| (Cap 571, section 397(1)) [1 April 2003] L.N. 12 of 2003 (L.N. 211 of 2002) Cap 571P s 1 (Omitted as spent) (Omitted as spent) Cap 571P s 2 Interpretation In these Rules, unless the context otherwise requires- "dealing in securities" (证券交易) has the meaning assigned to it by Part 2 of Schedule 5 to the Ordinance; "margin client" (保证金客户) means- (a) in relation to a corporation licensed for dealing in securities, a client to whom the corporation provides securities margin financing; or (b) a client of a corporation licensed for securities margin financing;"systems of control" (监控系统), in relation to a licensed corporation or an associated entity of an intermediary, means in so far as applicable the internal controls and trading, accounting, settlement and stock holding systems it has implemented to ensure its compliance with the provisions specified in section 4(1)(e). Cap 571P s 3 Financial statements and other documents to be prepared by licensed corporations and associated entities of intermediaries (1) For the purposes of section 156(1)(a) of the Ordinance, the financial statements and other documents that a licensed corporation shall prepare, in respect of each financial year, are- (a) a set of accounts consisting of each of the following, prepared in accordance with generally accepted accounting principles- (i) a profit and loss account; (ii) a balance sheet; and (iii) notes to the accounts;(b) in so far as applicable, the following returns as referred to in section 56 of the Securities and Futures (Financial Resources) Rules (Cap 571 sub. leg. N), each made up to the last day of the financial year- (i) a liquid capital computation; (ii) a required liquid capital computation; (iii) a summary of bank loans, advances, credit facilities and other financial accommodation available to it; (iv) an analysis of its margin clients; (v) an analysis of collateral received from margin clients; (vi) an analysis of its rolling balance cash clients; (vii) an analysis of its client assets; and (viii) an analysis of its proprietary derivative positions; and(c) a business and risk management questionnaire.(2) For the purposes of section 156(2)(a) of the Ordinance, the financial statements and other documents required to be prepared by a licensed corporation that ceases carrying on all of the regulated activities for which it is licensed are- (a) a set of accounts as referred to in subsection (1)(a); and (b) a liquid capital computation as referred to in subsection (1)(b)(i).(3) For the purposes of section 156(1)(a) of the Ordinance, the financial statements and other documents that an associated entity of an intermediary shall prepare, in respect of each financial year, are- (a) a set of accounts consisting of each of the following, prepared in accordance with generally accepted accounting principles- (i) a profit and loss account; (ii) a balance sheet; and (iii) notes to the accounts;(b) an analysis of client assets as at the end of the financial year; and (c) a business and risk management questionnaire.(4) For the purposes of section 156(2)(a) of the Ordinance, the financial statements and other documents required to be prepared by an associated entity of an intermediary that ceases to be such an associated entity are- (a) a set of accounts as referred to in subsection (3)(a); and (b) an analysis of client assets as referred to in subsection (3)(b). Cap 571P s 4 Auditor's report (1) For the purposes of section 156(1)(b) or (2)(b) of the Ordinance, an auditor's report required to be submitted by a licensed corporation or an associated entity of an intermediary shall contain a statement by the auditor as to whether, in the auditor's opinion- (a) the profit and loss account and the balance sheet are in accordance with the records kept by the licensed corporation or the associated entity (as the case may be) under the Securities and Futures (Keeping of Records) Rules (Cap 571 sub. leg. O) and satisfy the requirements of these Rules; (b) the balance sheet gives a true and fair view of the state of affairs of the licensed corporation or the associated entity (as the case may be) as at the end of the financial year to which it relates; (c) the profit and loss account gives a true and fair view of the profit or loss of the licensed corporation or the associated entity (as the case may be) for the financial year to which it relates; (d) in the case of a licensed corporation, each of the returns as referred to in section 3(1)(b) or (2)(b) (as the case may be) is correctly compiled from the records of the licensed corporation or, if not correctly compiled, the nature and extent of the incorrectness; (e) in so far as applicable, during the financial year in question, the licensed corporation or the associated entity (as the case may be) had systems of control in place that were adequate to ensure compliance with- (i) sections 4, 5, 6, 8(4), 10 and 11 of the Securities and Futures (Client Money) Rules (Cap 571 sub. leg. I); and |
