SecProbe.io

CORRESP
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filename1.htm

November
22, 2024

    Via
    Edgar Transmission

    Ms.
    Jennifer O’Brien

    Securities
    and Exchange Commission

    Division
    of Corporation Finance

    Office
    of Energy & Transportation

    Washington,
    D.C. 20549

·

    Re:
    Magic
    Empire Global Limited (the “Company”)

    Form
    20-F for Fiscal Year Ended December 31, 2023

    Response
    dated October 31, 2024

    File
    No. 001-41467

Dear
Ms. O’Brien:

As
counsel for the Company and on its behalf, this letter is being submitted in response to the letter dated November 8, 2024 from the Securities
and Exchange Commission (the “Commission”) in which the staff of the Commission (the “Staff”) commented
on the above-referenced Form 20-F for Fiscal Year Ended December 31, 2023 (the “Form 20-F”).

For
the Staff’s convenience, the Staff’s comment has been stated below in its entirety, with the Company’s response set
out immediately underneath such comment.

Form
20-F for the Fiscal Year Ended December 31, 2023

General

    1.
    Regarding
    the Company’s response to staff’s previous comment 1, we have the following comments:

    ●
    Please provide a detailed legal analysis of whether the receivable relating to Company A should be treated as an investment security
    for purposes of Section 3(a) of the Investment Company Act of 1940. In doing so, please specifically address whether the receivable
    would be treated as a note or investment contract and please also ensure that your response addresses whether and how such receivable
    is documented and the specific financial terms of such arrangement.

    ●
    We note from your response that the Company believes that time deposits placed with banks with original maturities of less than three
    months are cash items in the context of the analysis under Section 3(a)(1)(A) of the 1940 Act.

    ●
Please update your legal analysis that such time deposits should be treated as cash items for purposes of Section 3(a)(1)(C) in light
of (i) the 1982 amendments to the definition of “security” ( see, e.g., Public Law 97-303, 96 Stat. 1409 (October 13, 1982)
and associated Senate report) and (ii) Revisions to Rules Regulating Money Market Funds, SEC Release Nos. 33-6882 and IC-18005 (February
20, 1991) ( see, e.g., section II.B.1.c and fn. 28).

    ●
    Please explain in detail whether, and to what extent, the Company and its subsidiaries have or had any investment intent with respect
    to the time deposits (addressing, in appropriate detail, the factors referenced in fn. 4 and 29 of Certain Prima Facie Investment
    Companies, SEC Release No. IC10937 (Nov. 13, 1979) (“3a-1 Release”)). In this regard, we note that the Rule 3a-1 Release
    states that “[c]ertificates of deposits and time deposits typically would not be considered cash items absent convincing evidence
    of no investment intent.” In your response, please address the Company’s basis for investing in time deposits given the
    “insignificant bank charges” associated with termination of such investments as compared to other cash management alternatives
    that are not subject to such charges.

    ●
Your response failed to recalculate all calculations under “Nature of Present Assets” and “Sources of Income”
and under Section 3(a)(1)(C) in response to our prior comment under the assumption that time deposits are not cash items. Accordingly,
we reissue that portion of our comment in its entirety.

    Response:

    As
    previously submitted, the other receivable of HK$14,500,000 as of September 30, 2024 under GIL, at unconsolidated basis and at Group’s
    consolidated basis (being the same other receivable) represented the payment obligation arising from the redemption of investment
    in Company A. The Company divested its long-term investment to ease the Staff’s concern and requested for redemption of the
    investment in Company A. The other receivable represented the sum to be received by the Company arising from the redemption and it
    represented the payment obligation to be received by the Company and bear no interest and was due for payment by December 31, 2025.
    It is recorded as “other receivable” and is not a note nor investment contract. However, to further ease the Staff’s
    concern, the other receivable will be settled in full by end of December 2024.

    As
previously submitted, the Company believes that short-term time deposit with maturity of not more than 3 months have a high degree of
liquidity and should be accounted for cash and cash equivalents pursuant to ASC 305, “Cash and Cash Equivalents” and the
general definition of cash and cash equivalents adopted by the SEC. The Company also has no investment intent for placing short-term
time deposit:

    (i)
    the
    Company has been a financial services provider in Hong Kong principally engages in the provision of corporate finance services. The
    Company is not and does not intend to hold itself out as being engaged primarily, or proposes to engage primarily, in the business
    of investing, reinvesting, or trading in securities. The Company considers cash and short-term time deposits as cash items and the
    Company is not engaging in the business of investing cash into time deposit for revenue. As shown in the revenue breakdown of the
    Company above, the Company’s revenue was from the provision of corporate finance services and the Company accounts for bank
    interest income as other income;

    (ii)
    the
    Company has not represented that it is involved in any business other than the provision of corporate finance services. The Company
    does not represent that it is in the business of investing cash into short-term time deposit for an investment income; and

    (iii)
    the
    activities of the officers and directors align with the Company’s representation that it is not involved in any business other
    than the provision of corporate finance services in Hong Kong. The officers and directors spend a trivial and negligible time in
    renewing the short-term time deposits. They utilize substantially all of the time in the provision of corporate finance services
    in Hong Kong.

However,
to further ease the Staff’s concern, the Company will not renew the existing time deposits with maturity of not more than three
months and will keep the cash at demand deposits/saving accounts and will only place time deposits with maturity of not more than
seven days, as the case may be, as generally approved by the SEC in note 18 of the SEC Release No. IC-10937 (Nov. 13, 1979), which “this
requirement in section 22(e) also has served as the basis for the Commission’s standard for determining liquidity. See, e.g., Investment
Company Institute (pub. avail. May 26, 1995). The Commission considers a security to be illiquid if it cannot be disposed of within seven
days in the ordinary course ofbusiness at approximately the price at which the fund has valued it. Id (citing Release 14983)”.
The Company expects all existing time deposits mature before February 2025.

Accordingly,
after the maturity of the existing short-term time deposits with maturity of not more than 3 months and the receipt of the other receivable,
the Company will have no investment securities assumed by the Staff as defined under 3(a) of the Investment Company Act of 1940. Based on the above,
the Company believes that the recalculation of all calculations under “Nature of Present Assets” and “Sources of Income”
and under Section 3(a)(1)(C) in response to Staff’s prior comment under the assumption that time deposits are not cash items is
no longer applicable.

The
Company believes that it is not an “investment
company” under Section 3(a)(1) of the Act because:

(1)
it is not and does not intend to hold itself out as being engaged primarily, or proposes to engage primarily, in the business of investing,
reinvesting, or trading in securities;

(2)
it does not and does not intend to engage or proposes to engage in the business of issuing face-amount certificates of the installment
type, or has been engaged in such business and has any such certificate outstanding; and

(3)
it does not and does not engage or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities,
and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of its total assets (exclusive
of Government securities and cash items) on an unconsolidated basis.

*
* *

Please
contact the undersigned at (852) 3923-1188 if you have any questions with respect to the responses contained in this letter.

    Sincerely,

    /s/
    Lawrence S. Venick

    Lawrence
    S. Venick

    Direct
    Dial: +852.3923.1188

    Email:
    lvenick@loeb.com