GF 323
CONFIDENTIAL
For decision
on 3 November 1987
機密
ANNEX B
XCC (87) 164 Copy No
MEMORANDUM FOR EXECUTIVE COUNCIL
REVIEW OF THE STOCK AND FUTURES MARKETS
Problem
plunge in
The crisis caused by the massive international stock markets last week has exposed shortcomings in the Hong Kong Stock Exchange and the Hong Kong
the Hong Kong Futures Exchange. As result,
a
there have been calls from various for quarters
an independent inquiry into the workings and structure of the two markets and their supervising bodies in order to identify deficiencies and to recommend remedies.
Recommendation
2
It is recommended that
Committee of Review should be set up to review, with particular reference to the events of the last two weeks, the constitution,
constitution, powers,
powers, management and operation of the Hong Kong Stock Exchange, the Hong Kong Futures Exchange, the Securities Commission, the Commodities Trading Commission and the Office of the Commissioner for Securities and Commodities Trading. The main purpose of the review is to examine critically the relevant structures and systems and to recommend what changes are desirable to ensure the integrity of the markets and to protect investors.
3
Members will be asked to advise whether this recommendation should be approved.
Title and Form
4
of the
be а
non-statutory
The Committee of Review should body appointed by the Governor. It will have no powers to compel the attendance of witnesses ΟΙ the production of documents. It will therefore be necessary to secure the co-operation
two Exchanges and members of the Securities and Commodities Trading Commissions. As far as Government papers are concerned, the Chief Secretary will instruct public officials to give their full co-operation and to produce such files as the Committee may require.
Composition
5
The Committee
should preferably be headed by a high-ranking individual who is experienced in the workings of financial markets and who has no vested interest in the Hong
CONFIDENTIAL
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