FINANCIAL AND MONETARY AFFAIRS
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In addition, the Companies (Amendment) Bill 2002 will make significant changes to the Companies Ordinance. First, it will implement Phase I of the recommendations contained in the SCCLR's Report on the Recommendations of a Consultancy Report of the Review of the Hong Kong Companies Ordinance issued in February 2000. Secondly, it will implement those legislative amendments required in connection with the full computerisation of the Companies Registry. It is anticipated that this bill will be introduced into the Legislative Council in early 2002.
The SCCLR has also assumed responsibility for undertaking the Corporate Governance Review which was announced by the Financial Secretary in his Budget Speech in March 2000. The objectives of the review are to identify and bridge any gaps in the corporate governance regime, making it a benchmark in the region. The SCCLR has set up three subcommittees to examine subjects relating to directors, shareholders and corporate reporting. They have considered a wide variety of subjects and commissioned consultants to undertake research projects regarding several major subjects. The first phase of their proposals is contained in a consultation document which was released in July for public comment. The second phase of the review started in September and is planned to be completed in late 2002.
Enhancement of the Financial Infrastructure
As part of the three-pronged strategy announced in his Budget Speech in March 1999 for reforming the securities and futures markets in Hong Kong, the Financial Secretary appointed a Steering Committee on the Enhancement of the Financial Infrastructure (SCEFI) to study and recommend the necessary improvements to the financial infrastructure in Hong Kong. The objective of the study is to enhance the competitiveness of Hong Kong as an international financial centre in terms of risk mitigation, increased efficiency and cost reduction. The Steering Committee recommended that a single clearing arrangement for securities, stock options, futures and other exchange traded transactions, straight-through processing and a scripless securities market should be developed.
A number of short-term measures have been implemented. The Securities and Derivatives Communication Network (SDNet) that electronically links members of the securities and futures community was launched by the SFC in August 2000. Three applications were launched on the SDNet, including electronic submission. of financial resources rules returns (e-FRRR), electronic IPO services (eIPO) and the electronic transmission of reports from the clearing houses to the SFC. The Steering Committee reconvened in April to discuss the progress of its various working groups tasked with the implementation of the larger financial services network (FinNet), straight-through processing and a scripless market.
As part of the SCEFI initiatives, a working group comprising representatives from the HKMA, SFC, HKEx and Hong Kong Interbank Clearing Limited (HKICL) was set up in March to explore the feasibility of improving the delivery versus payment (DvP) arrangements for settling payments in share transactions under the Central Clearing and Settlement System (CCASS).
Human Resources Development
A robust physical infrastructure cannot function effectively without the input of the right calibre. Human resources have long been an important asset for Hong Kong.