GENERAL LOAN AND STOCK ORDINANCE

GENERAL LOAN AND STOCK ORDINANCE

LAWS OF HONG KONG

GENERAL LOAN AND STOCK ORDINANCE

CHAPTER 72





CHAPTER 72.

GENERAL LOAN AND STOCK ORDINANCE.

ARRANGEMENT OF SECTIONS.

Section...................................... Page.

1. Short title ............................ ... ... ... ... ... ... 2
2. Interpretation ............................ ... ... ... ... ... ... 2

3. Loans to be raised by debentures or stock ... ... ... ... ... ... 2

4. Loans to be a charge upon general revenue ... ... ... ... 2

5....................Borrowing upon debentures ... ... ... ... ... ... ... 2
6....................Amount of each debenture ... ... ... ... ... ... ... ... ... 2

7. Debentures may be redeemed by annual drawings or by purchase in the

market or on a date fixed ............ ... ... ... ... ... ... 3

8...............Interest coupons ..........1 ... ... ... ... ... ... ... 3

9......................Form of debenture and coupons ... ... ... ... ... ... ... ... 3

10. Debentures and coupons transferable by delivery ... ... ... ... 3

11..................Registry of debentures .... ... ... ... ... ... ... ... ... ... 3

1 Y..............Payment of interest .......... ... ... ... ... ... ... ... ... ... 3

13. Mode of providing for payment of interest on debentures ... ... 3

14. Further sums to be remitted for the redemption of the debentures 4

15. Application of sinking fund ............... ... ... ... ... ... ... 4

16. Creation of sinking fund for redemption of debentures payable on a

fixed date ............................ ... ... ... ... 4

17. Disposal of sinking fund when debentures are redeemed by purchase or

by annual drawings ................... ... ... ... ... ... ... 4

is. Appointment of day for drawing of debentures ... ... 5

19. Notice of time and place appointed for drawing ... ... ... ... 5

20. Mode of drawing ........................ ... ... ... ... ... ... 5

21. Notice of debentures drawn for redemption ... ... 5

22. Payment of drawn debentures ............... ... ... ... ... ... 5

23. Cesser of interest from day appointed for payment of principal 5

24. Redeemed debentures to be cancelled ..... ... ... ... ... 5
25. Borrowing upon stock 6
26. When the principal is to be repaid ........ ... ... ... ... 6

27. Mode of providing for the payment of interest on stock ... ... 6
28. Mode of providing for payment of principal of stock 6







29. Creation of sinking fund ... ... ... .. 1 ... 1 .. ... ... ... ... 7

30. Charge upon general revenue ... 1 .. ... ... ... ... ... ... ... 7

31. Expenses to be paid out of sinking fund ... ... ... ... ... ... ... 7

32. Powers of Governor ... ... ... ... ... ... ... ... ... 7

33. Exchange of securities for stock ... ... ... ... ... ... ... ... ... 8

34. Converted securities to be cancelled 8
35. Trustees to apportion amount of sinking fund released by conversion 8
36. Sinking funds released: how to be disposed of 8

37. Creation, inscription, registration, issue, conversion, and transfer of stock 9

38. Raising of loans in Hong Kong ... .. ... ... ... ... ... ... ... 9

39. Regulations under Colonial Stock Act, 1877 and 1948 ... ... ... ... 9





CHAPTER 72.

GENERAL LOAN AND STOCK.

To declare the terms and conditions applicable to loans authorized to
be raised by the Government of Hong Kong and to provide for the
creation of Hong Kong stock.

[27th June, 1952.1

WHEREAS it is expedient to define in one Ordinance the terms and
conditions applicable to loans hereinafter authorized to be raised
by the legislature of Hong Kong and whereas it is expedient to
provide for the creation of stock and to enable the Colony of Hong
Kong to take advantage of the provisions of the Acts of the
Imperial Parliament entitled the Colonial Stocks Acts, 1877 to 1948,
and any Act amending the same:

1. This Ordinance may be cited as the General Loan and Stock
Ordinance.

2. In this Ordinance, unless the context otherwise requires'Crown
Agents' means the persons for the time being acting as Crown Agents
for Oversea Governments and Administrations in England, or any of
them.,

'stock' includes both inscribed and registered stock:

'registered stock' means stock transferable by instrument in writing.

3. Whenever by any Ordinance authority shall have been given. or
shall hereafter be given, to raise any sum of money for the purposes
mentioned in such Ordinance, the Governor. or the Crown Agents acting
on his behalf, may from time to time, as he or they may deem expedient,
raise such sum either by debentures or by stock, or partly by debentures
and partly by stock.

4. The principal moneys and interest represented by debentures or
stock issued under the provisions of this Ordinance are hereby charged
upon and shall be payable out of the general revenues and assets of the
Colony of Hong Kong.

5. When the Governor. or the Crown Agents acting on his behalf.
shall deem it expedient to raise money by debentures, such debentures
shall be issued in the United Kingdom on behalf of the Government of
Hong Kong by the Crown Agents, upon the best and most favourable
terms that can be obtained, and shall be signed by any one of them on
that behalf.

6. Every debenture issued under the provisions of this Ordinance
shall be for the sum of not less than one hundred pounds sterling.





7. The debentures shall be redeemable either-

(a)at par on a fixed date to be declared on the issue of the
debentures such date not being later than sixty years from the
date of issue:

Provided that the Governor, or the Crown Agents acting
on his behalf, may reserve the option to redeem the
debentures prior to such date on such conditions as may be
declared at the time of issue., or

(b)by annual drawings at par or at the option of the Governor, or
the Crown Agents acting on his behalf, by purchase at or
below par.

8. There shall be attached to every debenture coupons for the
payment of the interest to become due in each half-year upon the
principal represented by the debenture. The coupons shall be sufficient
in number to provide for the payment of the interest, either during the
whole period for which the debenture has to run, or for such limited
period as the Crown Agents, acting on behalf of the Government of
Hong Kong may determine.

9. The debentures and the coupons thereto shall be in such form
as the Governor, or the Crown Agents acting on his behalf, may direct
or approve.

10. Every debenture and coupon, and the right to receive the
principal and interest represented thereby, shall be transferable by
delivery.

11. Every debenture shall, before being issued, be registered in a
register book to be kept for that purpose at the office in London of the
Crown Agents.

12. The interest upon the principal represented by each debenture
shall run from the day named in that behalf in the debenture, and shall
be paid half-yearly on the days named in that behalf in the debenture, at
the office in London of the Crown Agents.

13. So long as any of the debentures remain outstanding, the
Governor shall, in each half-year ending with the day on which the
interest on the debentures falls due, appropriate out of the general
revenues and assets of the Colony of Hong Kong a sum equal to one
half-year's interest on the whole of the debentures issued, including any
which may have been redeemed, but exclusive of any which may have
been at any time exchanged for stock, and shall remit that sum to the
Crown Agents at such time as will enable them to pay thereout the then
current halfyear's interest on the day on which it falls due. Debentures
shall not be deemed to be outstanding for the purpose of this Ordinance
by reason only that one or more of the debentures have not been
presented for payment on the day appointed for payment and have, in
consequence, not been paid.





14. (1) The Governor shall, in the half-year ending on the
date specified in the terms of issue of the loan as that on which
the first contribution to the sinking fund shall be taken and in
each subsequent half-year, appropriate out of the said revenues
and assets of the Colony of Hong Kong for the formation of a
sinking fund, an additional sum equal to one half of the annual
contribution specified in the prospectus or, in the case of a loan
not issued publicly, in the terms of issue relating to the loan,
in respect of the total nominal amount of all the debentures
issued, including any which may have been redeemed, but exclu-
sive of any which may have been at any time exchanged for stock,
and shall remit that sum to the Crown Agents with the remit-
tance hereinbefore mentioned.
(2) Notwithstanding anything to the contrary contained in
subsection (1) if at any time the trustees of the sinking fund of
any loan issued under the provisions of this Ordinance are
satisfied that the value of the fund will be sufficient with further
accumulations of interest but without further payment of contri-
butions to enable the loan to be redeemed out of the proceeds
of the sinking fund not later than the final redemption date. the
Governor may with the approval of the Secretary of State suspend
further contributions to the said sinking fund: Provided always
that contributions to the sinking fund shall be recommenced if
the trustees shall at any time inform the Governor that this is
necessary.

15. The sinking fund shall be applied in the first place in
payment of all expenses of, or incidental to. the redemption of
the debentures and the cost and expenses of all notices required
by this Ordinance to be given, and in the next place, and subject
to the aforesaid payments, in repayment of the principal moneys
for the time being represented by the debentures.

16. In the case of debentures redeemable on a fixed date,
the Crown Agents shall place at interest or invest in the purchase
of such securities as may be approved by the Secretary of State
so much of the money so remitted to them as aforesaid as shall
not be required for the payment of interest for the current half-
year, as a sinking fund for the final extinction of the debt, and
the Crown Agents shall also place at interest or invest in the
purchase of like securities the accumulations of interest or the
dividends, interest or produce of such investments and may, from
time to time, with the approval of the Secretary of State, change
any such investments and shall hold such fund in trust for the
repayment of the principal moneys for the time being represented
by the debentures.

17. In the case of debentures redeemable by annual draw-
ings, the Crown Agents shall place and keep the moneys so
remitted to them, or so much thereof as may not be required for
immediate payments, at interest. and shall hold all such moneys
and the accumulation thereon in trust to apply them in the first





place to the purchase of the debentures when they can be obtained at a
price not exceeding par, and secondly, to the redemption of the
debentures by means of annual drawings.

18. After the date specified in the Ordinance authorizing a loan as
that on which the contributions to the sinking fund shall commence in
respect of that loan, and so long thereafter as any of the debentures
remain outstanding and unsatisfied, the Crown Agents shall in every
year, unless the whole of the money applicable in that year to the
redemption of debentures has been applied in the purchase thereof,
appoint a day in that year for the drawing by lot of the debentures to be
redeemed.

19. If a day is appointed for drawing, the Crown Agents shall give,
by advertisement in the London 'Times' newspaper. not less than
fifteen days' previous notice, specifying the day on which, and the hour
and place at which, the drawing will take place.

20. On the day and at the hour and place so specified the Crown
Agents shall hold a meeting, at which the holder of any debenture may,
if he thinks fit, be present, and shall then in the presence of such
debenture holders, if any, as may attend, and of a notary public. draw by
lot, out of the whole number of debentures for the time being
outstanding, debentures of the specified nominal amount.

21. The Crown Agents shall thereupon declare the distinguishing
numbers of the debentures drawn for redemption, and shall, as soon as
may be, by advertisement in the London 'Times' newspaper, specify
those numbers and appoint a day, not being later as to each debenture
than the day on which the then current half-year's interest thereon is
payable, on which the principal moneys represented by the debentures
so distinguished will be repaid.

22. On the day so appointed the Crown Agents shall, at their office
in London, on demand, pay to the holders of the debentures drawn for
repayment the principal moneys represented by those debentures, with
all interest payable thereon up to that day.

23. From and after the day appointed for the repayment of any
debenture all interest on the principal moneys represented thereby shall
cease and determine, whether payment of the principal shall have been
demanded or not.

24. Upon the repayment of the principal moneys represented by
any debenture, the debenture, with all coupons thereunto belonging,
shall be delivered up to the Crown Agents, to be by them cancelled and
disposed of in such a manner as the Governor, or the Crown Agents
acting on his behalf, may decide. Any debenture redeemed by purchase
shall likewise be so cancelled and disposed of.





25. When the Governor, or the Crown Agents acting on his behalf,
shall deem it expedient to raise money by the issue of Hong Kong stock,
then such stock shall be issued in the United Kingdom by the Crown
Agents under the provisions of the Act of the Imperial Parliament
entitled 'The Colonial Stock Act. 1877' upon the best and most
favourable terms that can be obtained.

26. All the stock which may be created under the provisions of this
Ordinance shall be redeemable at par on a date. to be named in that
behalf by the Crown Agents when issuing the stock. such date not
being later than sixty years from the date of issue:

Provided that the Governor. or the Crown Agents acting on his
behalf, may reserve the option to redeem the stock in whole or in part.
by drawings or otherwise, at any time prior to such date on such
conditions as may be declared at the time of issue. From and after the
date appointed for the redemption of the stock or any part of it all the
interest on the principal moneys represented thereby shall cease and
determine. whether payment of the principal shall have been demanded
or not.

27. So long as any of the stock shall remain unredeemed, the
Governor shall, in each half-year ending with the day on which the
interest on such stock falls due, appropriate out of the general revenues
and assets of the Colony of Hong Kong a sum equal to one half-year's
interest on the whole of such stock. and shall remit that sum to the
Crown Agents at such time as will enable them to pay thereout the then
current half-year's interest on the day when it falls due.

28. (1) The Governor shall. in the half-year ending on the date
specified in the terms of issue of the loan as that on which the first
contribution to the sinking fund shall be taken and in each subsequent
half-year, appropriate out of the said revenues and assets of the Colony
of Hong Kong for the formation of a sinking fund an additional sum
equal to one half of the annual contribution specified in the prospectus
or, in the case of a loan not issued publicly, in the terms of issue relating
to the loan, in respect-of the total nominal amount of such stock
including any such stock which may at any time have been issued in
exchange for debentures under the authority of this Ordinance, and
shall remit the sum to the Crown Agents with the remittance
hereinbefore mentioned.

(2) Notwithstanding anything to the contrary contained in
subsection (1) if at any time the trustees of the sinking fund of any loan
issued under the provisions of this Ordinance are satisfied that the
value of the fund will be sufficient with further accumulations of interest
but without further payment of contributions to enable the loan to be
redeemed out of the proceeds





of the sinking fund not later than the final redemption date, the
Governor may with the approval of the Secretary of State suspend
further contributions to the said sinking fund: Provided always
that contributions to the sinking fund shall be recommenced if
the trustees shall at any time inform the Governor that this is
necessary.

29. The Crown Agents shall, for the purpose of forming
such sinking fund, from time to time place at interest or invest
in the purchase of such securities as may from time to time be
approved by the Secretary of State so much of the money so
remitted to them as aforesaid as shall not be required for the
payment of interest for the current half-year and shall also place
at interest or invest in the purchase of like securities, the accu-
mulations of interest or the dividends, interest, or produce of
such investments, and may from time to time, with the approval
of the Secretary of State. change any such investments, and shall
hold such fund in trust for the repayment of the principal moneys
for the time being represented by the stock.

30. In case the sinking funds provided for by this Ordinance
shall be insufficient for the payment of all the principal moneys
borrowed under the authority of this Ordinance at the time the
same shall have become due, the Governor shall make good the
deficiency out of the general revenues and assets of the Colony
of Hong Kong.

31. All expenses of or incidental to the management of the
sinking fund. or to the payment of the principal moneys borrowed,
shall be paid out of the sinking fund.

32. The Governor shall also have, and may from time to
time exercise, the following powers and authorities or any of
them-
(a)he may authorize the Crown Agents when issuing any
loan in the form of debentures to declare that such
debentures will be convertible into stock at such dates
and on such terms and conditions as may be prescribed
by the Crown Agents at the time of the issue of the
debentures;
(b)he may declare all or any of the Hong Kong loans,
whether existing in the form of stock or debentures. and
whether issued before or after the commencement of this
Ordinance, to be convertible into stock, to be issued
under the provisions of this Ordinance;
(c)he may authorize the creation and issue of such an
amount of stock in exchange for the securities held for
such loans as may be necessary;





(d)he may authorize the creation and sale of any such stock or
debentures for the purpose of raising money for redeeming
any outstanding loans whether issued before or subsequent
to the passing of this Ordinance, for paying any expense in
the creation of stock. and otherwise for carrying out the
provisions of this Ordinance;

(e)any conversion so authorized may be effected either by an
arrangement with the holders of existing securities or by
purchase thereof out of moneys raised by the sale of stock. or
partly in one way and partly in the other.

33. Nothing in this Ordinance contained shall authorize an increase
of the capital or of the annual charge on any loan, except

(a)when securities exchanged for stock bear a rate of interest not
less than the stock, an additional amount of stock may be
created and issued to make up the difference in saleable value
between the securities and the stock;

(b)in the case of the conversion of securities into stock the
Crown Agents shall issue such an amount of stock as may be
required to defray the stamp duties and all other expenses
incidental to the conversion;

(c)in accordance with such terms and conditions as may be
prescribed under paragraph (a) of section 32.

34. The securities exchanged or otherwise converted into stock
under the provisions of this Ordinance shall be forthwith cancelled by
the Crown Agents, and the debentures surrendered shall be cancelled
and transmitted to the Governor.

35. The trustees of the sinking fund appointed under this
Ordinance, and acting under any Ordinance authorizing the issue of any
securities which may be exchanged into stock or cancelled or purchased
under the provisions of this Ordinance, shall determine what amount of
the sinking fund held by them and created for repayment of such
securities shall be released and in the determination of such question
the trustees shall take into consideration the value of the whole
investments held by them on account of such sinking funds, the amount
of the debt remaining a charge on such sinking funds. and such matters
as the trustees may think fit to take into account.

36. So much of the sinking funds as may be released shall either be
transferred unto the trustees of the stock sinking fund, or be disposed
of in such a manner as the Governor with the advice and consent of the
Legislative Council may direct.





37. The Crown Agents may from time to time, at the request of the
Governor, make arrangements for all or any of the following things

(a) for inscribing and registering stock in their books,

(b)for managing the creation, inscription, registration and issue
of stock, including the issue of certificates of title in respect of
such stock;

(c) for effecting the conversion of loans into stock.,

(d)for paying interest on stock and managing the transfers
thereof;

(e)for issuing stock certificates to bearer, and, as often as
occasion shall require, re-inscribing or re-registering them.

for effecting the exchange or conversion of inscribed stock
into registered stock.

38. This Ordinance shall be applicable only to the raising of loans
in the United Kingdom and nothing in this Ordinance contained shall
prevent the raising of loans in the Colony upon such terms and
conditions as shall be specified in any Ordinance authorizing the raising
of such loans.

39. Authority is hereby given for the making of regulations under
section 16 of the Colonial Stock Act, 1877, to provide, that, in
accordance with section 1 of the Colonial Stock Act, 1948, stock issued
under the provisions of this Ordinance shall be transferable by
instrument in writing in accordance with the regulations and in no other
manner.
Originally 20 of 1952. Preamble. (40 & 41 Vict. c. 59; 55 & 56 Vict. c. 35; 63 & 64 Vict. c. 62; 24 & 25 Geo. 5 c. 47; 12, 13 & 14 Geo. 6 c. 1.) Short title. Interpretation. Loans to be raised by debentures or stock. Loans to be a charge upon general revenue. Borrowing upon debentures. Amount of each debenture. Debentures may be redeemed by annual drawings or by purchase in the market or on a date fixed. Interest coupons. Form of debenture and coupons. Debentures and coupons transferable by delivery. Registry of debentures. Payment of interest. Mode of providing for payment of interest on debentures. Further sums to be remitted for the redemption of the debentures. Application of sinking fund. Creation of sinking fund for redemption of debentures payable on a fixed date. Disposal of sinking fund when debentures are redeemed by purchase or by annual drawings. Appointment of day for drawing of debentures. Notice of time and place appointed for drawing. Mode of drawing. Notice of debentures drawn for redemption. Payment of drawn debentures. Cesser of interest from day appointed for payment of principal. Redeemed debentures to be cancelled. Borrowing upon stock. (40 & 41 Vict. Cap. 59). When the principal is to be repaid. Mode of providing for the payment of interest on stock. Mode of providing for payment of principal of stock. Creation of sinking fund. Charge upon general revenue. Expenses to be paid out of sinking fund. Powers of Governor; debentures convertible into stock on conditions prescribed by the Crown Agents at time of issue; conversion of loans generally; creation and issue of stock in exchange for other securities; creation and sale of stock or debentures to raise loans and for other purposes; arrangements for conversion. Exchange of securities for stock. Converted securities to be cancelled. Trustees to apportion amount of sinking fund released by conversion. Sinking funds released : how to be disposed of. Creation, inscription, registration, issue, conversion, and transfer of stock. Raising of loans in Hong Kong. Regulations under Colonial Stock Act, 1877 and 1948. (40 & 41 Vict. c. 59; 12, 13 & 14 Geo. 6 c. 1.)

Originally 20 of 1952. Preamble. (40 & 41 Vict. c. 59; 55 & 56 Vict. c. 35; 63 & 64 Vict. c. 62; 24 & 25 Geo. 5 c. 47; 12, 13 & 14 Geo. 6 c. 1.) Short title. Interpretation. Loans to be raised by debentures or stock. Loans to be a charge upon general revenue. Borrowing upon debentures. Amount of each debenture. Debentures may be redeemed by annual drawings or by purchase in the market or on a date fixed. Interest coupons. Form of debenture and coupons. Debentures and coupons transferable by delivery. Registry of debentures. Payment of interest. Mode of providing for payment of interest on debentures. Further sums to be remitted for the redemption of the debentures. Application of sinking fund. Creation of sinking fund for redemption of debentures payable on a fixed date. Disposal of sinking fund when debentures are redeemed by purchase or by annual drawings. Appointment of day for drawing of debentures. Notice of time and place appointed for drawing. Mode of drawing. Notice of debentures drawn for redemption. Payment of drawn debentures. Cesser of interest from day appointed for payment of principal. Redeemed debentures to be cancelled. Borrowing upon stock. (40 & 41 Vict. Cap. 59). When the principal is to be repaid. Mode of providing for the payment of interest on stock. Mode of providing for payment of principal of stock. Creation of sinking fund. Charge upon general revenue. Expenses to be paid out of sinking fund. Powers of Governor; debentures convertible into stock on conditions prescribed by the Crown Agents at time of issue; conversion of loans generally; creation and issue of stock in exchange for other securities; creation and sale of stock or debentures to raise loans and for other purposes; arrangements for conversion. Exchange of securities for stock. Converted securities to be cancelled. Trustees to apportion amount of sinking fund released by conversion. Sinking funds released : how to be disposed of. Creation, inscription, registration, issue, conversion, and transfer of stock. Raising of loans in Hong Kong. Regulations under Colonial Stock Act, 1877 and 1948. (40 & 41 Vict. c. 59; 12, 13 & 14 Geo. 6 c. 1.)

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