The SFC publishes today in the Government gazette an exemption notice made under section 25(1) of the Securities and Futures (Investor Compensation - Levy) Rules (the Rules) to declare that no person is required to pay investor compensation levies in respect of a sale and purchase of securities or futures contract on or after 19 December 2005.
The suspension will remain in force until terminated by a termination of exemption notice published by the SFC in the Government gazette under section 26(1) of the Rules at some future date when the net asset value of the Investor Compensation Fund (ICF) falls below $1 billion.
Under Parts 2 and 3 of the Rules, investors are required to pay investor compensation levies at 0.002% on each side of securities transactions executed on the Stock Exchange of Hong Kong Limited and $0.5 ($0.1 for smaller size contracts) per side of a contract on futures transactions executed on the Hong Kong Futures Exchange Limited.
The Securities and Futures (Investor Compensation - Levy) (Amendment) Rules 2005, which came into effect on 28 October 2005, provide for a levy suspension and re-instatement mechanism whereby the investor compensation levies can be suspended when the net asset value of the ICF exceeds $1.4 billion, and subsequently reinstated when the net asset value of the ICF falls below $1 billion.
The levy suspension and re-instatement mechanism helps to reduce the transaction costs borne by investors while ensuring that the assets of the ICF are at a prudent level. As of the end of September 2005, the net asset value of the ICF was $1.59 billion. The SFC will continue to monitor the size of the ICF in order to ensure that it is able to cope with changing market needs.
----------------------------------------------------------
G.N. 5808
SECURITIES AND FUTURES
(INVESTOR COMPENSATION - LEVY) RULES
(Chapter 571, Sub Leg AB)
Pursuant to section 25 of the Securities and Futures (Investor Compensation - Levy) Rules ('Rules'), it is hereby declared that no person shall be required to pay any levy under Part 2 or 3 of the Rules in respect of a sale and purchase of securities or futures contract that takes place at any time on or after 19 December 2005 and before the date to be specified by a termination of exemption notice published under section 26(1) of the Rules and relating to this exemption notice.
Martin WHEATLEY Chairman, Securities and Futures Commission
4 November 2005
|