the jurisdiction of the authority or regulatory organization or elsewhere, for any purpose without the consent of the Commission;
 (d)will, on receiving a demand legally enforceable under the laws of the jurisdiction of the authority or regulatory organization, for the disclosure of any of the information—
 (i)inform the Commission as soon as reasonably practicable; and
 (ii)assist in preserving the confidentiality of the information by taking all appropriate measures as may be available (including but not limited to asserting legal exemptions or privileges under the laws of the jurisdiction of the authority or regulatory organization); and
 (e)will cooperate with the Commission in any action or proceedings, in the jurisdiction of the authority or regulatory organization or elsewhere, that seek to safeguard the confidentiality of any of the information. (Added 19 of 2015 s. 24)
 (3)The condition referred to in subsections (1), (2) and (2A)(a)(ii) is that— (Amended 19 of 2015 s. 24)
 (a)it is desirable or expedient that the assistance requested under subsection (1), (2) or (2A) (as the case may be) should be provided in the interest of the investing public or in the public interest; or (Amended 19 of 2015 s. 24)
 (b)the assistance will enable or assist the recipient of the assistance to perform its or his functions and it is not contrary to the interest of the investing public or to the public interest that the assistance should be provided.
 (4)In deciding whether the condition specified in subsection (3) is satisfied in a particular case, the Commission shall take into account—
 (a)where the recipient of the assistance is an authority or regulatory organization referred to in subsection (1) or (2A), whether the authority or regulatory organization will— (Amended 19 of 2015 s. 24)
 (i)pay to the Commission any of the costs and expenses incurred in providing the assistance; and
 (ii)be able and willing to provide reciprocal assistance within its jurisdiction in response to a comparable request for assistance from Hong Kong; or
 (b)where the recipient of the assistance is a companies inspector referred to in subsection (2), whether—
 (i)the companies inspector will pay to the Commission any of the costs and expenses incurred in providing the assistance; and
 (ii)under the laws of the country or territory in which the companies inspector is appointed, reciprocal assistance will be provided in response to a comparable request for assistance from Hong Kong.
 (5)Where the Commission is satisfied, for the purposes of subsection (1), (2) or (2A)(a)(i), that an authority, regulatory organization or companies inspector outside Hong Kong— (Amended 19 of 2015 s. 24)
 (a)performs any function similar to a function of the Commission or the Registrar of Companies, or regulates, supervises or investigates banking, insurance or other financial services or the affairs of corporations; and
 (b)is subject to adequate secrecy provisions,
 the Commission shall as soon as reasonably practicable thereafter cause the name of the authority, regulatory organization or companies inspector (as the case may be) to be published in the Gazette.
 (6)If a person is required—
 (a)to provide or make an explanation or statement as required by an authorized person within the meaning of section 179 exercising pursuant to subsection (1) or (2) a power under section 179; or
 (b)to give an explanation or further particulars as required by, or to give an answer to any question as raised by, an investigator exercising pursuant to subsection (1) or (2) a power under section 183,
 and the explanation or statement, the explanation or further particulars, or the answer (as the case may be) might tend to incriminate him and he so claims before providing or making the explanation or statement, giving the explanation or further particulars, or giving the answer (as the case may be), then, without limiting the provisions of section 187, the authorized person or investigator (as the case may be) shall not provide evidence of the requirement and the explanation or statement, the explanation or further particulars, or the question and answer (as the case may be) to an authority, regulatory organization or companies inspector outside Hong Kong for use in criminal proceedings against him in the jurisdiction of the authority, regulatory organization or companies inspector (as the case may be).
 (7)Where the Commission receives from an authority, regulatory organization or companies inspector outside Hong Kong an amount paid in respect of any of the costs and expenses incurred in providing assistance under this section, and all or any of the costs and expenses have been paid out of moneys provided by the Legislative Council, the Commission shall pay to the Financial Secretary the amount received to the extent that it has already been paid out of moneys provided by the Legislative Council.
 (8)Any matter published under subsection (5) is not subsidiary legislation.
 (9)In this section, companies inspector (公司審查員), in relation to a place outside Hong Kong, means a person whose functions under the laws of that place include the investigation of the affairs of a corporation carrying on business in that place.
 186A.Monetary Authority’s assistance to regulators outside Hong Kong
 (1)If the Monetary Authority receives from an overseas entity a request for assistance described in subsection (2), the Monetary Authority may give the requested assistance by exercising the powers under sections 184A and 184B if, in the opinion of the Monetary Authority—
 (a)the overseas entity satisfies the requirements referred to in subsection (5); and
 (b)the condition in subsection (7) is satisfied.
 (2)A request for assistance referred to in subsection (1) is a request for assistance to investigate whether a person specified by the overseas entity has contravened or is contravening legal or regulatory requirements that—
 (a)the overseas entity enforces or administers; and
 (b)relate to—
 (i)transactions regarding OTC derivative products regulated by the overseas entity; or
 (ii)other similar transactions regulated by the overseas entity.
 (3)If the Monetary Authority receives from a companies inspector outside Hong Kong a request for assistance described in subsection (4), the Monetary Authority may give the requested assistance by exercising the powers under sections 184A and 184B if, in the opinion of the Monetary Authority—
 (a)the companies inspector satisfies the requirements referred to in subsection (6); and
 (b)the condition in subsection (7) is satisfied.
 (4)A request for assistance referred to in subsection (3) is a request for assistance to investigate whether a person specified by the companies inspector outside Hong Kong has contravened or is contravening legal or regulatory requirements that relate to transactions regarding OTC derivative products or other similar transactions.
 (5)The requirements referred to in subsection (1)(a) are that the overseas entity—
 (a)performs functions similar to the functions of the Monetary Authority or regulates, supervises or investigates banking, insurance or other financial services; and
 (b)is subject to adequate secrecy provisions.
 (6)The requirements referred to in subsection (3)(a) are that the companies inspector outside Hong Kong—
 (a)performs functions similar to the functions of the Registrar of Companies or regulates, supervises or investigates the affairs of corporations; and
 (b)is subject to adequate secrecy provisions.
 (7)The condition referred to in subsections (1)(b) and (3)(b) is that—
 (a)it is desirable or expedient that the assistance should be given in the interests of the investing public or in the public interest; or
 (b)the assistance will enable or assist the recipient of the assistance to perform the recipient’s functions and it is not contrary to the interests of the investing public or to the public interest that the assistance should be given.
 (8)In deciding whether the condition set out in subsection (7) is satisfied in a particular case, the Monetary Authority must take into account—
 (a)if the recipient of the assistance is an overseas entity, whether the overseas entity will—
 (i)pay to the Monetary Authority any of the costs and expenses incurred in giving the assistance; and
 (ii)be able and willing to give reciprocal assistance within its jurisdiction in response to a comparable request for assistance from Hong Kong; or
 (b)if the recipient of the assistance is a companies inspector outside Hong Kong, whether—
 (i)the companies inspector will pay to the Monetary Authority any of the costs and expenses incurred in giving the assistance; and
 (ii)under the laws of the country or territory in which the companies inspector is appointed, reciprocal assistance will be given in response to a comparable request for assistance from Hong Kong.
 (9)If the Monetary Authority is satisfied of the matters referred to in subsection (5)(a) and (b) or (6)(a) and (b), the Monetary Authority must, as soon as reasonably practicable after being so satisfied, publish in the Gazette, the name of the overseas entity or the companies inspector outside Hong Kong.
 (10)Subsection (11) applies if a person is required to give an explanation or further particulars as required by, or to give an answer to a question raised by, an MA investigator exercising under subsection (1) or (3), a power under section 184B, and the explanation, further particulars or the answer might tend to incriminate the person and the person so claims before giving it.
 (11)Without limiting section 187, the MA investigator must not provide to an overseas entity or a companies inspector outside Hong Kong for use in criminal proceedings against the person in the jurisdiction of the overseas entity or the companies inspector—
 (a)evidence of the requirement;
 (b)evidence of the question and answer; or
 (c)evidence of the explanation or further particulars.
 (12)The Monetary Authority must pay into the Exchange Fund any amount received from an overseas entity or a companies inspector outside Hong Kong in respect of costs and expenses incurred by the Monetary Authority in giving assistance under this section.
 (13)A matter published under subsection (9) is not subsidiary legislation.
 (14)In this section—
 companies inspector (公司審查員), in relation to a place outside Hong Kong, has the meaning given by section 186(9);
 overseas entity (海外實體) means an authority or regulatory organization outside Hong Kong.
 (Added 6 of 2014 s. 23)
 187.Use of incriminating evidence in proceedings
 (1)Where—
 (a)an authorized person within the meaning of section 179 requires a person to provide or make an explanation or statement under that section;
 (b)an investigator requires a person to give an explanation or further particulars or to give an answer to any question under section 183; or
 (c)an MA investigator requires a person to give an explanation or further particulars or give an answer to a question under section 184B, (Added 6 of 2014 s. 24)
 the authorized person or the investigator (as the case may be) shall ensure that the person has first been informed or reminded (as the case may be) of the limitations imposed by subsection (2) on the admissibility in evidence of the requirement and of the explanation or statement, the explanation or further particulars, or the question and answer (as the case may be).
 (2)Notwithstanding any other provisions of this Ordinance, where—
 (a)an authorized person within the meaning of section 179 requires a person to provide or make an explanation or statement under that section;
 (b)an investigator requires a person to give an explanation or further particulars or to give an answer to any question under section 183; or
 (c)an MA investigator requires a person to give an explanation or further particulars or give an answer to a question under section 184B, (Added 6 of 2014 s. 24)
 and the explanation or statement, the explanation or further particulars, or the answer (as the case may be) might tend to incriminate the person and the person so claims before providing or making the explanation or statement, giving the explanation or further particulars, or giving the answer (as the case may be), then the requirement as well as the explanation or statement, the explanation or further particulars, or the question and answer (as the case may be) shall not be admissible in evidence against the person in criminal proceedings in a court of law other than those in which the person is charged with an offence under section 179(13), (14) or (15), 184 or 184D, or under section 219(2)(a), 253(2)(a) or 254(6)(a) or (b), or under Part V of the Crimes Ordinance (Cap. 200), or for perjury, in respect of the explanation or statement, the explanation or further particulars, or the answer (as the case may be).
 (Amended 6 of 2014 s. 24)
 188.Lien claimed on records or documents
 Where the person in possession of any record or document required to be produced under this Part claims a lien on the record or document—
 (a)the requirement to produce the record or document shall not be affected by the lien;
 (b)no fees shall be payable for or in respect of the production; and
 (c)the production shall be without prejudice to the lien.
 189.Production of information in information systems, etc.
 Where any information or matter contained in any record or document required to be produced under this Part is recorded otherwise than in a legible form, any power conferred by this Part to require the production of the record or document includes the power to require the production of a reproduction of the recording of the information or matter or of the relevant part of it—
 (a)where the recording enables the information or matter to be reproduced in a legible form, in a legible form; and
 (b)where the information or matter is recorded in an information system, in a form which enables the information or matter to be reproduced in a legible form.
 190.Inspection of records or documents seized, etc.
 Where an authorized person within the meaning of section 179, 180 or 181 or an investigator or MA investigator has taken possession of any record or document under this Part, the authorized person or the investigator or MA investigator (as the case may be) shall, subject to any reasonable conditions he imposes as to security or otherwise, permit a person who would be entitled to inspect the record or document had he not taken possession of it under this Part, to inspect it and to make copies or otherwise record details of it at all reasonable times.
 (Amended 6 of 2014 s. 25)
 191.Magistrate’s warrants
 (1)If a magistrate is satisfied on information on oath laid by—
 (a)an employee of the Commission or, where the exercise of powers under section 180 is concerned, of the relevant authority within the meaning of that section; or
 (b)an authorized person within the meaning of section 179 or 180, or an investigator or MA investigator, (Amended 6 of 2014 s. 26)
 that there are reasonable grounds to suspect that there is, or is likely to be, on premises specified in the information any record or document which may be required to be produced under this Part, the magistrate may issue a warrant authorizing a person specified in the warrant, a police officer, and such other persons as may be necessary to assist in the execution of the warrant to—
 (i)enter the premises so specified, if necessary by force, at any time within the period of 7 days beginning on the date of the warrant; and
 (ii)search for, seize and remove any record or document which the person specified in the warrant or police officer has reasonable cause to believe may be required to be produced under this Part.
 (2)A person specified in, or a police officer or any other person authorized by, a warrant issued under subsection (1) may—
 (a)require any person on the premises specified in the warrant whom he has reasonable cause to believe to be employed in connection with a business which is, or which has been, conducted on the premises to produce for examination any record or document which is in the possession of the person and which he has reasonable cause to believe may be required to be produced under this Part;
 (b)prohibit any person found on the premises specified in the warrant from—
 (i)removing from the premises any record or document required to be produced under paragraph (a);
 (ii)erasing, adding to or otherwise altering an entry or other particulars contained in, or otherwise interfering in any manner with, or causing or permitting any other person to interfere with, the record or document;
 (c)take, in relation to any record or document required to be produced under paragraph (a), any other step which may appear necessary for preserving it and preventing interference with it.
 (3)Any record or document removed under this section may be retained for any period not exceeding 6 months beginning on the day of its removal or, where the record or document is or may be required for criminal proceedings or for any proceedings under this Ordinance, for such longer period as may be necessary for the purposes of those proceedings.
 (4)Where a person removes any record or document under this section, he shall as soon as reasonably practicable thereafter give a receipt for it, and he may permit any person who would be entitled to inspect it but for the removal to inspect the record or document and to make copies or otherwise record details of it at all reasonable times.
 (5)Section 102 of the Criminal Procedure Ordinance (Cap. 221) applies to any property which has by virtue of this section come into the possession of the Commission or the Monetary Authority or, where the exercise of powers under section 180 is concerned, of the relevant authority within the meaning of that section, as it applies to property which has come into the possession of the police. (Amended 6 of 2014 s. 26)
 (6)A person commits an offence if he—
 (a)without reasonable excuse, fails to comply with a requirement or prohibition under subsection (2); or
 (b)obstructs a person exercising a power conferred by subsection (2).
 (7)A person who commits an offence under subsection (6) is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 192.Destruction of documents, etc.
 (1)A person commits an offence if he destroys, falsifies, conceals or otherwise disposes of, or causes or permits the destruction, falsification, concealment or disposal of, any record or document required to be produced under this Part, with intent to conceal, from the person by whom the requirement to produce was imposed, facts or matters capable of being disclosed by the record or document.
 (2)A person who commits an offence under subsection (1) is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 Part IX
 Discipline, etc.
 (Format changes—E.R. 2 of 2012)
 Division 1Interpretation
 193.Interpretation of Part IX
 (1)In this Part, unless the context otherwise requires—
 Companies Register (公司登記冊) has the meaning given by section 2(1) of the Companies Ordinance (Cap. 622); (Added 28 of 2012 ss. 912 & 920)
 disciplinary power (紀律懲處權) means—
 ＃(a)in section 197A, a power that may be exercised by the Commission under section 197A(1); and
 (b)in Divisions 4 and 5, a power that may be exercised by the Monetary Authority under section 203A(1); (Added 6 of 2014 s. 27)
 misconduct (失當行為) means—
 (a)a contravention of any of the relevant provisions;
 (b)a contravention of any of the terms and conditions of any licence or registration under this Ordinance;
 (c)a contravention of any other condition imposed under or pursuant to any provision of this Ordinance, or of any condition attached or amended under section 71C(2)(b) or (9) or 71E(3) of the Banking Ordinance (Cap. 155); (Amended 16 of 2016 s. 9)
 (d)an act or omission relating to the carrying on of any regulated activity for which a person is licensed or registered which, in the opinion of the Commission, is or is likely to be prejudicial to the interest of the investing public or to the public interest; or (Amended 16 of 2016 s. 9)
 (e)an act or omission that—
 (i)relates to the carrying on of any activity, other than a regulated activity, that an intermediary may carry on for an open-ended fund company under this Ordinance; and
 (ii)in the opinion of the Commission, is or is likely to be prejudicial to the interest of the investing public or to the public interest, (Added 16 of 2016 s. 9)
 and guilty of misconduct (犯失當行為) shall be construed accordingly. (Amended 28 of 2012 ss. 912 & 920)
 (Amended 30 of 2004 s. 3; 28 of 2012 ss. 912 & 920)
 (2)In this Part, where an intermediary is, or was at any time, guilty of misconduct within the meaning of paragraph (a), (b), (c), (d) or (e) of the definition of misconduct in subsection (1) as a result of the commission of any conduct occurring with the consent or connivance of, or attributable to any neglect on the part of— (Amended 16 of 2016 s. 9)
 (a)in the case of a licensed corporation, another person as—
 (i)a responsible officer of the licensed corporation; or
 (ii)a person involved in the management of the business of the licensed corporation; or
 (b)in the case of a registered institution, another person as—
 (i)an executive officer of the registered institution; or
 (ii)a person involved in the management of the business constituting any regulated activity for which the registered institution is or was (as the case may be) registered,
 the conduct shall also be regarded as misconduct on the part of that other person, and guilty of misconduct shall also be construed accordingly.
 (3)For the purposes of paragraphs (d) and (e) of the definition of misconduct in subsection (1), the Commission shall not form any opinion that any act or omission is or is likely to be prejudicial to the interest of the investing public or to the public interest, unless it has had regard to such of the provisions set out in any code or guideline published under section 112ZR, any code of conduct published under section 169 or any code or guideline published under section 399 as are in force at the time of occurrence of, and applicable in relation to, the act or omission. (Amended 16 of 2016 s. 9)
 Editorial Note:
 # Not yet in operation. Please see paragraph (l) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015).
 Division 2Disciplinary Action by Commission
 (Replaced 6 of 2014 s. 28)
 194.Disciplinary action in respect of licensed persons, etc.
 (1)Subject to section 198, where—
 (a)a regulated person is, or was at any time, guilty of misconduct; or
 (b)the Commission is of the opinion that a regulated person is not a fit and proper person to be or to remain the same type of regulated person,
 the Commission may exercise such of the following powers as it considers appropriate in the circumstances of the case—
 (i)where the regulated person is a licensed person—
 (A)revoke his licence, whether in relation to all or any, or any part of all or any, of the regulated activities for which he is licensed; or
 (B)suspend his licence, whether in relation to all or any, or any part of all or any, of the regulated activities for which he is licensed for such period or until the occurrence of such event as the Commission may specify;
 (ii)where the regulated person is a responsible officer of a licensed corporation—
 (A)revoke the approval granted under section 126(1) in respect of him as such a responsible officer; or
 (B)suspend such approval for such period or until the occurrence of such event as the Commission may specify;
 (iii)publicly or privately reprimand the regulated person;
 (iv)prohibit the regulated person from doing all or any of the following in relation to such regulated activity or regulated activities, and for such period or until the occurrence of such event, as the Commission may specify—
 (A)applying to be licensed or registered;
 (B)applying to be approved under section 126(1) as a responsible officer of a licensed corporation;
 (C)applying to be given consent to act or continue to act as an executive officer of a registered institution under section 71C of the Banking Ordinance (Cap. 155);
 (D)seeking through a registered institution to have his name entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged by the registered institution in respect of a regulated activity.
 (2)Subject to sections 198 and 199, where—
 (a)a regulated person is, or was at any time, guilty of misconduct; or
 (b)the Commission is of the opinion that a regulated person is not a fit and proper person to be or to remain the same type of regulated person,
 the Commission may, separately or in addition to any power exercisable under subsection (1), order the regulated person to pay a pecuniary penalty not exceeding the amount which is the greater of—
 (i)$10,000,000; or
 (ii)3 times the amount of the profit gained or loss avoided by the regulated person as a result of his misconduct, or of his other conduct which leads the Commission to form the opinion (as the case may be).
 (3)The Commission, in determining whether a regulated person is a fit and proper person within the meaning of subsection (1)(b) or (2)(b), may, among other matters (including those specified in section 129), take into account such present or past conduct of the regulated person as it considers appropriate in the circumstances of the case.
 (4)A regulated person ordered to pay a pecuniary penalty under subsection (2) shall pay the penalty to the Commission within 30 days, or such further period as the Commission may specify by notice under section 198(3), after the order has taken effect as a specified decision under section 232.
 (5)The Court of First Instance may, on an application of the Commission made in the manner prescribed by rules made under section 397 for the purposes of this subsection, register an order made under subsection (2) in the Court of First Instance and the order shall, on registration, be regarded for all purposes as an order of the Court of First Instance made within the civil jurisdiction of the Court of First Instance for the payment of money.
 (6)Any pecuniary penalty paid to or recovered by the Commission pursuant to an order made under subsection (2) shall be paid by the Commission into the general revenue.
 (6A)Where the Commission exercises its power under subsection (1) or (2) against a regulated person, the Commission may disclose to the public details of the decision including the reasons for it and any material facts relating to the case. (Added 9 of 2012 s. 41)
 (7)In this section—
 regulated person (受規管人士) means a person who is or at the relevant time was any of the following types of person—
 (a)a licensed person;
 (b)a responsible officer of a licensed corporation; or
 (c)a person involved in the management of the business of a licensed corporation;
 relevant time (有關時間), in relation to a person, means—
 (a)where subsection (1)(a) or (2)(a) applies, the time when the person is, or was, guilty of misconduct; or
 (b)where subsection (1)(b) or (2)(b) applies, the time of occurrence of any matter which, whether with any other matter or not, leads the Commission to form the opinion that the person is not a fit and proper person within the meaning of such subsection.
 195.Other circumstances for disciplinary actions in respect of licensed persons, etc.
 (1)Subject to section 198, the Commission may revoke a licensed person’s licence, whether in relation to all or any, or any part of all or any, of the regulated activities for which he is licensed, or suspend a licensed person’s licence, whether in relation to all or any, or any part of all or any, of the regulated activities for which he is licensed for such period or until the occurrence of such event as the Commission may specify, if—
 (a)where the licensed person is an individual—
 (i)the licensed person enters into a voluntary arrangement with creditors, or has a bankruptcy order made against him, under the Bankruptcy Ordinance (Cap. 6);
 (ii)the licensed person fails to satisfy a levy of execution;
 (iii)the licensed person has been found by a court to be mentally incapacitated, or is detained in a mental hospital, under the Mental Health Ordinance (Cap. 136), which in the opinion of the Commission impugns the fitness and properness of the licensed person to remain licensed; or
 (iv)the licensed person is convicted of an offence (other than an offence under any of the relevant provisions) in Hong Kong or elsewhere, which in the opinion of the Commission impugns the fitness and properness of the licensed person to remain licensed;
 (b)where the licensed person is a corporation—
 (i)a receiver or manager of the property or business of the licensed person is appointed;
 (ii)the licensed person fails to satisfy a levy of execution;
 (iii)the licensed person enters into a compromise or scheme of arrangement with its creditors;
 (iv)the licensed person goes into liquidation or is ordered to be wound up;
 (v)the licensed person is convicted of an offence (other than an offence under any of the relevant provisions) in Hong Kong or elsewhere, which in the opinion of the Commission impugns the fitness and properness of the licensed person to remain licensed;
 (vi)any of the directors of the licensed person has been found by a court to be mentally incapacitated, or is detained in a mental hospital, under the Mental Health Ordinance (Cap. 136), which in the opinion of the Commission impugns the fitness and properness of the licensed person to remain licensed; or
 (vii)any of the directors of the licensed person is convicted of an offence (other than an offence under any of the relevant provisions) in Hong Kong or elsewhere, which in the opinion of the Commission impugns the fitness and properness of the licensed person to remain licensed;
 (c)the licensed person does not carry on the regulated activity or regulated activities, or the part of regulated activity or regulated activities, to which the revocation or suspension (as the case may be) relates; or
 (d)the licensed person requests the Commission to so revoke or suspend the licence.
 (2)Subject to section 198, but without limiting the generality of subsection (1), the Commission may revoke a licensed person’s licence in relation to Type 7 regulated activity or any part thereof if—
 (a)the Commission has required under section 118(1)(c) that the licensed person should apply for an authorization under section 95(2) for that regulated activity; and
 (b)(i)the licensed person has failed to make an application for the authorization under section 95(2) in accordance with the requirement, or has otherwise informed the Commission that he proposes not to make an application for the authorization under section 95(2); or
 (ii)the licensed person has made an application for the authorization under section 95(2), but the application is not granted.
 (3)A licence shall be deemed to be revoked if—
 (a)where the licensed person is an individual, the licensed person dies; or
 (b)where the licensed person is a corporation, the licensed person is wound up, struck off the Companies Register or is otherwise dissolved. (Amended 28 of 2012 ss. 912 & 920)
 (4)Subject to subsection (5), a licence shall be deemed to be suspended if—
 (a)the licensed person fails to make full payment of any annual fee payable by him under section 138, or any additional sum payable by him under that section as a result of any default in making full payment of any annual fee payable by him under that section, within 3 months after the due date for payment of the annual fee under that section; or
 (b)the licensed person fails to submit an annual return required to be submitted by him under section 138 within 3 months after the due date for submission of the annual return under that section,
 and, subject to subsection (6), the suspension shall remain in force until such time as the Commission considers it appropriate that the licence should no longer be suspended and informs the licensed person to that effect by notice in writing.
 (5)A licence shall not be regarded as suspended under subsection (4) unless and until—
 (a)in the case of a suspension under subsection (4)(a) by reference to any failure to make full payment of any annual fee or additional sum, the Commission has, by notice in writing given not less than 10 business days before the suspension is to take effect, informed the licensed person of the requirement to make full payment of the annual fee or additional sum (as the case may be), and of the consequence of the failure to comply with the requirement under this section; or
 (b)in the case of a suspension under subsection (4)(b) by reference to any failure to submit an annual return, the Commission has, by notice in writing given not less than 10 business days before the suspension is to take effect, informed the licensed person of the requirement to submit the annual return, and of the consequence of the failure to comply with the requirement under this section.
 (6)Where a licence is suspended under subsection (4) and the event described in subsection (4)(a) or (b) (as the case may be) has not been remedied within 30 days after the day on which the suspension becomes effective under subsection (4), or such further period as the Commission may specify by notice in writing to the licensed person, the licence shall be deemed to be revoked.
 (7)Subject to section 198, where a person who is a responsible officer of a licensed corporation is convicted of an offence (other than an offence under any of the relevant provisions) in Hong Kong or elsewhere, which in the opinion of the Commission impugns the fitness and properness of the person to remain such a responsible officer, the Commission may—
 (a)revoke the approval granted under section 126(1) in respect of the person as such a responsible officer; or
 (b)suspend such approval for such period or until the occurrence of such event as the Commission may specify.
 196.Disciplinary action in respect of registered institutions, etc.
 (1)Subject to section 198, where—
 (a)a regulated person is, or was at any time, guilty of misconduct; or
 (b)the Commission is of the opinion that a regulated person is not a fit and proper person to be or to remain the same type of regulated person,
 the Commission may exercise such of the following powers as it considers appropriate in the circumstances of the case—
 (i)where the regulated person is a registered institution—
 (A)revoke its registration, whether in relation to all or any, or any part of all or any, of the regulated activities for which it is registered; or
 (B)suspend its registration, whether in relation to all or any, or any part of all or any, of the regulated activities for which it is registered for such period or until the occurrence of such event as the Commission may specify;
 (ii)publicly or privately reprimand the regulated person;
 (iii)prohibit the regulated person from doing all or any of the following in relation to such regulated activity or regulated activities, and for such period or until the occurrence of such event, as the Commission may specify—
 (A)applying to be licensed or registered;
 (B)applying to be approved under section 126(1) as a responsible officer of a licensed corporation;
 (C)applying to be given consent to act or continue to act as an executive officer of a registered institution under section 71C of the Banking Ordinance (Cap. 155);
 (D)seeking through a registered institution to have his name entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged by the registered institution in respect of a regulated activity.
 (2)Subject to sections 198 and 199, where—
 (a)a regulated person is, or was at any time, guilty of misconduct; or
 (b)the Commission is of the opinion that a regulated person is not a fit and proper person to be or to remain the same type of regulated person,
 the Commission may, separately or in addition to any power exercisable under subsection (1), order the regulated person to pay a pecuniary penalty not exceeding the amount which is the greater of—
 (i)$10,000,000; or
 (ii)3 times the amount of the profit gained or loss avoided by the regulated person as a result of his misconduct, or of his other conduct which leads the Commission to form the opinion (as the case may be).
 (3)The Commission, in determining whether a regulated person is a fit and proper person within the meaning of subsection (1)(b) or (2)(b), may, among other matters (including those specified in section 129), take into account such present or past conduct of the regulated person as it considers appropriate in the circumstances of the case.
 (4)A regulated person ordered to pay a pecuniary penalty under subsection (2) shall pay the penalty to the Commission within 30 days, or such further period as the Commission may specify by notice under section 198(3), after the order has taken effect as a specified decision under section 232.
 (5)The Court of First Instance may, on an application of the Commission made in the manner prescribed by rules made under section 397 for the purposes of this subsection, register an order made under subsection (2) in the Court of First Instance and the order shall, on registration, be regarded for all purposes as an order of the Court of First Instance made within the civil jurisdiction of the Court of First Instance for the payment of money.
 (6)Any pecuniary penalty paid to or recovered by the Commission pursuant to an order made under subsection (2) shall be paid by the Commission into the general revenue.
 (6A)Where the Commission exercises its power under subsection (1) or (2) against a regulated person, the Commission may disclose to the public details of the decision including the reasons for it and any material facts relating to the case. (Added 9 of 2012 s. 42)
 (7)Without prejudice to the exercise by the Monetary Authority of any powers under the Banking Ordinance (Cap. 155), the Commission may make such recommendations to the Monetary Authority in respect of the exercise by the Monetary Authority of any of his powers under sections 58A(1) and 71C(4) of that Ordinance as the Commission considers appropriate.
 (8)In this section—
 regulated person (受規管人士) means a person who is or at the relevant time was any of the following types of person—
 (a)a registered institution;
 (b)an executive officer of a registered institution;
 (c)a person involved in the management of the business constituting any regulated activity for which a registered institution is or was (as the case may be) registered; or
 (d)an individual whose name is or was (as the case may be) entered in the register maintained by the Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) as that of a person engaged by a registered institution in respect of a regulated activity;
 relevant time (有關時間), in relation to a person, means—
 (a)where subsection (1)(a) or (2)(a) applies, the time when the person is, or was, guilty of misconduct; or
 (b)where subsection (1)(b) or (2)(b) applies, the time of occurrence of any matter which, whether with any other matter or not, leads the Commission to form the opinion that the person is not a fit and proper person within the meaning of such subsection.
 197.Other circumstances for disciplinary action in respect of registered institutions, etc.
 (1)Subject to section 198, the Commission may revoke a registered institution’s registration, whether in relation to all or any, or any part of all or any, of the regulated activities for which it is registered, or suspend a registered institution’s registration, whether in relation to all or any, or any part of all or any, of the regulated activities for which it is registered for such period or until the occurrence of such event as the Commission may specify—
 (a)if—
 (i)a receiver or manager of the property or business of the registered institution is appointed;
 (ii)the registered institution fails to satisfy a levy of execution;
 (iii)the registered institution enters into a compromise or scheme of arrangement with its creditors;
 (iv)the registered institution goes into liquidation or is ordered to be wound up;
 (v)the registered institution is convicted of an offence (other than an offence under any of the relevant provisions) in Hong Kong or elsewhere, which in the opinion of the Commission impugns the fitness and properness of the registered institution to remain registered;
 (b)if the registered institution does not carry on the regulated activity or regulated activities, or the part of regulated activity or regulated activities, to which the revocation or suspension (as the case may be) relates; or
 (c)if the registered institution requests the Commission to so revoke or suspend the registration.
 (2)Subject to section 198, but without limiting the generality of subsection (1), the Commission may revoke a registered institution’s registration in relation to Type 7 regulated activity or any part thereof if—
 (a)the Commission has required under section 119(8)(b) that the registered institution should apply for an authorization under section 95(2) for that regulated activity; and
 (b)(i)the registered institution has failed to make an application for the authorization under section 95(2) in accordance with the requirement, or has otherwise informed the Commission that it proposes not to make an application for the authorization under section 95(2); or
 (ii)the registered institution has made an application for the authorization under section 95(2), but the application is not granted.
 (3)The registration of a registered institution shall be deemed to be revoked if—
 (a)the registered institution ceases to be an authorized financial institution; or
 (b)the registered institution is wound up, struck off the Companies Register or is otherwise dissolved. (Amended 28 of 2012 ss. 912 & 920)
 (4)Subject to subsection (5), the registration of a registered institution shall be deemed to be suspended if the registered institution fails to make full payment of any annual fee payable by it under section 138, or any additional sum payable by it under that section as a result of any default in making full payment of any annual fee payable by it under that section, within 3 months after the due date for payment of the annual fee under that section, and, subject to subsection (6), the suspension shall remain in force until such time as the Commission considers it appropriate that the registration should no longer be suspended and informs the registered institution to that effect by notice in writing.
 (5)Any registration shall not be regarded as suspended under subsection (4) by reference to any failure to make full payment of any annual fee or additional sum, unless and until the Commission has, by notice in writing given not less than 10 business days before the suspension is to take effect, informed the registered institution of the requirement to make full payment of the annual fee or additional sum (as the case may be), and of the consequence of the failure to comply with the requirement under this section.
 (6)Where any registration is suspended under subsection (4) and the failure to make full payment of the annual fee or additional sum described in that subsection has not been remedied within 30 days after the day on which the suspension becomes effective under that subsection, or such further period as the Commission may specify by notice in writing to the registered institution, the registration shall be deemed to be revoked.
 Division 3Miscellaneous Provisions Relating to Division 2
 (Amended 6 of 2014 s. 30)
 198.Procedural requirements in respect of exercise of powers under Division 2
 (Amended 6 of 2014 s. 31)
 (1)The Commission shall not exercise any power under section 194(1) or (2), 195(1)(a), (b) or (c), (2) or (7), 196(1) or (2) or 197(1)(a) or (b) or (2) without first giving the person in respect of whom the power is to be exercised a reasonable opportunity of being heard.
 (2)The Commission shall not exercise any power under section 196(1) or (2) or 197(1) or (2) unless it has first consulted the Monetary Authority.
 (3)Where the Commission decides to exercise any power under section 194(1) or (2), 195(1), (2) or (7), 196(1) or (2) or 197(1) or (2), the Commission shall inform the person in respect of whom the power is exercised of its decision to do so by notice in writing, and the notice shall include—
 (a)a statement of the reasons for which the decision is made;
 (b)the time at which the decision is to take effect;
 (c)in so far as applicable, the duration and terms of any revocation, suspension or prohibition to be imposed under the decision;
 (d)in so far as applicable, the terms in which the person is to be reprimanded under the decision; and
 (e)in so far as applicable, the amount of any pecuniary penalty to be imposed under the decision and the period (being specified as a period after the decision has taken effect as a specified decision under section 232) within which it is required to be paid.
 199.Guidelines for performance of functions under section 194(2) or 196(2)
 (1)The Commission shall not perform any of its functions under section 194(2) or 196(2) unless—
 (a)it has published, in the Gazette and in any other manner it considers appropriate, guidelines to indicate the manner in which it proposes to perform such functions; and
 (b)in performing such functions, it has had regard to the guidelines so published.
 (2)Without prejudice to the inclusion of any other factors that the Commission may consider relevant, guidelines published under subsection (1) shall include the following as factors that the Commission shall take into account in performing any of its functions under section 194(2) or 196(2)—
 (a)whether the conduct of the regulated person in question was intentional, reckless or negligent;
 (b)whether the conduct damaged the integrity of the securities and futures market;
 (c)whether the conduct caused loss to, or imposed costs on, any other person; and
 (d)whether the conduct resulted in a benefit to the regulated person or any other person.
 (3)Guidelines published under subsection (1) are not subsidiary legislation.
 200.Effect of suspension under Division 2 or 3
 (Amended 6 of 2014 s. 33)
 (1)If a licence of a person is suspended under section 194 or 195 in relation to all or any, or any part of all or any, of the regulated activities for which the person is licensed, then, without prejudice to any provision of this Ordinance which has application in relation to the suspension, the person shall, during the period of the suspension—
 (a)continue to be regarded for the purposes of the provisions of this Ordinance, but not section 114, to be licensed for the regulated activity or regulated activities, or the part of regulated activity or regulated activities, to which the suspension relates; and
 (b)without limiting the generality of paragraph (a), continue to be required to comply with such provisions of this Ordinance relating to a licensed person as would apply to the person were the licence not so suspended.
 (2)If an approval of a person as a responsible officer of a licensed corporation is suspended under section 194 or 195, then, without prejudice to any provision of this Ordinance which has application in relation to the suspension, the person shall, during the period of the suspension—
 (a)continue to be regarded for the purposes of the provisions of this Ordinance, but not sections 118 and 125, to be such a responsible officer; and
 (b)without limiting the generality of paragraph (a), continue to be required to comply with such provisions of this Ordinance relating to a responsible officer as would apply to the person were the approval not so suspended.
 (3)If any registration of a person is suspended under section 196 or 197 in relation to all or any, or any part of all or any, of the regulated activities for which the person is registered, then, without prejudice to any provision of this Ordinance which has application in relation to the suspension, the person shall, during the period of the suspension—
 (a)continue to be regarded for the purposes of the provisions of this Ordinance, but not section 114, to be registered for the regulated activity or regulated activities, or the part of regulated activity or regulated activities, to which the suspension relates; and
 (b)without limiting the generality of paragraph (a), continue to be required to comply with such provisions of this Ordinance relating to a registered institution as would apply to the person were the registration not so suspended.
 (4)A licence of a person may be revoked under section 194 or 195 notwithstanding that, at the time of revocation, the licence is suspended, whether in relation to all or any, or any part of all or any, of the regulated activities for which the person is licensed, under any provision of this Ordinance.
 (5)An approval of a person as a responsible officer of a licensed corporation may be revoked under section 194 or 195 notwithstanding that, at the time of revocation, the approval is suspended under any provision of this Ordinance.
 (6)Any registration of a person may be revoked under section 196 or 197 notwithstanding that, at the time of revocation, the registration is suspended, whether in relation to all or any, or any part of all or any, of the regulated activities for which the person is registered, under any provision of this Ordinance.
 201.General provisions relating to exercise of powers under Division 2 or 3
 (Amended 6 of 2014 s. 34)
 (1)In reaching a decision under section 194(1) or (2), 195(1), (2) or (7), 196(1) or (2) or 197(1) or (2), the Commission may have regard to any information or material in its possession which is relevant to the decision, regardless of how the information or material has come into its possession.
 (2)The revocation or suspension of any licence or registration under Division 2 or 3 does not operate so as to—  (Amended 6 of 2014 s. 34)
 (a)avoid or affect an agreement, transaction or arrangement entered into by the licensed person or registered institution (as the case may be) whether the agreement, transaction or arrangement was entered into before or after the revocation or suspension;
 (b)affect a right, obligation or liability arising under the agreement, transaction or arrangement.
 (3)Where at any time the Commission is contemplating exercising any power in respect of a person under section 194(1) or (2), 195(1)(a), (b) or (c), (2) or (7), 196(1) or (2) or 197(1)(a) or (b) or (2), it may, where it considers it appropriate to do so in the interest of the investing public or in the public interest, by agreement with the person—
 (a)exercise any power the Commission may exercise in respect of the person under this Part (whether or not the same as the power the exercise of which has been contemplated); and
 (b)take such additional action as it considers appropriate in the circumstances of the case.
 (4)Where the Commission exercises any power or takes any additional action in respect of a person under subsection (3)—
 (a)it shall comply with section 198(2) and (3), as if section 198(2) and (3), in addition to applying to the exercise of power under the sections specified therein, also applies with necessary modifications to the taking of any additional action under subsection (3); and
 (b)subject to the agreement of the person, it is not obliged to comply with section 198(1).
 #(5)Nothing in this Part affects the power of the Court of First Instance to make any order or exercise any other power under or pursuant to section 101F, 101Y, 211, 212, 213, 214, 214A or 214B. (Amended 6 of 2014 s. 34; 16 of 2016 s. 10)
 Editorial Note:
 # The amendment to section 201(5) by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) has come into operation on 10 July 2015, except in so far as it relates to the new section 101Y of the Ordinance. Please see paragraph (o) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015).
 202.Requirement to transfer records upon revocation or suspension of licence or registration
 (1)Where any licence or registration is revoked or suspended under Division 2 or 3, the Commission may by notice in writing require the person to whom the licence or registration (as the case may be) was granted to transfer to, or to the order of, his client such records relating to client assets or to the affairs of the client held at any time for the client, in such manner, as the Commission may reasonably specify in the notice. (Amended 6 of 2014 s. 35)
 (2)A person who, without reasonable excuse, fails to comply with a requirement imposed on him under subsection (1) commits an offence and is liable on conviction to a fine of $200,000 and to imprisonment for 2 years.
 (3)In this section, client (客戶), in relation to a person referred to in subsection (1), means any person who, at any time when the first-mentioned person was an intermediary, was a client of the first-mentioned person under the definition of client in section 1 of Part 1 of Schedule 1.
 203.Permission to carry on business operations upon revocation or suspension of licence or registration
 (1)If the licence or registration of an intermediary is revoked, the Commission may by notice in writing permit the intermediary to carry on business operations connected with a revoked activity that are essential for closing down the business of the revoked activity. (Replaced 19 of 2015 s. 25)
 (1A)An individual named by the Commission in the notice given under subsection (1) may carry on the business operations referred to in that subsection for and on behalf of the intermediary. (Added 19 of 2015 s. 25)
 (1B)For the purpose of subsection (1A), the Commission may name in the notice only an individual who is or, immediately before the revocation, was—
 (a)for the revocation of the licence of a licensed corporation—
 (i)a responsible officer of the licensed corporation; or
 (ii)a licensed representative accredited to the licensed corporation;
 (b)for the revocation of the registration of a registered institution—
 (i)an executive officer of the registered institution to whom the Monetary Authority has or had given consent under section 71C(1) of the Banking Ordinance (Cap. 155); or
 (ii)a registered individual engaged by the registered institution. (Added 19 of 2015 s. 25)
 (1C)If the licence or registration of an intermediary is suspended, the Commission may by notice in writing permit the intermediary to carry on business operations connected with a suspended activity that are essential for protecting the interests of the clients of the intermediary. (Added 19 of 2015 s. 25)
 (1D)An individual named by the Commission in the notice given under subsection (1C) may carry on the business operations referred to in that subsection for and on behalf of the intermediary. (Added 19 of 2015 s. 25)
 (1E)For the purpose of subsection (1D), the Commission may name in the notice only an individual who is—
 (a)for the suspension of the licence of a licensed corporation—
 (i)a responsible officer of the licensed corporation; or
 (ii)a licensed representative accredited to the licensed corporation;
 (b)for the suspension of the registration of a registered institution—
 (i)an executive officer of the registered institution to whom the Monetary Authority has given consent under section 71C(1) of the Banking Ordinance (Cap. 155); or
 (ii)a registered individual engaged by the registered institution. (Added 19 of 2015 s. 25)
 (1F)The Commission may, on granting a permission under subsection (1) or (1C), impose any condition that the Commission thinks fit by specifying the condition in the notice given under that subsection. (Added 19 of 2015 s. 25)
 (2)Notwithstanding section 200(1), where the Commission has granted a permission to an intermediary under subsection (1) or (1C), the intermediary and the individuals named in the notice given under that subsection are not, because of their carrying on business operations in accordance with the permission, regarded as having contravened section 114.
 (2A)When carrying on business operations in accordance with a permission granted under subsection (1)—
 (a)despite the revocation of the licence or registration of the intermediary—
 (i)it is deemed that the licence or registration of the intermediary in relation to the revoked activity is not revoked;
 (ii)an individual referred to in subsection (1B)(a)(i) is deemed to be a responsible officer of the intermediary approved in relation to the revoked activity;
 (iii)an individual referred to in subsection (1B)(a)(ii) is deemed to be a licensed representative accredited to, and licensed to carry on the revoked activity for, the intermediary;
 (iv)an individual referred to in subsection (1B)(b)(i) is deemed to be an executive officer of the intermediary to whom the Monetary Authority has given consent under section 71C(1) of the Banking Ordinance (Cap. 155) in relation to the revoked activity; and
 (v)an individual referred to in subsection (1B)(b)(ii) is deemed to be a registered individual engaged by the intermediary in relation to the revoked activity; and
 (b)any of the relevant provisions that apply to or in relation to an intermediary, responsible officer, licensed representative, executive officer or registered individual (as the case may be) apply accordingly to or in relation to the intermediary and individuals. (Added 19 of 2015 s. 25)
 (2B)When carrying on business operations in accordance with a permission granted under subsection (1C)—
 (a)despite the suspension of the licence or registration of the intermediary—
 (i)it is deemed that the licence or registration of the intermediary in relation to the suspended activity is not suspended;
 (ii)an individual referred to in subsection (1E)(a)(i) continues to act in the capacity of or is deemed to be (as the case requires) a responsible officer of the intermediary approved in relation to the suspended activity;
 (iii)an individual referred to in subsection (1E)(a)(ii) continues to act in the capacity of or is deemed to be (as the case requires) a licensed representative accredited to, and licensed to carry on the suspended activity for, the intermediary;
 (iv)an individual referred to in subsection (1E)(b)(i) continues to act in the capacity of or is deemed to be (as the case requires) an executive officer of the intermediary to whom the Monetary Authority has given consent under section 71C(1) of the Banking Ordinance (Cap. 155) in relation to the suspended activity; and
 (v)an individual referred to in subsection (1E)(b)(ii) continues to act in the capacity of or is deemed to be (as the case requires) a registered individual engaged by the intermediary in relation to the suspended activity; and
 (b)any of the relevant provisions that apply to or in relation to an intermediary, responsible officer, licensed representative, executive officer or registered individual (as the case may be) apply accordingly to or in relation to the intermediary and individuals. (Added 19 of 2015 s. 25)
 (3)Any permission granted under subsection (1) or (1C), and the imposition of conditions pursuant to subsection (1F), take effect at the time of the service of the notice given in respect thereof or at the time specified in the notice, whichever is the later.
 (4)In this section—
 intermediary (中介人) includes—
 (a)a corporation the licence of which has been revoked or suspended; and
 (b)an authorized financial institution the registration of which has been revoked or suspended;
 registered individual (登記個人), in relation to a registered institution, means an individual whose name is entered in the register maintained by the Monetary Authority under section 20(1)(ea) of the Banking Ordinance (Cap. 155) as that of a person engaged by the registered institution;
 revoke (撤銷), in relation to the licence or registration of an intermediary, means revoke under Division 2 or 3, whether in relation to all or any, or any part of all or any, of the regulated activities for which the intermediary is licensed or registered;
 revoked activity (撤銷活動), in relation to the revocation of a licence or registration, means any of the regulated activities, or any part of any of the regulated activities, in relation to which the licence or registration has been revoked;
 suspend (暫時吊銷、暫時撤銷), in relation to the licence or registration of an intermediary, means suspend under Division 2 or 3, whether in relation to all or any, or any part of all or any, of the regulated activities for which the intermediary is licensed or registered;
 suspended activity (暫時吊銷活動、暫時撤銷活動), in relation to the suspension of a licence or registration, means any of the regulated activities, or any part of any of the regulated activities, in relation to which the licence or registration has been suspended. (Added 19 of 2015 s. 25)
 (Amended 19 of 2015 s. 25)
 Division 4Disciplinary Action by Monetary Authority#
 (Division 4 added 6 of 2014 s. 37)
 Editorial Note:
 # The new Division 4 of Part IX added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) came into operation on—
 (a)  10 July 2015, in so far as it relates to the contravention of the reporting obligation and the record keeping obligation; please see paragraph (q)(i) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015); and
 (b)  1 September 2016, in so far as it relates to the contravention of the clearing obligation; please see paragraph (d) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2016 (L.N. 27 of 2016).
 203A.Disciplinary action by Monetary Authority
 (1)If an authorized financial institution or an approved money broker contravenes an obligation, the Monetary Authority may exercise, in respect of a person who is subject to disciplinary action, one or more of the following powers as the Monetary Authority considers appropriate in the circumstances of the case—
 (a)publicly or privately reprimand the person;
 (b)prohibit the person, for a period, or until the occurrence of an event, specified by the Monetary Authority—
 (i)from continuing to carry on the business of OTC derivative transactions, if at the time the power is exercised the person is carrying on that business; or
 (ii)from carrying on the business of OTC derivative transactions, if at that time the person is not carrying on that business;
 (c)order the person to pay a pecuniary penalty not exceeding the amount that is the greater of the following—
 (i)$10,000,000;
 (ii)3 times the amount of the profit gained, or loss avoided, by the person as a result of the contravention.
 (2)The exercise of the disciplinary power—
 (a)under subsection (1)(a) and (b) is subject to section 203B; and
 (b)under subsection (1)(c) is subject to sections 203B and 203C.
 (3)If the Monetary Authority exercises a disciplinary power, the Monetary Authority may disclose to the public details of the decision including the reasons for it and any material facts relating to the case.
 (4)The Monetary Authority may, in reaching a decision to exercise a disciplinary power, have regard to any information or material in the Monetary Authority’s possession that is relevant to the decision, regardless of how it came into the Monetary Authority’s possession.
 (5)For the purposes of subsection (1), the persons who are subject to disciplinary action are—
 (a)a person that is, or was, an authorized financial institution at the time of a contravention;
 (b)in relation to a contravention by a person referred to in paragraph (a), a person who is, or was, involved in the management of the business of OTC derivative transactions of the authorized financial institution at the time of the contravention;
 (c)a person that is, or was, an approved money broker at the time of a contravention; and
 (d)in relation to a contravention by a person referred to in paragraph (c), a person who is, or was, involved in the management of the business of OTC derivative transactions of the approved money broker at the time of the contravention.
 (6)In this section—
 contravention (違責) means a contravention of an obligation;
 obligation (責任) means the reporting obligation, clearing obligation, trading obligation or record keeping obligation.
 Division 5Miscellaneous Provisions Relating to Division 4#
 (Division 5 added 6 of 2014 s. 37)
 Editorial Note:
 # The new Division 5 of Part IX added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) has come into operation on 10 July 2015, except in so far as it relates to the new section 101Y referred to in the new section 203D(3) of the Ordinance. Please see paragraph (q)(ii) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015).)
 203B.Procedural requirements for exercise of disciplinary powers
 (1)The Monetary Authority must not exercise a disciplinary power without first giving the person who is proposed to be disciplined a reasonable opportunity of being heard.
 (2)If the Monetary Authority decides to exercise a disciplinary power, the Monetary Authority must inform the person who is to be disciplined of the decision by a written notice.
 (3)The notice must state—
 (a)the reasons for the decision;
 (b)when the decision is to take effect;
 (c)in relation to a decision to reprimand, the terms in which the person is to be reprimanded;
 (d)in relation to a decision to prohibit a person from continuing to carry on, or carrying on, the business of OTC derivative transactions, the duration and other terms of the prohibition; and
 (e)in relation to a decision to impose a pecuniary penalty—
 (i)the amount of the penalty; and
 (ii)the period after the decision has taken effect as a specified decision under section 232 within which it is required to be paid.
 203C.Guidelines for performance of functions under section 203A(1)(c)
 (1)The Monetary Authority must publish guidelines indicating the manner in which the Monetary Authority proposes to exercise the disciplinary power to order a pecuniary penalty.
 (2)The guidelines must be published—
 (a)in the Gazette; and
 (b)in any other manner that the Monetary Authority considers appropriate.
 (3)Without limiting subsection (1), guidelines published under subsection (2)—
 (a)may include any factor that the Monetary Authority considers relevant to the exercise of the disciplinary power to order a pecuniary penalty; and
 (b)must include the following as factors that the Monetary Authority must take into account when exercising that power—
 (i)whether the conduct of the person in respect of whom the power is being exercised was intentional, reckless or negligent;
 (ii)whether the conduct of that person damaged the integrity of the securities and futures market or was potentially damaging or detrimental to the integrity of the securities and futures market or the financial stability of Hong Kong;
 (iii)whether the conduct of that person caused loss to, or imposed costs on, any other person;
 (iv)whether the conduct of that person resulted in a benefit to that person or any other person.
 (4)The Monetary Authority—
 (a)may exercise the disciplinary power to order a pecuniary penalty only after guidelines have been published; and
 (b)must have regard to the published guidelines when exercising a disciplinary power to order a pecuniary penalty.
 (5)The Monetary Authority may amend any guideline published under this section in a manner consistent with the power to publish guidelines and the other provisions of this section apply to any such amendment as they apply to the guideline.
 (6)A failure on the part of a person to comply with a guideline does not by itself render that person liable to any judicial or other proceedings, but in any proceedings under this Ordinance before a court—
 (a)the guideline is admissible in evidence; and
 (b)if any guideline appears to the court to be relevant to a question arising in any proceedings, it must be taken into account in determining that question.
 (7)Guidelines published under this section are not subsidiary legislation.
 (8)A reference to a guideline is a reference to that guideline as amended from time to time under this section.
 203D.General provisions relating to exercise of powers under Division 4
 (1)If the Monetary Authority is contemplating the exercise of a disciplinary power, the Monetary Authority may, if the Monetary Authority considers it appropriate to do so in the interests of the investing public or in the public interest, with the agreement of the person proposed to be disciplined—
 (a)exercise a disciplinary power (not necessarily the disciplinary power that was contemplated); and
 (b)take any other action the Monetary Authority considers appropriate in the circumstances of the case (additional action).
 (2)If the Monetary Authority exercises a disciplinary power or takes any additional action under subsection (1), the Monetary Authority—
 (a)must comply with section 203B(2) and (3) as if section 203B(2) and (3) applied, with necessary modifications, to the taking of additional action; and
 (b)subject to the agreement of the person proposed to be disciplined, is not obliged to comply with section 203B(1).
 #(3)Nothing in this Division or Division 4 affects the power of the Court of First Instance to make an order or exercise any other power under or pursuant to section 101G, 101Y or 203F.
 Editorial Note:
 # The new Division 5 of Part IX added by the Securities and Futures (Amendment) Ordinance 2014 (6 of 2014) has come into operation on 10 July 2015, except in so far as it relates to the new section 101Y referred to in the new section 203D(3) of the Ordinance. Please see paragraph (q)(ii) of the Securities and Futures (Amendment) Ordinance 2014 (Commencement) Notice 2015 (L.N. 95 of 2015).)
 203E.Recovery and payment of pecuniary penalty
 (1)If a person is ordered to pay a pecuniary penalty in the exercise of a disciplinary power, the person must pay it to the Monetary Authority within—
 (a)30 days after the order has taken effect as a specified decision under section 232; or
 (b)a longer period specified in the notice referred to in section 203B(2), after the order has taken effect as a specified decision under section 232.
 (2)The Court of First Instance may, on an application made by the Monetary Authority, register the order in the Court of First Instance.
 (3)An application under subsection (2) must be made by producing to the Registrar of the High Court a notice in writing requesting that the order be registered, together with the order and a copy of the order.
 (4)On registration, the order is to be regarded for all purposes as an order of the Court of First Instance made within its civil jurisdiction for the payment of money.
 (5)The Monetary Authority must pay a pecuniary penalty paid to or recovered by the Monetary Authority under an order made under this section into the general revenue.
 203F.Application to Court of First Instance relating to non-compliance with prohibition under section 203A
 (1)If a person fails to comply with a prohibition in force in respect of the person as a result of the exercise of a power under section 203A(1)(b), the Monetary Authority may, by originating summons, make an application to the Court of First Instance in respect of the failure.
 (2)The Court of First Instance may inquire into the case and if satisfied that—
 (a)there is no reasonable excuse for the person not to comply with the prohibition, order the person to comply with the prohibition within the period specified by the Court; and
 (b)the failure was without reasonable excuse, punish the person, and any other person knowingly involved in the failure, in the same manner as if the person and, if applicable, the other person, had been guilty of contempt of court.
 (3)If there is a reasonable likelihood that a person will fail to comply with a prohibition in force in respect of the person as a result of the exercise of a power under section 203A(1)(b), the Monetary Authority may, by originating summons, apply to the Court of First Instance for an order that—
 (a)the person take such action or refrain from taking such action as the Court directs; and
 (b)any other person whom the Court is satisfied is able to procure the person to comply with the prohibition, take such action or refrain from taking such action as the Court directs.
 (4)An originating summons under this section must be in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 Part X
 Powers of Intervention and Proceedings
 (Format changes—E.R. 2 of 2012)
 Division 1Powers of intervention
 204.Restriction of business
 (1)Subject to section 207, the Commission may by notice in writing—
 (a)prohibit a licensed corporation from—
 (i)entering into transactions of a specified description or other than of a specified description, or entering into transactions in specified circumstances or other than in specified circumstances, or entering into transactions to a specified extent or other than to a specified extent;
 (ii)soliciting business from persons of a specified description or from persons other than of a specified description;
 (iii)carrying on business in a specified manner or other than in a specified manner;
 (b)require a licensed corporation to carry on business in, and only in, a specified manner.
 (2)A prohibition or requirement imposed on a licensed corporation under this section may relate to either or both of the following—
 (a)transactions entered into in connection with the business which constitutes a regulated activity for which the licensed corporation is licensed;
 (b)transactions entered into in connection with any other business which is carried on by the licensed corporation in connection with the business which constitutes a regulated activity for which it is licensed.
 205.Restriction on dealing with property
 (1)Subject to section 207, the Commission may by notice in writing—
 (a)prohibit a licensed corporation—
 (i)from—
 (A)disposing of any relevant property;
 (B)dealing with any relevant property in a specified manner or other than in a specified manner;
 (ii)from assisting, counselling or procuring another person to—
 (A)dispose of any relevant property;
 (B)deal with any relevant property in a specified manner or other than in a specified manner;
 (b)require a licensed corporation to deal with any relevant property in, and only in, a specified manner.
 (2)
 In this section, relevant property (有關財產), in relation to a licensed corporation, means—
 (a)any property held by the licensed corporation, acting within the capacity for which the licensed corporation is licensed, on behalf of any of the clients of the licensed corporation, or held by any other person on behalf or to the order of the licensed corporation acting within such capacity;
 (b)any other property which the Commission reasonably believes to be owned or controlled by the licensed corporation.
 206.Maintenance of property
 (1)Subject to section 207, the Commission may by notice in writing require a licensed corporation to maintain property in Hong Kong and in any specified place outside Hong Kong such that—
 (a)the property maintained is of the value and of the description that appear to the Commission to be desirable with a view to ensuring that the licensed corporation will be able to meet its liabilities in relation to the business which constitutes a regulated activity for which it is licensed; and
 (b)the property is maintained in a manner that will enable the licensed corporation at any time freely to transfer or otherwise dispose of the property.
 (2)The Commission may in any requirement imposed under this section direct that, for the purposes of the requirement, property of a specified description shall or shall not be taken into account.
 207.Imposition of prohibition or requirement under section 204, 205 or 206
 The Commission may impose a prohibition or requirement under section 204, 205 or 206 in respect of or with reference to any licensed corporation if it appears to the Commission that—
 (a)any property of the licensed corporation or its clients, or any property connected with the business which constitutes a regulated activity for which it is licensed, might be dissipated, transferred or otherwise dealt with in a manner prejudicial to the interest of any of its clients or creditors;
 (b)the licensed corporation is not a fit and proper person to remain licensed or is not a fit and proper person to carry on any regulated activity for which it is licensed (having regard, among other matters, to the matters specified in section 129);
 (c)the licensed corporation has failed to comply with the requirement specified in section 180(2) or, in purported compliance with such requirement, has furnished the Commission with information which was at the time when it was furnished false or misleading in a material particular;
 (d)the licence of the licensed corporation may be revoked or suspended on any of the grounds specified in section 194(1) or 195(1) or (2); or
 (e)the imposition of the prohibition or requirement is desirable in the interest of the investing public or in the public interest.
 208.Withdrawal, substitution or variation of prohibitions or requirements under section 204, 205 or 206
 (1)Where a prohibition or requirement imposed under section 204, 205 or 206 is in force, the Commission may, where it considers appropriate to do so (whether of its own volition or upon the request of the person on whom the prohibition or requirement is imposed or any other person affected by the prohibition or requirement), by notice in writing given to the person on whom the prohibition or requirement is imposed—
 (a)withdraw the prohibition or requirement; or
 (b)substitute another prohibition or requirement for, or vary, the prohibition or requirement.
 (2)A prohibition or requirement imposed under section 204, 205 or 206, or a prohibition or requirement substituting for another prohibition or requirement under subsection (1)(b), or a prohibition or requirement as varied under subsection (1)(b), shall, unless it provides otherwise, remain in force in accordance with the terms thereof until it is—
 (a)withdrawn; or
 (b)substituted by another prohibition or requirement, or varied,
 by the Commission under this section.
 (3)The provisions of this section apply, with necessary modifications, to a prohibition or requirement substituting for another prohibition or requirement under subsection (1)(b), or a prohibition or requirement as varied under subsection (1)(b), as they apply to a prohibition or requirement imposed under section 204, 205 or 206, and the provisions of this Division shall be construed accordingly.
 209.General provisions relating to sections 204, 205, 206 and 208
 (1)Where the Commission imposes under section 204, 205 or 206, or withdraws, substitutes or varies under section 208, a prohibition or requirement, the imposition, withdrawal, substitution or variation (as the case may be) of the prohibition or requirement takes effect at the time of the service of the notice given in respect thereof or at the time specified in the notice, whichever is the later.
 (2)Where the Commission imposes under section 204, 205 or 206, or withdraws, substitutes or varies under section 208, a prohibition or requirement, the notice given in respect thereof shall be accompanied by a statement specifying the reasons for the imposition, withdrawal, substitution or variation (as the case may be) of the prohibition or requirement.
 (3)Where any request is made by any person to the Commission pursuant to section 208(1) for the withdrawal, substitution or variation of a prohibition or requirement, the Commission shall serve on the person—
 (a)where it withdraws, substitutes or varies the prohibition or requirement in accordance with the request, a copy of the notice given in respect thereof and of the statement accompanying it in accordance with subsection (2); or
 (b)where it refuses to withdraw, substitute or vary the prohibition or requirement notwithstanding the request, a notice of its refusal, together with a statement specifying the reasons for the refusal.
 (4)Where—
 (a)the Commission imposes under section 204, 205 or 206, or withdraws, substitutes or varies under section 208, a prohibition or requirement; and
 (b)the reasons for the imposition, withdrawal, substitution or variation (as the case may be) as specified in the statement accompanying the notice given in respect thereof in accordance with subsection (2) relate specifically to matters which—
 (i)refer to any person who is identified in the statement but who is not the person on whom the prohibition or requirement was imposed; and
 (ii)are, in the opinion of the Commission, prejudicial to the person in any respect,
 the Commission shall, as soon as reasonably practicable after the imposition, withdrawal, substitution or variation (as the case may be), take all reasonable steps to serve on the person a copy of the notice given in respect of the imposition, withdrawal, substitution or variation (as the case may be) and of the statement accompanying it in accordance with subsection (2).
 (5)Nothing in subsections (3) and (4) requires a copy of any notice given in respect of the imposition, withdrawal, substitution or variation of a prohibition or requirement, or of a statement accompanying it in accordance with subsection (2), to be served on any person if the notice or statement or a copy of the notice or statement (as the case may be) has been served on the person under any other provision of this Part.
 (6)The Commission shall publish in the Gazette, and may publish by such additional means as it may consider appropriate, a notice regarding the imposition under section 204, 205 or 206, or the withdrawal, substitution or variation under section 208, of a prohibition or requirement.
 (7)A notice published under subsection (6) may, if the Commission considers appropriate, include a statement specifying the reasons for the imposition, withdrawal, substitution or variation (as the case may be) to which the notice relates.
 (8)The Commission shall—
 (a)before imposing under section 204, 205 or 206, or withdrawing, substituting or varying under section 208, a prohibition or requirement in respect of or with reference to a corporation that is an exchange participant or a clearing participant, use its best endeavours to inform the recognized exchange company or the recognized clearing house (as the case may be) of the proposed imposition, withdrawal, substitution or variation (as the case may be) by notice in writing; and
 (b)where before the imposition, withdrawal, substitution or variation of a prohibition or requirement it has not informed the recognized exchange company or the recognized clearing house (as the case may be) of the proposed imposition, withdrawal, substitution or variation (as the case may be) by notice in writing, forthwith after the imposition, withdrawal, substitution or variation (as the case may be) inform the recognized exchange company or the recognized clearing house (as the case may be) thereof by notice in writing.
 (9)Sections 204, 205, 206 and 208, and the imposition, withdrawal, substitution or variation of a prohibition or requirement under section 204, 205, 206 or 208, do not operate so as to render an agreement unenforceable by a party to the agreement if he proves that in entering into the agreement he acted in good faith and was unaware of any notice given, served or published, whether under section 204, 205, 206 or 208 or under this section, in respect of or regarding the imposition, withdrawal, substitution or variation (as the case may be).
 (10)Where by reason of the application of section 204, 205, 206 or 208 or of the giving, service or publication of any notice, whether under section 204, 205, 206 or 208 or under this section, a person rescinds an agreement, he shall restore to any other party to the agreement any money or other benefit received or obtained by him under the agreement from that party.
 (11)A notice published under subsection (6) is not subsidiary legislation.
 210.Cases of revocation or suspension of licensed corporations’ licences
 (1)Notwithstanding any other provisions of this Ordinance, but without limiting the generality of section 200(1) (whether having application with or without reference to section 146(11) or 147(9)), the revocation or suspension of the licence of a licensed corporation under any provision of this Ordinance does not affect—
 (a)the validity of—
 (i)a prohibition or requirement imposed under section 204, 205 or 206 in respect of or with reference to the corporation;
 (ii)a prohibition or requirement substituting for another prohibition or requirement under section 208(1)(b); or
 (iii)a prohibition or requirement as varied under section 208(1)(b),
 where the imposition, substitution or variation (as the case may be) takes effect at any time before the revocation or suspension (as the case may be) takes effect;
 (b)without limiting the generality of paragraph (a), any power exercisable by the Commission under section 208 in respect of any prohibition or requirement provided for in that paragraph, at the time when, or at any time after, the revocation or suspension (as the case may be) takes effect,
 and references in this Division to a licensed corporation shall be construed accordingly.
 (2)Notwithstanding section 200(1) (whether having application with or without reference to section 146(11) or 147(9)), where—
 (a)the licence of a corporation is revoked or suspended under any provision of this Ordinance; and
 (b)the Commission has imposed under section 204, 205 or 206 a prohibition or requirement in respect of or with reference to, or substituted or varied under section 208 a prohibition or requirement imposed in respect of or with reference to, the corporation, whether before or after the revocation or suspension,
 the corporation shall not, by reason of its compliance with the prohibition or requirement in force in respect of it under the circumstances described in paragraph (b), be regarded as having contravened section 114.
 (3)For the avoidance of doubt, where the Commission has decided to revoke or suspend the licence of a licensed corporation under any provision of this Ordinance, the Commission may, at any time before the revocation or suspension (as the case may be) takes effect—
 (a)impose under section 204, 205 or 206 a prohibition or requirement in respect of or with reference to; or
 (b)withdraw, substitute or vary under section 208 a prohibition or requirement imposed in respect of or with reference to,
 the licensed corporation.
 (4)For the avoidance of doubt, nothing in this section affects the power of the Commission to—
 (a)impose under section 204, 205 or 206 a prohibition or requirement in respect of or with reference to; or
 (b)withdraw, substitute or vary under section 208 a prohibition or requirement imposed in respect of or with reference to,
 a licensed corporation the licence of which has been suspended under any provision of this Ordinance.
 211.Application to Court of First Instance relating to non-compliance with prohibitions or requirements under section 204, 205, 206 or 208
 (1)If a person fails to comply with a prohibition or requirement in force in respect of him as a result of the exercise of any of the powers under sections 204, 205, 206 and 208, the Commission may, by originating summons or originating motion, make an application to the Court of First Instance in respect of the failure, and the Court may inquire into the case and—
 (a)if the Court is satisfied that there is no reasonable excuse for the person not to comply with the prohibition or requirement (as the case may be), order the person to comply with the prohibition or requirement (as the case may be) within the period specified by the Court; and
 (b)if the Court is satisfied that the failure was without reasonable excuse, punish the person, and any other person knowingly involved in the failure, in the same manner as if he and, where applicable, that other person had been guilty of contempt of court.
 (2)If there is a reasonable likelihood that a person will fail to comply with a prohibition or requirement in force in respect of him as a result of the exercise of any of the powers under sections 204, 205, 206 and 208, the Commission may, by originating summons or originating motion, apply to the Court of First Instance for an order that the person, and any other person who the Court is satisfied is able to procure the person to comply with the prohibition or requirement (as the case may be), to take such action or refrain from taking such action as the Court directs.
 (3)An originating summons under this section shall be in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A).
 (Amended E.R. 2 of 2012)
 Division 2Other powers and proceedings
 212.Winding-up orders and bankruptcy orders
 (1)If—
 (a)a corporation, other than an authorized financial institution, is of a class of corporations which the Court of First Instance has jurisdiction to wind up under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32); and (Amended 28 of 2012 ss. 912 & 920)
 (b)it appears to the Commission that it is desirable in the public interest that the corporation should be wound up,
 the Commission may present a petition for the corporation to be wound up under that Ordinance on the ground that it is just and equitable that the corporation should be so wound up, and that Ordinance shall apply to such petition as it applies in relation to a petition presented under that Ordinance.
 (1A)If it appears to the Commission that it is desirable in the public interest that an open-ended fund company should be wound up, the Commission may present a petition for the company to be wound up under the OFC rules on the ground that it is just and equitable that the company should be so wound up, and those rules apply to such a petition as they apply in relation to a petition presented under them. (Added 16 of 2016 s. 11)
 (2)If—
 (a)grounds exist for the presentation of a petition for a bankruptcy order against a licensed representative by his creditor in accordance with the Bankruptcy Ordinance (Cap. 6); and
 (b)it appears to the Commission that it is desirable in the public interest to present a petition for a bankruptcy order against the licensed representative in accordance with that Ordinance,
 the Commission may present a petition for a bankruptcy order against the licensed representative in accordance with that Ordinance, and that Ordinance shall apply to such petition as it applies in relation to a petition presented by a creditor.
 (3)The Commission shall—
 (a)before presenting a petition under subsection (1) against a corporation that is an exchange participant or a clearing participant, use its best endeavours to inform the recognized exchange company or the recognized clearing house (as the case may be) of the proposed presentation of the petition by notice in writing; and
 (b)where before the presentation of the petition it has not informed the recognized exchange company or the recognized clearing house (as the case may be) of the proposed presentation of the petition by notice in writing, forthwith after the presentation of the petition inform the recognized exchange company or the recognized clearing house (as the case may be) thereof by notice in writing.
 213.Injunctions and other orders
 (1)Where—
 (a)a person has—
 (i)contravened—
 (A)any of the relevant provisions;
 (B)any notice or requirement given or made under or pursuant to any of the relevant provisions;
 (C)any of the terms and conditions of any licence or registration under this Ordinance; or
 (D)any other condition imposed under or pursuant to any provision of this Ordinance;
 (ii)aided, abetted, or otherwise assisted, counselled or procured a person to commit any such contravention;
 (iii)induced, whether by threats, promises or otherwise, a person to commit any such contravention;
 (iv)directly or indirectly been in any way knowingly involved in, or a party to, any such contravention; or
 (v)attempted, or conspired with others, to commit any such contravention; or
 (b)it appears, whether or not during the course or as a result of the exercise of any power under Part VIII, to the Commission that any of the matters referred to in paragraph (a)(i) to (v) has occurred, is occurring or may occur,
 the Court of First Instance, on the application of the Commission, may, subject to subsection (4), make one or more of the orders specified in subsection (2).
 (2)The orders specified for the purposes of subsection (1) are—
 (a)an order restraining or prohibiting the occurrence or the continued occurrence of any of the matters referred to in subsection (1)(a)(i) to (v);
 (b)where a person has been, or it appears that a person has been, is or may become, involved in any of the matters referred to in subsection (1)(a)(i) to (v), whether knowingly or otherwise, an order requiring the person to take such steps as the Court of First Instance may direct, including steps to restore the parties to any transaction to the position in which they were before the transaction was entered into;
 (c)an order restraining or prohibiting a person from acquiring, disposing of, or otherwise dealing in, any property specified in the order;
 (d)an order appointing a person to administer the property of another person;
 (e)an order declaring a contract relating to any securities, structured product, futures contract, leveraged foreign exchange contract, or an interest in any securities, structured product, futures contract, leveraged foreign exchange contract or collective investment scheme to be void or voidable to the extent specified in the order; (Amended 8 of 2011 s. 10)
 (f)for the purpose of securing compliance with any other order made under this section, an order directing a person to do or refrain from doing any act specified in the order;
 (g)any ancillary order which the Court of First Instance considers necessary in consequence of the making of any of the orders referred to in paragraphs (a) to (f).
 (3)The Commission shall—
 (a)before making an application pursuant to subsection (1) for an order affecting any person that is an exchange participant or a clearing participant, use its best endeavours to inform the recognized exchange company or the recognized clearing house (as the case may be) of the proposed application by notice in writing; and
 (b)where before the making of the application it has not informed the recognized exchange company or the recognized clearing house (as the case may be) of the proposed application by notice in writing, forthwith after the making of the application inform the recognized exchange company or the recognized clearing house (as the case may be) thereof by notice in writing.
 (3A)If the contravention involved in a case is a contravention by an open-ended fund company or a director, an investment manager, a custodian or a sub-custodian of an open-ended fund company, the Court of First Instance may also, on the application of the Commission, make any of the orders specified in subsection (3C). (Added 16 of 2016 s. 12)
 (3B)The power under subsection (3A) may be exercised whether or not the Commission also applies for an order specified in subsection (2). (Added 16 of 2016 s. 12)
 (3C)The orders specified for the purposes of subsection (3A) are—
 (a)for an open-ended fund company without sub-funds—
 (i)an order removing a director of the company;
 (ii)an order removing an investment manager of the company;
 (iii)an order removing a custodian of the company;
 (iv)an order removing a sub-custodian of the company;
 (v)an order requiring a part of the investments of the company to be realized and the funds remaining after the discharge of the liabilities (if any) of the company attributable to the part to be distributed to shareholders of the company in accordance with the OFC rules;
 (vi)an order requiring all of the investments of the company to be realized and the funds remaining after the discharge of the liabilities (if any) of the company to be distributed to shareholders of the company in accordance with the OFC rules;
 (vii)an order requiring the company to be wound up under the OFC rules; and
 (viii)any ancillary order that the Court of First Instance considers necessary as a result of the making of any of the orders referred to in subparagraphs (i), (ii), (iii), (iv), (v), (vi) and (vii); and
 (b)for an open-ended fund company with sub-funds—
 (i)any of the orders specified in paragraph (a)(i), (ii), (iii), (iv), (v), (vi) and (vii);
 (ii)an order requiring the investments made in respect of a part of a sub-fund of the company to be realized and the funds remaining after the discharge of the liabilities (if any) of the company attributable to the part to be distributed to shareholders of the company in accordance with the OFC rules;
 (iii)an order requiring all of the investments made in respect of a sub-fund of the company to be realized and the funds remaining after the discharge of the liabilities (if any) of the company attributable to the sub-fund to be distributed to shareholders of the company in accordance with the OFC rules;
 (iv)an order requiring a sub-fund of the company to be wound up under the OFC rules; and
 (v)any ancillary order that the Court of First Instance considers necessary as a result of the making of any of the orders referred to in subparagraphs (i), (ii), (iii) and (iv). (Added 16 of 2016 s. 12)
 (4)The Court of First Instance shall, before making an order under subsection (1) or (3A), satisfy itself, so far as it can reasonably do so, that it is desirable that the order be made, and that the order will not unfairly prejudice any person. (Amended 16 of 2016 s. 12)
 (5)The Court of First Instance may, before making an order under subsection (1) or (3A), direct that a notice of the application made in respect thereof be given to the persons it considers appropriate, or be published in the manner it considers appropriate, or both. (Amended 16 of 2016 s. 12)
 (6)Where the Court of First Instance considers it desirable to do so, it may grant such interim order as it considers appropriate pending the determination of an application made pursuant to subsection (1) or (3A). (Amended 16 of 2016 s. 12)
 (7)An order may be made under subsection (1) or (3A) whether or not it appears to the Court of First Instance that— (Amended 16 of 2016 s. 12)
 (a)the person against whom the order is made intends to engage again, or to continue to engage, in any of the matters referred to in subsection (1)(a)(i) to (v);
 (b)the person against whom the order is made has previously engaged in any of such matters;
 (c)there is an imminent danger of damage to any person in the event of the order not being made.
 (8)Where the Court of First Instance has power to make an order against a person under subsection (1) or (3A), it may, in addition to or in substitution for such order, make an order requiring the person to pay damages to any other person. (Amended 16 of 2016 s. 12)
 (9)The Court of First Instance may reverse, vary or discharge an order made or granted by it under subsection (1), (3A) or (6) or suspend the operation of the order. (Amended 16 of 2016 s. 12)
 (10)A notice published under subsection (5) is not subsidiary legislation.
 (11)In this section—
 sub-fund (子基金)—see section 112R. (Added 16 of 2016 s. 12)
 214.Remedies in cases of unfair prejudice, etc. to interests of members of listed corporations, etc.
 (1)Where, in relation to a corporation which is or was listed, it appears to the Commission that at any relevant time the business or affairs of the corporation have been conducted in a manner—
 (a)oppressive to its members or any part of its members;
 (b)involving defalcation, fraud, misfeasance or other misconduct towards it or its members or any part of its members;
 (c)resulting in its members or any part of its members not having been given all the information with respect to its business or affairs that they might reasonably expect; or
 (d)unfairly prejudicial to its members or any part of its members,
 the Commission may, subject to subsection (3), by petition apply to the Court of First Instance for an order under this section.
 (2)If, on an application under this section, the Court of First Instance is of the opinion that the business or affairs of a corporation have been conducted in a manner described in subsection (1)(a), (b), (c) or (d), whether through conduct consisting of an isolated act or a series of acts or any failure to act, the Court may—
 (a)make an order restraining the carrying out, or requiring the carrying out, of any act or acts;
 (b)order that the corporation shall bring in its name such proceedings as the Court considers appropriate against such persons, and on such terms, as may be specified in the order;
 (c)unless the corporation is an authorized financial institution, appoint a receiver or manager of the whole or any part of the property or business of the corporation and may specify the powers and duties of the receiver or manager and fix his remuneration;
 (d)order that a person wholly or partly responsible for the business or affairs of the corporation having been so conducted shall not, without the leave of the Court—
 (i)be, or continue to be, a director, liquidator, or receiver or manager of the property or business, of the corporation or any other corporation; or
 (ii)in any way, whether directly or indirectly, be concerned, or take part, in the management of the corporation or any other corporation,
 for such period (not exceeding 15 years) as may be specified in the order;
 (e)make any other order it considers appropriate, whether for regulating the conduct of the business or affairs of the corporation in future, or for the purchase of the shares of any members of the corporation by other members of the corporation or by the corporation (and, in the case of a purchase by the corporation, for the reduction accordingly of the corporation’s capital), or otherwise.
 (3)The Commission shall not make an application under this section unless it has first consulted—
 (a)(Repealed 9 of 2012 s. 18)
 (b)where the corporation in question is an authorized financial institution or a corporation which, to the knowledge of the Commission, is a controller of an authorized financial institution, or has as its controller an authorized financial institution, or has a controller that is also a controller of an authorized financial institution, the Monetary Authority.
 (4)Where the Court of First Instance makes an order under subsection (2)(d), the order shall be filed by the Court with the Registrar of Companies, as soon as reasonably practicable after it is made.
 (5)Where an order under this section makes an alteration in or addition to the constitution of a company, notwithstanding any other provisions of the Companies Ordinance (Cap. 622) or the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) but subject to the provisions of the order, the company shall not have the power, without the leave of the Court of First Instance, to make any further alteration in or addition to the constitution inconsistent with the order. (Amended 28 of 2012 ss. 912 & 920)
 (6)Where any alteration in or addition to the constitution of a company is made by an order under this section, the alteration or addition (as the case may be) has the same effect as if duly made by a resolution of the company, and the Companies Ordinance (Cap. 622) and the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) apply to the constitution as altered or added to accordingly. (Amended 28 of 2012 ss. 912 & 920)
 (7)An office copy of an order of the Court of First Instance altering or adding to, or of the leave of the Court to alter or add to, the constitution of a company shall, within 14 days after the order is made or the leave is given, be delivered by the company to the Registrar of Companies for registration.
 (8)A company which contravenes subsection (7) commits an offence and is liable on conviction to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for every day during which the offence continues.
 (9)In this section—
 controller (控制人) means a person who is an indirect controller or a majority shareholder controller as defined in section 2(1) of the Banking Ordinance (Cap. 155);
 relevant time (有關時間)—
 (a)in relation to a corporation which is listed, means any time since the formation of the corporation; or
 (b)in relation to a corporation which was listed, means any time since the formation of the corporation but before the corporation ceased to remain listed.
 214A.Remedies in cases of unfair prejudice etc. to interests of shareholders of open-ended fund companies
 (1)The Commission may by petition apply to the Court of First Instance for an order under this section if it appears to the Commission that at any time since the date of incorporation (or the re-domiciliation date as defined by section 112ZJA(1)) of an open-ended fund company, the business or affairs of the company have been conducted in a manner— (Amended 33 of 2021 s. 10)
 (a)oppressive to its shareholders or any part of its shareholders;
 (b)involving defalcation, fraud, misfeasance or other misconduct towards it or its shareholders or any part of its shareholders;
 (c)resulting in its shareholders or any part of its shareholders not having been given all the information with respect to its business or affairs that they might reasonably expect; or
 (d)unfairly prejudicial to its shareholders or any part of its shareholders.
 (2)If, on an application under subsection (1), the Court of First Instance is of the opinion that the business or affairs of an open-ended fund company have been conducted in a manner described in subsection (1)(a), (b), (c) or (d), whether through conduct consisting of an isolated act or a series of acts or a failure to act, the Court may—
 (a)make an order restraining the carrying out, or requiring the carrying out, of an act;
 (b)make an order requiring the company to bring in its name any proceedings that the Court considers appropriate against any persons, and on any terms, specified in the order;
 (c)make an order appointing a receiver or manager of the whole or any part of the property or business of the company, specifying the powers and duties of the receiver or manager and fixing his or her remuneration;
 (d)make an order that a person wholly or partly responsible for the business or affairs of the company having been so conducted must not, without the leave of the Court—
 (i)be, or continue to be, a director, an investment manager, a liquidator, or a receiver or manager of the property or business, of the company or any other corporation; or
 (ii)in any way, whether directly or indirectly, be concerned, or take part, in the management of the company or any other corporation; or
 (e)make any other order the Court considers appropriate, whether for regulating the conduct of the business or affairs of the company in the future, or for the purchase of the shares of any shareholders of the company by other shareholders of the company or by the company, or otherwise.
 (3)If the order to be applied for under subsection (1) is an order against—
 (a)an authorized financial institution; or
 (b)a corporation that, to the knowledge of the Commission—
 (i)is a controller of an authorized financial institution;
 (ii)has as its controller an authorized financial institution; or
 (iii)has a controller that is also a controller of an authorized financial institution,
 the Commission must not make the application unless it has first consulted the Monetary Authority.
 (4)An order under subsection (2)(d) must specify the period for which it is to have effect and such a period must not exceed 15 years.
 (5)The Court of First Instance must, as soon as reasonably practicable after making an order under subsection (2)(d), file the order with the Registrar of Companies.
 (6)In this section—
 controller (控制人) means an indirect controller, or a majority shareholder controller, as defined by section 2(1) of the Banking Ordinance (Cap. 155).
 (Added 16 of 2016 s. 13)
 214B.Order under section 214A altering open-ended fund company’s instrument of incorporation
 (1)If an order made under section 214A alters the instrument of incorporation of an open-ended fund company, despite any other provisions of this Ordinance but subject to the provisions of the order, the company does not have the power, without the leave of the Court of First Instance, to make any further alteration to the instrument that is inconsistent with the order.
 (2)If the instrument of incorporation of an open-ended fund company is altered by an order made under section 214A—
 (a)the alteration has the same effect as if duly made by a resolution of the company; and
 (b)this Ordinance applies to the instrument as altered accordingly.
 (3)An open-ended fund company must, within 14 days after an order altering its instrument of incorporation is made under section 214A, deliver an office copy of the order to the Registrar of Companies for registration under this Ordinance.
 (4)An open-ended fund company must, within 14 days after the leave of the Court of First Instance to alter its instrument of incorporation is given, deliver an office copy of the leave to the Registrar of Companies for registration under this Ordinance.
 (5)An open-ended fund company that contravenes subsection (3) or (4) commits an offence and is liable on conviction to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.
 (6)In this section—
 alter (改動) includes add to.
 (Added 16 of 2016 s. 13)
 Part XI
 Securities and Futures Appeals Tribunal
 (Format changes—E.R. 2 of 2017)
 Division 1Interpretation
 215.Interpretation of Part XI
 In this Part, unless the context otherwise requires—
 application for review (覆核申請) means an application made under section 217(1);
 judge (法官) means—
 (a)a judge or a deputy judge of the Court of First Instance;
 (b)a former Justice of Appeal of the Court of Appeal;
 (c)a former judge or a former deputy judge of the Court of First Instance;
 parties (各方), in relation to a review, means—
 (a)the relevant authority making the specified decision in question; and
 (b)the person making the application for review in question;
 relevant authority (有關當局)—
 (a)in relation to a specified decision within the meaning of paragraph (a) of the definition of specified decision in this section, means the Commission;
 (b)in relation to a specified decision within the meaning of paragraph (b) of the definition of specified decision in this section, means the Monetary Authority; or
 (c)in relation to a specified decision within the meaning of paragraph (c) of the definition of specified decision in this section, means the Commission or the recognized investor compensation company by which the decision is made (as the case may be);
 review (覆核) means a review of a specified decision by the Tribunal under section 218(1);
 specified decision (指明決定) means—
 (a)a decision of the Commission which—
 (i)is made under or pursuant to any of the provisions set out in column 2 of Division 1 of Part 2 of Schedule 8; and
 (ii)is within the description set out, opposite such provisions, in column 3 of Division 1 of Part 2 of Schedule 8;
 (b)a decision of the Monetary Authority which—
 (i)is made under or pursuant to any of the provisions set out in column 2 of Division 2 of Part 2 of Schedule 8; and
 (ii)is within the description set out, opposite such provisions, in column 3 of Division 2 of Part 2 of Schedule 8; or
 (c)a decision of the Commission or a recognized investor compensation company which—
 (i)is made under or pursuant to any of the provisions set out in column 2 of Division 3 of Part 2 of Schedule 8; and
 (ii)is within the description set out, opposite such provisions, in column 3 of Division 3 of Part 2 of Schedule 8;
 Tribunal (審裁處) means the Securities and Futures Appeals Tribunal established by section 216.
 Division 2Securities and Futures Appeals Tribunal
 216.Securities and Futures Appeals Tribunal
 (1)There is established a Tribunal to be known as the Securities and Futures Appeals Tribunal which shall have jurisdiction to review specified decisions, and to hear and determine any question or issue arising out of or in connection with any review, in accordance with this Part and Schedule 8.
 (2)Except as otherwise provided in this Part or in Schedule 8, the Tribunal—
 (a)shall consist of a chairman and 2 other members; and
 (b)shall be presided over by the chairman who shall sit with the 2 other members.
 (3)The chairman of the Tribunal shall be a judge and the 2 other members of the Tribunal shall not be public officers.
 (4)Part 1 of Schedule 8 shall have effect in relation to the appointment of members of the Tribunal, and to the proceedings and sittings of, and procedural and other matters concerning, the Tribunal.
 (5)Where the Chief Executive considers appropriate, additional Tribunals may be established for the purposes of any reviews, whereupon the provisions of this or any other Ordinance shall apply, subject to necessary modifications, to each of such additional Tribunals (including appointment of the chairman and other members of, and all matters concerning, each of such additional Tribunals) as they apply to the Tribunal.
 (6)With the exception of the chairman of the Tribunal who is a judge within the meaning of paragraph (a) of the definition of judge in section 215, a member of the Tribunal may be paid, as a fee for his services, such amount as the Financial Secretary considers appropriate, and that amount shall be a charge on the general revenue.
 (7)Where a person who is a judge within the meaning of paragraph (a) of the definition of judge in section 215 is appointed as the chairman of the Tribunal, neither the appointment nor the service or removal of the person as the chairman affects—
 (a)the tenure of office of, and the exercise of powers by, the person as a judge within the meaning of that paragraph;
 (b)the person’s rank, title, status, precedence, salary or other rights or privileges as a holder of that office;
 (c)the terms and conditions to which the person is subject as a holder of that office.
 217.Applications for review of specified decisions
 (1)Subject to subsections (2) and (3), a person aggrieved by a specified decision of the relevant authority made in respect of him may, by notice in writing given to the Tribunal, apply to the Tribunal for a review of the decision.
 (2)A notice given to the Tribunal under subsection (1) shall set out the grounds for the application to which the notice relates.
 (3)An application for review of a specified decision of the relevant authority shall be made within 21 days after—
 (a)subject to paragraph (b)—
 (i)where there is any requirement in this or any other Ordinance for notice in writing in respect of the decision to be served, the notice has been served in accordance with such requirement; or
 (ii)where there is no such requirement, a notice in writing in respect of the decision has been served on the person in respect of whom it is made;
 (b)where the decision is a specified decision which is described in column 2 of Division 1 of Part 3 of Schedule 8 and to which the provision set out, opposite such description of the specified decision, in column 3 of that Division applies, a notice in respect of the decision has been given to the person in respect of whom it is made.
 (4)Notwithstanding subsection (3), the Tribunal, upon application in writing by any person, may, subject to subsection (5), by order extend the time within which an application for review of a specified decision of the relevant authority shall be made under subsection (3), whereupon the time within which such an application shall be made under subsection (3) shall be extended accordingly.
 (5)The Tribunal shall not grant an extension under subsection (4) unless—
 (a)the person who has applied for the grant of the extension pursuant to that subsection and the relevant authority have been given a reasonable opportunity of being heard; and
 (b)it is satisfied that there is a good cause for granting the extension.
 (6)Where the Tribunal receives a notice under subsection (1), it shall as soon as reasonably practicable thereafter serve a copy of the notice on the relevant authority.
 218.Proceedings before Tribunal
 (1)After an application for review has been made, the Tribunal shall review the specified decision to which the application relates.
 (2)Following the review of a specified decision under subsection (1), the Tribunal may—
 (a)confirm, vary or set aside the decision, and, where the decision is set aside, substitute for the decision any other decision which the Tribunal considers appropriate;
 (b)remit the matter in question to the relevant authority with the directions it considers appropriate, which may include a direction to the relevant authority to make a decision afresh in respect of any matter specified by the Tribunal.
 (3)Where the Tribunal varies, or substitutes any decision for, a specified decision under subsection (2)(a), the decision as varied or the decision substituting for the specified decision (as the case may be) may be any decision (whether more or less onerous) that the relevant authority had power to make in respect of the person making the application for review in question, whether or not under the same provision as that under which the specified decision has been made.
 (4)Without limiting the generality of subsections (2)(a) and (3) but subject to subsection (6)—
 (a)where the specified decision in question is a specified decision described in column 2 of Division 2 of Part 3 of Schedule 8, the decision that the Tribunal may substitute under subsection (2)(a) for the specified decision may also include (whether or not in addition to the decision that the Tribunal may, apart from this subsection, substitute under subsection (2)(a) for the specified decision) any decision that the Monetary Authority had power to make in respect of the person making the application for review in question under or pursuant to any of the provisions set out, opposite such description of the specified decision, in column 3 of that Division; and
 (b)where the specified decision in question is a specified decision described in column 2 of Division 3 of Part 3 of Schedule 8, the decision that the Tribunal may substitute under subsection (2)(a) for the specified decision may also include (whether or not in addition to the decision that the Tribunal may, apart from this subsection, substitute under subsection (2)(a) for the specified decision) any decision that the Commission had power to make in respect of the person making the application for review in question under or pursuant to any of the provisions set out, opposite such description of the specified decision, in column 3 of that Division.
 (5)Notwithstanding anything in this section, the Tribunal shall not determine a review without first giving the parties to the review a reasonable opportunity of being heard.
 (6)Without limiting the generality of subsection (5), the Tribunal shall not exercise any power pursuant to subsection (4)(a) or (b) without first giving a reasonable opportunity of being heard to—
 (a)in the case of subsection (4)(a), the Monetary Authority; or
 (b)in the case of subsection (4)(b), the Commission.
 (7)Subject to section 221(3), the standard of proof required to determine any question or issue before the Tribunal shall be the standard of proof applicable to civil proceedings in a court of law.
 219.Powers of Tribunal
 (1)Subject to the provisions of Part 1 of Schedule 8 and any rules made by the Chief Justice under section 233, the Tribunal, for the purposes of a review, may, on its own motion or on the application of any of the parties to the review—
 (a)receive and consider any material by way of oral evidence, written statements or documents, even if the material would not be admissible in evidence in civil or criminal proceedings in a court of law;
 (b)by notice in writing signed by the chairman of the Tribunal require a person to attend before it at any sitting and to give evidence and produce any article, record or document in his possession relating to the subject matter of the review;
 (c)administer oaths;
 (d)examine or cause to be examined on oath or otherwise a person attending before it and require the person to answer truthfully any question which the Tribunal considers appropriate for the purposes of the review;
 (e)order a witness to provide evidence in a truthful manner for the purposes of the review by affidavit;
 (f)order a person not to publish or otherwise disclose any material the Tribunal receives;
 (g)prohibit the publication or disclosure of any material the Tribunal receives at any sitting, or any part of a sitting, which is held in private;
 (h)determine the manner in which any material referred to in paragraph (a) is received;
 (i)stay any of the proceedings in the review on such grounds and on such terms and conditions as it considers appropriate having regard to the interests of justice;
 (j)determine the procedure to be followed in the review;
 (k)exercise such other powers or make such other orders as may be necessary for or ancillary to the conduct of the review or the carrying out of its functions.
 (2)A person commits an offence if he, without reasonable excuse—
 (a)fails to comply with an order, notice, prohibition or requirement of the Tribunal made or given under or pursuant to subsection (1);
 (b)disrupts or otherwise misbehaves during any sitting of the Tribunal;
 (c)having been required by the Tribunal under subsection (1) to attend before the Tribunal, leaves the place where his attendance is so required without the permission of the Tribunal;
 (d)hinders or deters any person from attending before the Tribunal, giving evidence or producing any article, record or document, for the purposes of a review;
 (e)threatens, insults or causes any loss to be suffered by any person who has attended before the Tribunal, on account of such attendance; or
 (f)threatens, insults or causes any loss to be suffered by any member of the Tribunal at any time on account of the performance of his functions in that capacity.
 (3)A person who commits an offence under subsection (2) is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 (4)A person is not excused from complying with an order, notice, prohibition or requirement of the Tribunal made or given under or pursuant to subsection (1) only on the ground that to do so might tend to incriminate the person.
 220.Use of incriminating evidence required by Tribunal
 Notwithstanding any other provisions of this Ordinance, where the Tribunal—
 (a)requires a person to give evidence under section 219(1)(b);
 (b)requires a person to answer any question under section 219(1)(d );
 (c)orders a person to provide evidence under section 219(1)(e); or
 (d)otherwise orders or requires a person to provide any information under section 219(1)(k),
 and the evidence, answer or information (as the case may be) might tend to incriminate the person, then the requirement or order as well as the evidence, the question and answer, or the information (as the case may be) shall not be admissible in evidence against the person in criminal proceedings in a court of law other than those in which the person is charged with an offence under section 219(2)(a), 253(2)(a) or 254(6)(a) or (b), or under Part V of the Crimes Ordinance (Cap. 200), or for perjury, in respect of the evidence, answer or information (as the case may be).
 221.Contempt dealt with by Tribunal
 (1)The Tribunal shall have the same powers as the Court of First Instance to punish for contempt.
 (2)Without limiting the generality of the powers of the Tribunal under subsection (1), the Tribunal shall have the same powers as the Court of First Instance to punish for contempt, as if it were contempt of court, a person who, without reasonable excuse, commits any conduct falling within the description of section 219(2)(a), (b), (c), (d), (e) or (f).
 (3)The Tribunal shall, in the exercise of its powers to punish for contempt under this section, adopt the same standard of proof as the Court of First Instance in the exercise of the same powers to punish for contempt.
 (4)Notwithstanding anything in this section and any other provisions of this Ordinance—
 (a)no power may be exercised under or pursuant to this section to determine whether to punish any person for contempt in respect of any conduct if—
 (i)criminal proceedings have previously been instituted against the person under section 219(2) in respect of the same conduct; and
 (ii)(A)those criminal proceedings remain pending; or
 (B)by reason of the previous institution of those criminal proceedings, no criminal proceedings may again be lawfully instituted against that person under such section in respect of the same conduct;
 (b)no criminal proceedings may be instituted against any person under section 219(2) in respect of any conduct if—
 (i)any power has previously been exercised under or pursuant to this section to determine whether to punish the person for contempt in respect of the same conduct; and
 (ii)(A)proceedings arising from the exercise of such power remain pending; or
 (B)by reason of the previous exercise of such power, no power may again be lawfully exercised under or pursuant to this section to determine whether to punish the person for contempt in respect of the same conduct.
 222.Privileged information
 Nothing in this Part and Schedule 8 requires an authorized financial institution, acting as the banker or financial adviser of a person who makes an application for review, to disclose information as to the affairs of any of its customers other than that person.
 223.Costs
 (1)The Tribunal may, in relation to a review, by order award to—
 (a)any person whose attendance, whether as a witness or otherwise, has been necessary or required for the purposes of the review;
 (b)any party to the review,
 such sum as it considers appropriate in respect of the costs reasonably incurred by the person or the party (as the case may be) in relation to the review and the application for review in question.
 (2)Any costs awarded under subsection (1) shall be paid by and recoverable as a civil debt from—
 (a)where the costs are awarded to any person under subsection (1)(a), such of the parties to the review in question as the Tribunal considers appropriate; or
 (b)where the costs are awarded to any party to the review under subsection (1)(b), the other party to the review.
 (3)Subject to any rules made by the Chief Justice under section 233, Order 62 of the Rules of the High Court (Cap. 4 sub. leg. A) applies to the award of costs, and to the taxation of any costs awarded, by the Tribunal under subsection (1).
 (Amended E.R. 2 of 2017)
 224.Notification of Tribunal determinations
 (1)The Tribunal shall, as soon as reasonably practicable after the conclusion of a review, deliver—
 (a)its determination in respect of the review, and the reasons for making the determination; and
 (b)any order made under section 223 in relation to the review, and the reasons for making the order.
 (2)Where any sitting of the Tribunal relating to a review, or any part thereof, is held in private, the Tribunal may by order prohibit the publication or disclosure of any determination or order, or any reasons for any determination or order, referred to in subsection (1)(a) or (b), or any part thereof.
 (3)A person commits an offence if he, without reasonable excuse, fails to comply with an order of the Tribunal made pursuant to subsection (2) and is liable—
 (a)on conviction on indictment to a fine of $1,000,000 and to imprisonment for 2 years; or
 (b)on summary conviction to a fine at level 6 and to imprisonment for 6 months.
 225.Form and proof of orders of Tribunal
 (1)An order made by the Tribunal shall be recorded in writing and signed by the chairman of the Tribunal.
 (2)A document purporting to be an order of the Tribunal and to be signed by the chairman of the Tribunal shall, in the absence of proof to the contrary, be regarded as an order of the Tribunal duly made, without proof of its making, or proof of signature, or proof that the person signing the order was in fact the chairman.
 226.Orders of Tribunal may be registered in Court of First Instance
 The Court of First Instance may, on notice in writing given by the Tribunal in the manner prescribed by rules made by the Chief Justice under section 233, register an order of the Tribunal in the Court of First Instance and the order shall, on registration, become for all purposes an order of the Court of First Instance made within the jurisdiction of the Court of First Instance.
 227.Applications for stay of execution of specified decisions
 (1)Subject to subsections (2) and (3), the making of an application for review does not by itself operate as a stay of execution of the specified decision to which the application relates.
 (2)A person who has made an application for review or an application pursuant to section 217(4) may, at any time before the review or the application (as the case may be) is determined by the Tribunal, apply to the Tribunal for a stay of execution of the specified decision to which the application relates.
 (3)On an application made under subsection (2), the Tribunal shall as soon as reasonably practicable conduct a hearing to determine the application, and may, where it considers appropriate, by order grant a stay of execution of the specified decision to which the application relates, subject to such conditions as to costs, payment of money into the Tribunal or otherwise as the Tribunal considers appropriate.
 228.Applications for stay of execution of decisions of Tribunal
 A party to a review may, at any time after the determination of the review, apply to the Tribunal for a stay of execution of a decision of the Tribunal relating to the review, whereupon the Tribunal may, where it considers appropriate, by order grant the stay, subject to such conditions as to costs, payment of money into the Tribunal or otherwise as the Tribunal considers appropriate.
 Division 3Appeals
 229.Appeal to Court of Appeal
 (1)A party to a review who is dissatisfied with a decision of the Tribunal relating to the review may appeal to the Court of Appeal against the decision on a point of law.
 (2)In an appeal under subsection (1), the Court of Appeal may—
 (a)allow the appeal;
 (b)dismiss the appeal;
 (c)vary or set aside the decision in question, and, where the decision is set aside, substitute for the decision any other decision it considers appropriate;
 (d)remit the matter in question to the Tribunal with the directions it considers appropriate, which may include a direction to the Tribunal to conduct the review in question afresh for the purpose of determining any question specified by the Court of Appeal.
 (3)Where the Court of Appeal varies, or substitutes any other decision for, a decision under subsection (2)(c), the decision as varied or the other decision substituting for the decision (as the case may be) may be any decision (whether more or less onerous) that the Tribunal had power to make in respect of the review in question, whether or not under the same provision as that under which the decision has been made.
 (4)In an appeal under subsection (1), the Court of Appeal may make such order as to costs as it considers appropriate.
 230.No stay of execution on appeal
 Without prejudice to section 228, the lodging of an appeal under section 229 does not by itself operate as a stay of execution of a decision of the Tribunal unless the Court of Appeal otherwise orders, and any stay of execution may be subject to such conditions as to costs, payment of money into the Tribunal or otherwise as the Court of Appeal considers appropriate.
 231.No other right of appeal
 Subject to section 229 and section 50 of the High Court Ordinance (Cap. 4), any decision of the Tribunal shall be final and shall not be subject to appeal.
 Division 4Miscellaneous
 232.Time when specified decisions to take effect
 (1)Notwithstanding subsections (2) and (3) and any other provisions of this or any other Ordinance, no specified decision, other than a specified decision which is described in column 2 of Division 4 of Part 3 of Schedule 8 and to which the provision set out, opposite such description of the specified decision, in column 3 of that Division applies, takes effect at any time before—
 (a)where there is any requirement in this or any other Ordinance for notice in writing in respect of the decision to be served, the notice has been served in accordance with such requirement; or
 (b)where there is no such requirement, a notice in writing in respect of the decision has been served on the person in respect of whom it is made.
 (2)A specified decision, other than a specified decision which is described in column 2 of Division 5 of Part 3 of Schedule 8 and to which the provision set out, opposite such description of the specified decision, in column 3 of that Division applies, takes effect—
 (a)where, prior to the expiration of the period of 21 days specified in section 217(3), the person in respect of whom the decision is made notifies the relevant authority that he will not make an application for review of the decision, at the time when he so notifies the relevant authority;
 (b)subject to paragraph (a), where the person does not make an application for review of the decision within the period of 21 days specified in section 217(3), at the time when the period so specified expires; or
 (c)where the person makes an application for review of the decision within the period of 21 days specified in section 217(3)—
 (i)where the decision is confirmed by the Tribunal, at the time when the decision is so confirmed;
 (ii)where the decision is varied, or substituted by another decision, by the Tribunal, at the time when the decision is so varied or substituted, subject however to the terms of the variation or substitution; or
 (iii)where the application is withdrawn, at the time when it is so withdrawn.
 (3)Notwithstanding subsection (2) and any other provisions of this or any other Ordinance, but subject to subsection (1), the relevant authority may, where it considers appropriate in the interest of the investing public or in the public interest to do so, specify in the notice served in respect of a specified decision any time, other than that at which the decision is apart from this subsection to take effect, as the time at which the decision is to take effect, in which case the decision takes effect at the time so specified.
 (4)Nothing in this section affects the power of the Tribunal to grant a stay of execution of a specified decision under section 227.
 233.Rules by Chief Justice
 The Chief Justice may make rules—
 (a)providing for the award of costs under section 223 and the taxation of those costs;
 (b)prescribing the manner in which the Tribunal is to give notice to the Court of First Instance in respect of orders of the Tribunal pursuant to section 226;
 (c)regulating the procedure for the hearing of appeals under section 229;
 (d)requiring the payment of the fees specified in the rules for any matter relating to applications for review;
 (e)providing for matters of procedure or other matters relating to applications for review or reviews, which are not provided for in this Part or in Part 1 of Schedule 8;
 (f)providing for the issue or service of any document (however described) for the purposes of this Part or Part 1 of Schedule 8;
 (g)prescribing any matter which this Part provides is, or may be, prescribed by rules made by the Chief Justice.
 234.Amendment of Parts 2 and 3 of Schedule 8
 The Chief Executive in Council may, by order published in the Gazette, amend Parts 2 and 3 of Schedule 8.
 Part XII
 Investor Compensation
 (Format changes—E.R. 2 of 2017)
 235.Interpretation of Part XII
 In this Part, unless the context otherwise requires—
 compensation (賠償) means compensation payable out of the compensation fund under rules made under section 244;
 default (違責) means a default prescribed by rules made under section 244;
 Futures Exchange Compensation Fund (期交所賠償基金) means the compensation fund established under Part VIII of the repealed Commodities Trading Ordinance;
 Unified Exchange Compensation Fund (聯交所賠償基金) means the compensation fund established under Part X of the repealed Securities Ordinance.
 236.Establishment of compensation fund
 (1)The Commission shall establish and maintain a compensation fund, to be known as the Investor Compensation Fund in English and “投資者賠償基金” in Chinese, for the purpose of providing, in accordance with rules made under section 244, a measure of compensation to clients of a specified person who sustain a loss by reason of a default committed by the specified person or any of his associated persons in connection with specified securities or futures contracts.
 (2)In this section—
 associated person (相聯者), in relation to a specified person, means—
 (a)a person employed or otherwise engaged by the specified person;
 (b)a person (first-mentioned person) who may under section 164 receive or hold client assets of the specified person, or an employee of the first-mentioned person; or
 (c)such other persons as may be prescribed by rules made under section 244;
 specified person (指明人士) means—
 (a)an intermediary licensed or registered for Type 1 or Type 2 regulated activity;
 (b)an intermediary licensed for Type 8 regulated activity; or
 (c)such other person as may be prescribed by rules made under section 244;
 specified securities or futures contracts (指明證券或期貨合約) means any securities or futures contracts listed or traded or to be listed or traded on—
 (a)a recognized stock market or recognized futures market; or
 (b)such other markets as may be prescribed by rules made under section 244.
 237.Money constituting the compensation fund
 (1)The compensation fund shall consist of—
 (a)all amounts paid to the Commission or a recognized investor compensation company in accordance with rules made under this Part;
 (b)all amounts paid by the Commission into the compensation fund under subsection (2)(b);
 (c)all amounts paid into the compensation fund under sections 74(2) or (9)(b), 75(2) or (9)(b) and 76(11) of Schedule 10;
 (d)all assets (whether in cash or otherwise) recovered by the Commission or a recognized investor compensation company in exercise of a right of action conferred by section 243 or 87;
 (e)all amounts borrowed under subsection (2)(a);
 (f)any return or profit received on an investment made under section 241;
 (g)all other amounts lawfully paid into the compensation fund.
 (2)With the consent in writing of the Financial Secretary, the Commission may—
 (a)for the purpose of the compensation fund, borrow from any authorized financial institution on such terms and at such rates of interest as it considers acceptable and charge any investments acquired under section 241 by way of security for any such loan;
 (b)pay into the compensation fund from its reserves such amount of money as it considers appropriate.
 238.Management of compensation fund
 (1)Subject to this Part, the Commission shall be responsible for the management and administration of the compensation fund, including the determination of a claim for compensation.
 (2)The Commission may realize any of the non-cash assets of the compensation fund at such times as it considers appropriate and the proceeds of realization shall become part of the compensation fund.
 239.Money to be kept in account
 The Commission shall open at one or more authorized financial institutions one or more accounts and shall, pending their application in accordance with this Part, pay into or transfer to such account or accounts all amounts forming part of the compensation fund.
 240.Accounts of compensation fund
 (1)The Commission shall keep proper accounts of the compensation fund.
 (2)The Commission may, if it considers it necessary to do so—
 (a)maintain separate accounts in respect of the amounts that are respectively paid into the compensation fund under sections 74, 75 and 76 of Schedule 10;
 (b)maintain separate accounts in respect of the compensation fund—
 (i)for different—
 (A)recognized exchange companies;
 (B)markets operated by recognized exchange companies;
 (C)persons providing automated trading services; or
 (D)classes of investors; or
 (ii)for the better and more effectual management or administration of the fund;
 (c)maintain sub-accounts in respect of the separate accounts referred to in paragraph (a) or (b) in such manner as it considers appropriate.
 (3)The Commission shall in respect of the financial year beginning before and ending after the day on which this section commences, and in respect of each subsequent financial year, prepare—
 (a)a financial statement made up to (and including) the last day of that year, in respect of the accounts of the compensation fund; and
 (b)in the case where separate accounts are maintained under subsection (2)(a) or (b) or sub-accounts are maintained under subsection (2)(c)—
 (i)a consolidated financial statement made up to (and including) the last day of that year, in respect of the separate accounts or sub-accounts (as the case may be); and
 (ii)a separate financial statement made up to (and including) the last day of that year, in respect of each separate account or sub-account (as the case may be).
 (4)A financial statement prepared under subsection (3) shall be signed by the chairman and the chief executive officer of the Commission. (Amended 15 of 2006 s. 4)
 (5)The Commission shall appoint an auditor to audit the compensation fund.
 (6)The auditor so appointed shall annually audit the accounts of the compensation fund and shall audit, and prepare an auditor’s report in respect of, each financial statement prepared under subsection (3) and shall submit the report to the Commission.
 (7)An auditor’s report prepared under subsection (6) shall contain a statement made by the auditor as to whether in his opinion the financial statement gives a true and fair view of the matters to which the statement relates.
 (8)The auditor appointed under this section may call for and inspect such books and records of the Commission or any recognized investor compensation company as he may require in order to perform his functions under this section.
 (9)Not later than 4 months after the end of each financial year the Commission shall cause—
 (a)a copy of—
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