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Chapter: | 571X
 | Title: | SECURITIES AND FUTURES (DISCLOSURE OF INTERESTS-SECURITIES BORROWING AND LENDING) RULES | Gazette Number: | L.N. 219 of 2002; L.N. 12 of 2003 |
| Section: | 7 | Heading: | Prescribed interests and short positions in shares of a regulated person to be disregarded for the purpose of notification | Version Date: | 01/04/2003 |
(1) Subject to subsections (2), (3) and (4), the following interests or classes of interests, and short positions or classes of short positions, are prescribed for the purposes of section 323 of the Ordinance-
- (a) an interest or short position in the shares of a regulated person where the shares-
- (i) have been borrowed by the regulated person under a relevant agreement; and
(ii) are used, or are intended to be used, by the regulated person or by a related corporation of the regulated person within 5 business days after the date on which the shares were acquired by the regulated person for a prescribed purpose; and
- (i) in the case where shares have been lent by the regulated person under a relevant agreement to a borrower, are returned to the regulated person under the relevant agreement by the borrower; and
(ii) are used, or are intended to be used, by the regulated person or by a related corporation of the regulated person within 5 business days after the date on which the shares were returned to the regulated person for a prescribed purpose.
(3) Where the shares are used for a purpose, other than a prescribed purpose, by the regulated person, or by a related corporation of the regulated person, within the period of 5 business days as specified in subsection (1)(a)(ii) or (b)(ii), the regulated person is taken to have acquired an interest or come to have a short position (as the case may be) in the shares for the purposes of Divisions 2 to 5 of Part XV of the Ordinance on the day that the shares are used for that purpose.
(4) If a regulated person fails to comply with any requirement imposed under section 10, all interests and short positions of the regulated person in shares that are interests and short positions prescribed under subsection (1) shall cease to be such prescribed interests and short positions and the regulated person is taken, for the purposes of Divisions 2 to 5 of Part XV of the Ordinance, to have acquired an interest and come to have a short position in the shares-
- (a) in the case of a failure to comply with section 10(1), on the last day of the period within which the regulated person is required to make the record;
(b) in the case of a failure to comply with section 10(3)(a), on the first day that the regulated person fails to retain the record; or
(c) in the case of a failure to comply with section 10(3)(b), on the last day of the period within which the regulated person is required to provide the record,