Money Lenders Ordinance

Guideline No. 5.4.1

Money Lenders Ordinance (the "Ordinance")

I attach a copy of a Gazette notice published on 8 May 1998 which provides for an exemption from a number of provisions of the Ordinance for money lenders who carry on share margin financing and who are connected with the Stock Exchange member through which the share dealing is conducted. Without such exemption, non-compliance with the relevant provisions of the Ordinance can make a money lending agreement unenforceable. The exemption itself is subject to certain conditions.

In the light of this exemption, institutions involved in share margin financing to money lenders are recommended to consult their legal advisers on the implications of the exemption notice and on the extent to which they should satisfy themselves regarding compliance by their money lender customers with the Ordinance and the exemption notice.

I would be grateful if you would circulate this letter and the attached exemption notice to your members.