WINAAK (4)
Securities and Futures Commission
Annex ▸
1.
Following the market crash in October 1987, the Governor
appointed a Securities Review Committee (SRC) to examine the powers,
management and operation of the Stock and Futures Exchanges and of the various regulatory bodies in Hong Kong. The Committee published
its report in June 1988 and the Government announced that it
accepted the general thrust of its recommendations. Since then top
priority has been accorded to the implementation of its major
recommendations. Reform of the Stock Exchange's management
structure and constitution was completed in October, within one year
of the crash. A reconstruction of the futures market, in line with
the SRC recommendations, is well in hand.
2. A third major recommendation of the SRC was for the creation of
a new regulatory authority for the securities and futures
industries.
The new body is called the Securities and Futures
Commission (SFC) and has replaced the existing regulatory bodies
namely the Securities Commission, Commodities Trading Commission and
the Office of the Commissioner for Securities and Commodities
Trading.
3. To expedite establishment of the SFC, the present legislation confines itself to vesting in the SFC the powers, functions and
duties of the existing regulatory bodies and giving the SFC those
additional powers which are considered necessary for it to operate
effectively during the initial stage of its establishment. The
objective has been to strike the right balance between the need for
adequate powers to curb market abuses and the importance of
preserving civil liberties; and between the desire to encourage the
growth of markets and the need to ensure that they do not get our of
control. The ultimate aim is to create an efficient and orderly
market to enhance Hong Kong's status as a pre-eminent capital market
of South East Asia and as an important international financial
centre.
There was extensive consultation with market bodies and other
interested parties and significant modifications were made to
4.