9 July 1999

Chief Executives
of all locally incorporated institutions

Dear Sir/Madam,

The Hong Kong Society of Accountants has issued SSAP 24 on "Accounting for investment in securities". This SSAP is effective for periods beginning on or after 1 January 1999. It therefore needs to be considered for interim reports of institutions ending on or after 30 June 1999.

For this reason, institutions with significant investment in securities are advised to consider urgently in consultation with their external auditors the proper treatment of such securities in their accounts and ascertain the impact, if any, on their profit and loss account for the interim period to 30 June 1999. Our staff will be in touch with yours in the next couple of weeks to find out the impact on the profitability of your institution's interim results.

Yours faithfully,

Y.K. Choi
Executive Director
(Banking Supervision)