FINANCIAL AND MONETARY AFFAIRS
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corporate activities, supervision of markets including the exchanges and clearing houses, and enforcement of securities laws and rules.
Following the merger and demutualisation of the SEHK, the HKFE and their associated clearing houses and the establishment of the HKEx on March 6, 2000, the SFC has assumed responsibility for front-line supervision of exchange participants and taken over the disciplinary matters involving these intermediaries. A Memorandum of Understanding was signed in February 2001 by the SFC and the HKEx to formalise the SFC's oversight of the HKEx and its subsidiaries, supervision of Exchange Participants and market surveillance.
As at year-end, the SFC had registered 26 925 persons, of whom 639 were corporate securities dealers, 152 were corporate commodities dealers, 681 were corporate investment advisers and eight were securities margin financiers. As regards the regulation of leveraged foreign exchange trading, the SFC had issued 10 foreign exchange trader licences as at year-end.
Over the years, the SFC has developed a framework of securities and futures regulation that is on a par with internationally accepted standards.
The SFC considers investor education the first important step to investor protection. It maintains an Electronic Investor Resources Centre (eIRC), which is a web-based collection of investor education materials and links. It aims to assist investors in making informed investment decisions.
During the year, the SFC broadcast educational video dramas on public transport and partnered with the University of Hong Kong to launch a General Education course on personal financial management for university students. It also worked with Radio Television Hong Kong to produce a popular investor knowledge radio quiz. Investor education leaflets covering subjects like hedge funds and ELI were published. In the meantime, the SFC continued to participate in external relations and international activities, including its work with the International Organisation of Securities Commissions (IOSCO). It hosted the IOSCO Technical Committee meeting and Executive Committee meeting in January and February, respectively and the Asian Roundtable for Internet Project Team in June. On September 30, the SFC participated in the annual Internet Surf Day organised by the Asia-Pacific Regional Committee of IOSCO and identified five websites suspected of offering unregistered dealing or investment services to investors in Hong Kong.
Insider Dealing Tribunal
The Insider Dealing Tribunal is an important feature of the regulatory framework for the securities market in Hong Kong. Established under the Securities (Insider Dealing) Ordinance, the tribunal looks into cases involving suspected insider dealing referred to it by the Financial Secretary. Since the commencement of its operation in 1994, the tribunal has concluded 14 cases.
Upon the commencement of the newly enacted SFO, the Insider Dealing Tribunal will be replaced by a Market Misconduct Tribunal (MMT), which will cover five other types of market misconduct (including false trading, price rigging, disclosure of information about prohibited transactions, disclosure of false or misleading information inducing transactions and stock market manipulation) in addition to insider dealing.