| (Cap 571, section 151) [1 April 2003] L.N. 12 of 2003 (L.N. 210 of 2002) Cap 571O s 1 (Omitted as spent) PART 1 PRELIMINARY (Omitted as spent) Cap 571O s 2 Interpretation In these Rules, unless the context otherwise requires- "asset management" (资产管理) has the meaning assigned to it by Part 2 of Schedule 5 to the Ordinance; "margined transaction" (保证金交易) means a contract entered into in Hong Kong by an intermediary with or on behalf of a client of the intermediary in the conduct by the intermediary of any of the businesses which constitute- (a) any regulated activity for which the intermediary is licensed or registered, that is a contract for- (i) a dealing in securities (except a market contract); or (ii) a dealing in futures contracts (except a market contract); or(b) the regulated activity of leveraged foreign exchange trading for which the intermediary is licensed, that is a leveraged foreign exchange contract,which requires the client to- (c) pay a margin to the intermediary; or (d) provide security to the intermediary to meet the client's obligations,other than under an arrangement where financial accommodation is provided to the client by the intermediary;"margin value" (保证金价值), in relation to each description of securities collateral deposited with an intermediary, means the maximum amount of money which the client by whom and on whose behalf the securities collateral is deposited is permitted to borrow, or otherwise secure other forms of financial accommodation, from the intermediary against that particular description of securities collateral; "record" (纪录) has the same meaning as in section 1 of Part 1 of Schedule 1 to the Ordinance except that it does not include any tape or other sound recording of any telephone conversation; "systems of control" (监控系统), in relation to an intermediary or an associated entity of an intermediary, means any internal controls and trading, accounting, settlement and stock holding systems it has implemented to ensure its compliance with- (a) sections 4, 5, 6, 8(4), 10 and 11 of the Securities and Futures (Client Money) Rules (Cap 571 sub. leg. I); and (b) sections 4(4), 5, 10(1) and 12 of the Securities and Futures (Client Securities) Rules (Cap 571 sub. leg. H). Cap 571O s 3 General record keeping requirements for intermediaries PART 2 KEEPING OF RECORDS Division 1-General rules (1) An intermediary shall, in relation to the businesses which constitute any regulated activities for which it is licensed or registered- (a) keep, where applicable, such accounting, trading and other records as are sufficient to- (i) explain, and reflect the financial position and operation of, such businesses; (ii) enable profit and loss accounts and balance sheets that give a true and fair view of its financial affairs to be prepared from time to time; (iii) account for all client assets that it receives or holds; (iv) enable all movements of such client assets to be traced through its accounting systems and, where applicable, stock holding systems; (v) reconcile, on a monthly basis, any differences in its balances or positions with other persons, including- (A) its associated entities; (B) recognized exchange companies; (C) clearing houses; (D) other intermediaries; (E) custodians; and (F) banks, and show how such differences were resolved;(vi) demonstrate- (A) compliance by it with sections 4, 5, 6, 8(4), 10 and 11 of the Securities and Futures (Client Money) Rules (Cap 571 sub. leg. I); (B) compliance by it with sections 4(4), 5, 10(1) and 12 of the Securities and Futures (Client Securities) Rules (Cap 571 sub. leg. H); and (C) that it has systems of control in place to ensure compliance with all of the provisions referred to in sub-subparagraphs (A) and (B); and(vii) enable it readily to establish whether it has complied with the Securities and Futures (Financial Resources) Rules (Cap 571 sub. leg. N);(b) keep those records in such manner as will enable an audit to be conveniently and properly carried out; and (c) make entries in those records in accordance with generally accepted accounting principles.(2) Without limiting the generality of subsection (1)(a), the records referred to in that subsection shall, where applicable, include- (a) the records specified in the Schedule; and (b) the records specified in section 5, 6, 7(2) or 8. Cap 571O s 4 Record keeping requirements for associated entities (1) An associated entity of an intermediary shall, in respect of client assets of the intermediary that it receives or holds- (a) keep, where applicable, such accounting and other records as are sufficient to- (i) account for the client assets; (ii) enable all movements of the client assets to be traced through its accounting systems and, where applicable, stock holding systems; (iii) show separately and account for all receipts, payments, deliveries and other uses or applications of the client assets effected by it, or on its behalf, and on whose behalf such receipts, payments, deliveries or other uses or applications of the client assets have been effected; |
