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Current shortcomings
3. The Committee identified the following main shortcomings in
the securities industry:
(a)
(b)
(c)
(d)
the Hong Kong Stock Exchange's present management structure was not in the best interests of the generality
of market participants or of the investing public;
the Hong Kong Futures Exchange, the Clearing House, and the Hong Kong Futures Guarantees Corporation, presented a
confusing structure. This was not conducive to a proper
system of risk management and awareness essential to any
futures market;
the Securities Commission and the Commodity Trading
Commission, both originally intended to be high-powered
watchdogs of the local securities industry, were not
equipped to function as proper regulatory bodies;
the Office of the Commissioner for Securities and
Commodities Trading, with its insufficient resources, was
not able to carry out proper surveillance and monitoring
of markets and brokers.
Recommendations
4.
On the basis that Government should encourage self-regulation of
markets, ensure proper safeguards for investors, and preserve
flexibility to cater for rapid developments in the securities
industry, the Securities Review Committee made some 160
recommendations. The major ones are:
(a) a
(b)
fundamental revision of the internal constitution of
the Stock Exchange, in particular its governing Committee, with proper representation for individual and corporate shareholders, coupled with a number of
independent members, to ensure that it is properly
governed
working in the interests of all its members
and users;
a core of professional and independent executives for the two Exchanges on which to build the foundations of the
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