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system.
4.
We are also trying to resist suggestions within the OECD that
there should be some form of collective dialogue with the "four dragons". We point not only to the disparate nature of the group but also to the impossibility (for Hong Kong as well as ourselves)
of government contacts with the Taiwanese.
(c) HONG KONG STOCK EXCHANGE
5.
After the October crash the Hong Kong Stock and Futures
Exchanges closed for four days and a support package totalling $4 billion for the Futures Exchange had to be put into place. In January Mr Ronald Li, former Chairman of the Stock Exchange, and
some other members of the Stock Exchange Committee, were arrested by the Independent Commission Against Corruption (ICAC) on corruption charges. Further changes may be brought against other former
members of the Committee in due course. Despite these shocks share
prices in Hong Kong have recovered, in line with prevailing
international trends.
6.
Following the stock exchange collapse the Hong Kong Government acted quickly to appoint a Securities Review Committee to
undertake a thorough review of the Stock and Futures Exchanges and
the government's regulatory position. The Committee's report was published in Hong Kong on 2 June. The Securities Review Committee
had identified the following main shortcomings in the securities
industry:
(a) the Hong Kong Stock Exchange's present manangement structure is not in the best interests of the generality of market
participants or of the investing public.
(b) the Hong Kong Futures Exchange, the Clearing House, and
the Hong Kong Futures Guarantee Corporation, present a confusing structure. This is not conductive to a proper system of risk management and awareness essential to any futures market.
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