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THE ECONOMY
The Securities Commission is responsible for ensuring compliance with the Securities. Ordinance, the Protection of Investors Ordinance and the Stock Exchanges Unification Ordinance. The Securities Ordinance regulates registration of dealers and investment advisers and trading practices in securities and provides for the establishment of a Stock Exchanges Compensation Fund and the elimination of improper trading practices. At the end of 1984, 3 163 individuals and corporations were registered under the Securities Ordinance. The Protection of Investors Ordinance aims at protecting investors by pro- hibiting the use of fraudulent or reckless means to induce investors to buy or sell securities or to take part in investment arrangements, and regulates the issue of related publications. In March 1984, the Securities Commission, after extensive consultation with the securities industry, recommended to the Financial Secretary the removal of the provisions which at present forbid the new exchange company to admit to membership corporations, directors and employees of banks and deposit-taking companies, and practising solicitors and accountants. The commission also recommended that the formation of partnerships between members and non-members should be permitted. These proposals were approved by the Executive Council in July 1984 and it is expected that the legislation necessary to implement them will be enacted in 1985.
The Chinese Gold and Silver Exchange Society operates a gold bullion market which is among the four largest in the world. Gold traded on the society is of 99 per cent fineness, measured in taels and quoted in Hong Kong dollars. Prices, after allowing for exchange rate fluctuations, parallel those in the other major markets of London, Zurich and New York. Membership of the society remained closed at 192 member firms. There is another gold market operating in Hong Kong, the main participants in which are major international bullion_houses and banks. Trading in this market, which is commonly known as the loco-London market, has been increasing in recent years. Dealings principally take place in US dollars per troy ounce of 99.95 per cent fine gold, with delivery in London.
The Commodities Trading Commission is responsible for ensuring compliance with the Commodities Trading Ordinance, which regulates trading in commodity futures contracts. The Hong Kong Commodity Exchange Limited, established in 1977, has been licensed under this ordinance as the sole company permitted to operate an exchange trading in futures contracts and has received permission to trade four such contracts: cotton, sugar, soyabeans and gold. The Commodity Exchange embarked on an extensive reorganisation during 1984 and the Executive Council recommended the introduction of a small amend- ment Bill, intended to enable the exchange to broaden its membership and to trade financial futures contracts (including futures contracts based on the Hang Seng Index of share prices). A full review of the Commodities Trading Ordinance is underway and it is intended to introduce a major amendment Bill into the Legislative Council during 1985.
Diversification of the Services Sectors
Not only has the financial and business services sector grown in importance, other services sectors such as insurance, transport and tourism have also expanded. Most of the insurance and transport services are related to merchandise trade transactions. Hong Kong ship-owners have long been engaged in operating ships for charter and in providing international liner services. They have been expanding their fleets in the last two decades and ship ownership in terms of tonnage is now second in the world (after Greece).
The steady growth of Hong Kong's external trade has led to the expansion of a number of services related to shipping, notably cargo handling and storage facilities in the container