SECURITIES (ACCOUNTS AND AUDIT) REGULATIONS

SECURITIES (ACCOUNTS AND AUDIT) REGULATIONS

(ACCOUNTS AND AUDIT) REGULATIONS

(Cap. 333, section 146)

[30 December 1977.]

1. These regulations may be cited as the Securities (Accounts and
Audit) Regulations.

2. (1) The profit and loss account required to be prepared by a
dealer or a dealing partnership under section 88(1) of the Ordinance
shall contain the particulars set out in Form 1 in the Schedule.

(2) The balance sheet required to be prepared by a dealer or a
dealing partnership under section 88(1) of the Ordinance shall contain
particulars set out in Form 2 in the Schedule, and shall be accompanied
by a computation of his or their net capital and liquidity margin for the
purposes of section 65B of the Ordinance.

(3) [Deleted, L.N. 38/86]

3. An auditor's report under section 88(1) of the Ordinance shall
contain a statement by the auditor as to whether

(a)he has obtained all the information and explanations which to
the best of his knowledge and belief are necessary for the
purpose of the audit;

(b) in the auditor's opinion-

(i) the dealer has properly kept the records required to be
kept by him under section 83 of the Ordinance;

(ii) the profit and loss account and the balance sheet are in
accordance with the records kept under section 83 of the
Ordinance and comply with the requirements of these
regulations;

(iii) the dealer has properly kept all trust accounts in
accordance with section 84 of the Ordinance;

(iv) the profit and loss account and balance sheet give a
true and fair view of the dealer's financial position for the
financial year to which they relate;

(v) the computation of net capital and liquidity margin for
the purposes of section 65B of the Ordinance is correctly
compiled from the books and records of the dealer or the
dealing partnership, as the case may be, and if such is not
correctly compiled, the nature and extent of the incorrectness;

(ba) there appears to the auditor to have been any contravention
of section 65B of the Ordinance by the dealer or dealing
partnership, as the case may be, during the financial year
covered by the auditor's report; and





(c)there are any securities to which section 83(3)(a)(vi) of the
Ordinance applies which have been deposited with or
otherwise pledged or charged to any third party whether as
security for loans or advances made to the dealer, or any
related corporation, or for any other purpose and if so,

(i) whether at the date of the balance sheet, the loan or
advance was outstanding;

(ii) whether the auditor has inspected the written
authorizations under section 81(3) of the Ordinance; and

(iii) in the case where the securities have been deposited
with or otherwise pledged or charged to any third party for a
purpose other than as security for loans or advances made to
the dealer or any related corporation, what that purpose is.

SCHEDULE

FORM 1

..........................

(Name of dealer or dealing partnership)

Profit and Loss Account for the year ended .....................

TURNOVER (Note 1)

REVENUE
Commission and brokerage-
(a) securities dealing-
(i) on the Unified Exchange
(ii) on overseas exchanges
(iii) other
(b) other than on securities dealing

Underwriting commission for securities
listed on(a) the Unified Exchange (b)
overseas exchanges

Profit (Loss) on trading in securities
listed on(a) the Unified Exchange (b)
overseas exchanges

Dividends and interest on investments

Interest from-
(a) clients
(b) banks and deposit-taking companies
(c) other sources

Exchange difference

Other revenue (supply details)

[reg. 2.]

Current Year Last Year





Current Year Last Year

EXPENSES

Directors' emoluments-

(a) fees

(b) other emoluments

Salaries and allowances (excluding, in the case of
sole proprietorships or partnerships, salaries of
proprietor or partners)

Interest to---

(a) clients

(b) banks and deposit-taking companies

(c) others

Commission

Rent and rates

Audit fee

Professional fees

Bad and doubtful debts

Depreciation or amortization

Other expenses (supply details)

NET PROFIT (LOSS) FOR THE YEAR

TAXATION

NET PROFIT (LOSS) FOR THE YEAR
AFTER TAXATION

BALANCE BROUGHT FORWARD

PROFIT AVAILABLE FOR DISTRIBUTION

Proposed dividend

To be completed in the case of sole proprietorships or
partnerships

Proprietor's or partners' salaries

Share of profits (losses)

BALANCE CARRIED FORWARD





FORM 2

.........................

(Name of dealer or dealing partnership)

Balance Sheet As At ..

FIXED ASSETS
Immovable property-
(a) in Hong Kong
(b) outside Hong Kong
Other fixed assets

Share(s) in the Stock Exchange of Hong Kong
Limited
Shares or Memberships in other exchanges-
(a) local
(b) overseas
Other unquoted investments
Statutory deposits and deposits with exchanges
Other assets (supply details)

CURRENT ASSETS

Listed investments
State the basis of valuation
(if at cost, state the market value)-
(a) in Hong Kong
(b) outside Hong Kong
Amounts receivable arising from the ordinary
course of business of dealing in securities-

(a) clients (distinguish clients trading on
margin accounts)

(b) brokers and dealers
LESS: Provision for bad and doubtful debts
Other amounts receivable-
(a) secured
(b) unsecured
LESS: Provision for bad and doubtful debts
Payments in respect of the purchase of
securities for which a listing is pending on-
(a) the Unified Exchange
(b) overseas exchanges
Payments in advance
Utility, rent and other deposits

Certificates of deposit, acceptances,
floating-rate notes, and other negotiable
instruments commonly known as
commercial papers

Cash at banks-
(a) general account
(b) trust account
Cash at deposit-taking companies
Other current assets (supply details)

Current Year Last Year

Depre
Cost ciation Balance





DEDUCT: CURRENT LIABILITIES

Amounts payable arising from ordinary
course of business of dealing in securities(a)
clients (b) brokers and dealers

Other amounts
payable(a) secured (b)
unsecured

Loans from banks and deposit-taking
companies(a) secured (b) unsecured

Other loans and advances(a)
secured (b) unsecured

Bank overdrafts(a)
secured (b)
unsecured

Accrued expenses

Proposed dividends

Taxation

Other liabilities (supply details)

NET CURRENT ASSETS / (LIABILITIES)

TOTAL ASSETS

LONG-TERM LIABILITIES (supply details)

Representing

SHARE CAPITAL-Authorized

CAPITAL RESERVES

OTHER RESERVES

Issued and fully paid-up

Current Year Last Year

Depre-ition
Balance

To be completed in the case of sole proprictorships or partnerships.

CAPITAL ACCOUNT

CURRENT ACCOUNT

PROFIT AND LOSS ACCOUNT

Show movements in these accounts during
the year.

In the case of partnerships, specify the
balance in each account in respect of each
partner and distinguish amounts arising from
transactions in securities.







(in the case of partnerships, the balance sheet must be signed by at least one
general partner)

Notes 2 andlor 3.

Notes 2 andlor 3.

Notes 2 andlor 3.

Notes 2 andlor 3.

Notes 2 andlor 3.

Notes 2 andlor 3.





NOTES TO THE ACCOUNTS
1. (a) Turnover means the total value of transactions arising out of the business of
dealing in securities other than underwriting of securities undertaken by
the dealer or dealing partnership. (b) State the turnover in relation to
dealing in securities

(i)for own account, partner's account,
director's account and the accounts
of associated companies or
companies within the group in
which the dealer is a member

(A) on the Unified Exchange

(B) on overseas exchanges

(C) on others
(ii) for clients-

(A) on the Unified Exchange

(B) on overseas exchanges

(C) on others

2.In the case of a dealer which is a corporation, distinguish balances due to or
from

(a) a director

(b)an associated company or company
within the group in which the dealer
is a member

3. Where any amount is secured, specify by way of note the following particulars

(a) name(s) of interested party(ies)
(b) amount due

(c) whether it is interest bearing, and
if so, the rate of interest

(d) date and terms of repayment

(e)nature of security, market value and
the identity of the owner of the
security

4. Contingent liabilities and capital commit

ments-

(a) underwritings and sub-underwritings
(b) uncalled amounts on securities
(c) other contingent liabilities-

(i) secured (supply details)

(ii) unsecured (supply details)

(d) capital commitments (supply details)

5. Transactions in foreign currencies-







(a) total assets in foreign currency
included in Balance Sheet

(b) total liabilities in foreign
currency
included in Balance Sheet

Last Year This Year
L.N. 284/76. L.N. 38/86. Citation. Forms of profit and loss account and balance sheet. L.N. 38/86. Schedule, Form 1. L.N. 38/86. Schedule, Form 2. Auditor's report. L.N. 38/86. L.N. 38/86. L.N. 38/86. L.N. 38/86. Notes 2 and/or 3. Notes 2 and/or 3. Notes 2 and/or 3. Notes 2 and/or 3.Notes 2 and/or 3. Notes 2 and/or 3.Notes 2 and/or 3. Notes 2 and/or 3.

L.N. 284/76. L.N. 38/86. Citation. Forms of profit and loss account and balance sheet. L.N. 38/86. Schedule, Form 1. L.N. 38/86. Schedule, Form 2. Auditor's report. L.N. 38/86. L.N. 38/86. L.N. 38/86. L.N. 38/86. Notes 2 and/or 3. Notes 2 and/or 3. Notes 2 and/or 3. Notes 2 and/or 3.Notes 2 and/or 3. Notes 2 and/or 3.Notes 2 and/or 3. Notes 2 and/or 3.

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