• Tue
  • Jul 22, 2014
  • Updated: 9:01pm

CCASS increases insurance cover

PUBLISHED : Tuesday, 07 January, 1997, 12:00am
UPDATED : Tuesday, 07 January, 1997, 12:00am

The Central Clearing and Settlement System (CCASS) is to expand its insurance by a further $100 million, boosting the clearing system's guarantee fund to $350 million, according to Hongkong Clearing chief executive Stewart Shing.


Mr Shing said yesterday the guarantee fund, which protects CCASS from market risks, stood at $250 million, including $100 million of broker's contributions, $100 million in insurance and an accumulated profit of $50 million earned by the CCASS.


He said the insurance level was being increased because of a discount offered by the insurance provider.


'The CCASS has not claimed on insurance in the past four years so the insurance company have given a 33 per cent discount on the insurance premium the CCASS needs to pay, which is just the same as adding up $100 million of insurance,' he said.


Yesterday Hongkong Clearing presented to the Legislative Council's financial services panel its consultation paper proposing direct participation by investors in the clearing system.


Securities and Futures Commission chairman Anthony Neoh said the new proposal would offer more protection to investors and would pose no risk to the clearing system. He indicated the securities watchdog supported the proposal.


In response to concern expressed by some Legco members about the potential cost to investors, Hongkong Clearing chairman John Chan said the CCASS was a non-profit company and the new service would charge only for operation costs.


During the panel session, legislator Chim Pui-chung accused two big banks which are shareholders in CCASS of delaying the system's projects for their own benefit and asked if their stakes should be reduced.


Another legislator and the deputy chairman and chief executive of the Bank of East Asia, David Li Kwok-po, confirmed there had been conflicts among the CCASS shareholders when he was previously on the board.


CCASS is 50 per cent owned by the stock exchange and the territory's five largest banks - Hongkong Bank, Hang Seng Bank, Standard Chartered Bank, Bank of East Asia and the Bank of China - which each own 10 per cent.


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