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18 March 2015 7247 LEGISLATIVE COUNCIL ─ 18 March 2015 7247 OFFICIAL RECORD OF PROCEEDINGS Wednesday, 18 March 2015 The Council met at Eleven o'clock MEMBERS PRESENT: THE PRESIDENT THE HONOURABLE JASPER TSANG YOK-SING, G.B.S., J.P. THE HONOURABLE ALBERT HO CHUN-YAN THE HONOURABLE LEE CHEUK-YAN THE HONOURABLE JAMES TO KUN-SUN THE HONOURABLE CHAN KAM-LAM, S.B.S., J.P. THE HONOURABLE LEUNG YIU-CHUNG DR THE HONOURABLE LAU WONG-FAT, G.B.M., G.B.S., J.P. THE HONOURABLE EMILY LAU WAI-HING, J.P. THE HONOURABLE TAM YIU-CHUNG, G.B.S., J.P. THE HONOURABLE ABRAHAM SHEK LAI-HIM, G.B.S., J.P. THE HONOURABLE TOMMY CHEUNG YU-YAN, S.B.S., J.P. THE HONOURABLE FREDERICK FUNG KIN-KEE, S.B.S., J.P. THE HONOURABLE VINCENT FANG KANG, S.B.S., J.P. THE HONOURABLE WONG KWOK-HING, B.B.S., M.H. 7248 LEGISLATIVE COUNCIL ─ 18 March 2015 PROF THE HONOURABLE JOSEPH LEE KOK-LONG, S.B.S., J.P., Ph.D., R.N. THE HONOURABLE JEFFREY LAM KIN-FUNG, G.B.S., J.P. THE HONOURABLE ANDREW LEUNG KWAN-YUEN, G.B.S., J.P. THE HONOURABLE WONG TING-KWONG, S.B.S., J.P. THE HONOURABLE RONNY TONG KA-WAH, S.C. THE HONOURABLE CYD HO SAU-LAN, J.P. THE HONOURABLE STARRY LEE WAI-KING, J.P. DR THE HONOURABLE LAM TAI-FAI, S.B.S., J.P. THE HONOURABLE CHAN HAK-KAN, J.P. THE HONOURABLE CHAN KIN-POR, B.B.S., J.P. DR THE HONOURABLE PRISCILLA LEUNG MEI-FUN, S.B.S., J.P. DR THE HONOURABLE LEUNG KA-LAU THE HONOURABLE CHEUNG KWOK-CHE THE HONOURABLE WONG KWOK-KIN, S.B.S. THE HONOURABLE IP KWOK-HIM, G.B.S., J.P. THE HONOURABLE MRS REGINA IP LAU SUK-YEE, G.B.S., J.P. THE HONOURABLE PAUL TSE WAI-CHUN, J.P. THE HONOURABLE ALAN LEONG KAH-KIT, S.C. THE HONOURABLE LEUNG KWOK-HUNG THE HONOURABLE ALBERT CHAN WAI-YIP LEGISLATIVE COUNCIL ─ 18 March 2015 7249 THE HONOURABLE WONG YUK-MAN THE HONOURABLE CLAUDIA MO THE HONOURABLE JAMES TIEN PEI-CHUN, G.B.S., J.P. THE HONOURABLE NG LEUNG-SING, S.B.S., J.P. THE HONOURABLE STEVEN HO CHUN-YIN THE HONOURABLE FRANKIE YICK CHI-MING THE HONOURABLE WU CHI-WAI, M.H. THE HONOURABLE YIU SI-WING THE HONOURABLE GARY FAN KWOK-WAI THE HONOURABLE MA FUNG-KWOK, S.B.S., J.P. THE HONOURABLE CHARLES PETER MOK, J.P. THE HONOURABLE CHAN CHI-CHUEN THE HONOURABLE CHAN HAN-PAN, J.P. DR THE HONOURABLE KENNETH CHAN KA-LOK THE HONOURABLE CHAN YUEN-HAN, S.B.S., J.P. THE HONOURABLE LEUNG CHE-CHEUNG, B.B.S., M.H., J.P. THE HONOURABLE KENNETH LEUNG THE HONOURABLE ALICE MAK MEI-KUEN, J.P. DR THE HONOURABLE KWOK KA-KI THE HONOURABLE KWOK WAI-KEUNG 7250 LEGISLATIVE COUNCIL ─ 18 March 2015 THE HONOURABLE DENNIS KWOK THE HONOURABLE CHRISTOPHER CHEUNG WAH-FUNG, S.B.S., J.P. DR THE HONOURABLE FERNANDO CHEUNG CHIU-HUNG THE HONOURABLE SIN CHUNG-KAI, S.B.S., J.P. DR THE HONOURABLE HELENA WONG PIK-WAN THE HONOURABLE IP KIN-YUEN DR THE HONOURABLE ELIZABETH QUAT, J.P. THE HONOURABLE MARTIN LIAO CHEUNG-KONG, S.B.S., J.P. THE HONOURABLE POON SIU-PING, B.B.S., M.H. THE HONOURABLE TANG KA-PIU, J.P. DR THE HONOURABLE CHIANG LAI-WAN, J.P. IR DR THE HONOURABLE LO WAI-KWOK, B.B.S., M.H., J.P. THE HONOURABLE CHUNG KWOK-PAN THE HONOURABLE CHRISTOPHER CHUNG SHU-KUN, B.B.S., M.H., J.P. THE HONOURABLE TONY TSE WAI-CHUEN, B.B.S. MEMBER ABSENT: THE HONOURABLE MICHAEL TIEN PUK-SUN, B.B.S., J.P. PUBLIC OFFICERS ATTENDING: THE HONOURABLE MRS CARRIE LAM CHENG YUET-NGOR, G.B.S., J.P. THE CHIEF SECRETARY FOR ADMINISTRATION LEGISLATIVE COUNCIL ─ 18 March 2015 7251 THE HONOURABLE JOHN TSANG CHUN-WAH, G.B.M., J.P. THE FINANCIAL SECRETARY THE HONOURABLE TSANG TAK-SING, G.B.S., J.P. SECRETARY FOR HOME AFFAIRS THE HONOURABLE MATTHEW CHEUNG KIN-CHUNG, G.B.S., J.P. SECRETARY FOR LABOUR AND WELFARE PROF THE HONOURABLE K C CHAN, G.B.S., J.P. SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY MR GODFREY LEUNG KING-KWOK, J.P. SECRETARY FOR COMMERCE AND ECONOMIC DEVELOPMENT THE HONOURABLE LAI TUNG-KWOK, S.B.S., I.D.S.M., J.P. SECRETARY FOR SECURITY THE HONOURABLE EDDIE NG HAK-KIM, S.B.S., J.P. SECRETARY FOR EDUCATION DR THE HONOURABLE KO WING-MAN, B.B.S., J.P. SECRETARY FOR FOOD AND HEALTH THE HONOURABLE WONG KAM-SING, J.P. SECRETARY FOR THE ENVIRONMENT CLERKS IN ATTENDANCE: MR KENNETH CHEN WEI-ON, S.B.S., SECRETARY GENERAL MRS JUSTINA LAM CHENG BO-LING, DEPUTY SECRETARY GENERAL MISS FLORA TAI YIN-PING, ASSISTANT SECRETARY GENERAL MISS ODELIA LEUNG HING-YEE, ASSISTANT SECRETARY GENERAL 7252 LEGISLATIVE COUNCIL ─ 18 March 2015 PRESIDENT (in Cantonese): Will the Clerk please ring the bell to summon Members to the Chamber. (After the summoning bell had been rung, a number of Members entered the Chamber) TABLING OF PAPERS The following papers were laid on the table under Rule 21(2) of the Rules of Procedure: Subsidiary Legislation/Instruments L.N. No. Rating (Exemption) Order 2015 ......................................... 42/2015 District Councils Ordinance (Amendment of Schedule 7) Order 2015 ............................................................. 49/2015 Maximum Amount of Election Expenses (District Council Election) (Amendment) Regulation 2015 .............. 50/2015 Air Pollution Control (Ocean Going Vessels) (Fuel at Berth) Regulation .............................................................. 51/2015 Public Health and Municipal Services Ordinance (Public Pleasure Grounds) (Amendment of Fourth Schedule) Order 2015 ............................................................. 52/2015 Other Papers No. 78 ─ Estimates for the year ending 31 March 2016 General Revenue Account - Consolidated Summary of Estimates - Revenue Analysis by Head LEGISLATIVE COUNCIL ─ 18 March 2015 7253 No. 79 ─ The Hong Kong Academy for Performing Arts Annual Report 2013-2014 and Financial Statements for the year ended 30th June 2014 No. 80 ─ The Lord Wilson Heritage Trust Annual Report 2013-2014 No. 81 ─ Hong Kong Rotary Club Students' Loan Fund Financial Statements for the year ended 31 August 2014 No. 82 ─ Sing Tao Charitable Foundation Students' Loan Fund Financial Statements for the year ended 31 August 2014 Report No. 14/14-15 of the House Committee on Consideration of Subsidiary Legislation and Other Instruments Report of the Bills Committee on Securities and Futures and Companies Legislation (Uncertificated Securities Market Amendment) Bill 2014 Report of the Bills Committee on Veterinary Surgeons Registration (Amendment) Bill 2014 ORAL ANSWERS TO QUESTIONS PRESIDENT (in Cantonese): Questions. First question. Regulation of Crowdfunding 1. MS STARRY LEE (in Cantonese): President, as pointed out by a study report, crowdfunding has become very popular in recent years. The number of crowdfunding projects worldwide exceeded 1 million in 2012, raising as much as 2.7 billion US dollars and recording an increase of 81% on the previous year. The study report also points out that under the Jumpstart Our Business Startups Act promulgated by the US Congress in April 2012, as long as crowdfunding portals have registered with the US Securities and Exchange Commission, small enterprises may make use of such portals to carry out equity crowdfunding, i.e. 7254 LEGISLATIVE COUNCIL ─ 18 March 2015 raising funds from the public by selling company equities. There are views that the laws of Hong Kong may be unable to appropriately cater for the increasingly common activities of crowdfunding. In this connection, will the Government inform this Council: (1) whether it has compared the existing legal framework and supporting policies of Hong Kong on crowdfunding activities with those of other cities (including Shanghai, Beijing, New York, London and Singapore); if it has, of the details; if not, whether it will consider conducting such a comparison; (2) whether it knows the number of crowdfunding projects in Hong Kong and the total amount of funds they raised in each of the past three years; whether the authorities will consider formulating a policy on promoting the development of crowdfunding in Hong Kong; if they will, of the details; if not, the reasons for that; and (3) whether it will consider reviewing the restrictions on crowdfunding activities under the Securities and Futures Ordinance and drawing up a code of practice and guidelines on crowdfunding activities, so as to regulate the sharing of risks and returns by investors; if it will, of the details; if not, the reasons for that? SECRETARY FOR FINANCIAL SERVICES AND THE TREASURY (in Cantonese): President, (1) Crowdfunding activities may come in different forms. The more common forms include equity crowdfunding. At present, parties engaging in equity crowdfunding activities in Hong Kong (for example, where the activity involves an offer to the public to purchase securities, including shares, debentures or interests in collective investment schemes) may be subject to the provisions of the Securities and Futures Ordinance (SFO) and the Companies (Winding Up and Miscellaneous Provisions) Ordinance (C(WUMP)O). Specifically, depending on the specific structure and features of the relevant arrangement, it is an offence for a person to issue any advertisement, invitation or document which contains an invitation to the public to acquire securities, unless the issue has LEGISLATIVE COUNCIL ─ 18 March 2015 7255 been authorized by the Securities and Futures Commission (SFC) under the SFO or an exemption applies. It is also an offence to issue a document offering shares in or debentures of a company to the public which does not comply with the prospectus disclosure or authorization for registration requirements under the C(WUMP)O, unless an exemption applies.
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