Source of Money of the Fund

The source of money comes mainly from the Investor Compensation Levy ("Levy") on exchange-traded product transactions. The current Levy on securities transactions is 0.002% payable by buyers and sellers. For futures contracts, it is HK$0.5 per side of a contract or HK$0.1 per side of a mini contract or stock futures contract. In other words, for every HK$50,000 securities trading, the buyer and seller need to pay Levy of HK$1 each.

Other sources of the Fund are from investment income such as bank deposit interest and transfer from the Unified Exchange Compensation Fund and Commodity Exchange Compensation Fund.

In October 2005 a levy suspension and re-instatement mechanism was established whereby the Levy can be suspended when the net asset value of the Fund exceeds HK$1.4 billion, and subsequently reinstated when the net asset value of the Fund falls below HK$1 billion.

Effective December 2005, the Levy has been suspended.