Financial and Monetary Affairs 75
The SFC seeks advice on policy matters from its advisory committee, which comprises the chairman and the chief executive officer of the SFC, two executive directors of the SFC and 12 independent members. The independent members are appointed by the Financial Secretary under the authority delegated by the Chief Executive and are broad-based and representative of market users.
The exercise of powers by the SFC is subject to a range of checks and balances. For instance, a wide range of SFC decisions are subject to appeal, and appeals are made to the independent Securities and Futures Appeals Tribunal chaired by a High Court judge. In November 2000, the Process Review Panel for the SFC (PRP) was established by the Chief Executive to review and advise the SFC on the adequacy of the internal procedures and operational guidelines governing the actions and operational decisions it takes in the performance of its regulatory functions. Members of the PRP are appointed by the Chief Executive. In September 2007, the Government published the PRP's sixth annual report, which concluded that the SFC had generally followed its internal procedures in handling cases under review.
Broadly speaking, the SFC's work involves licensing, supervision and monitoring of intermediaries; regulation of the public marketing of unit trusts, mutual funds and other collective investment products; regulation of takeovers, mergers and other corporate activities; listing regulation under the dual filing system for IPO applicants and issuers; supervision of markets including the exchanges and clearing houses; enforcement of securities laws and rules; and investor education.
As at year-end, there were 33 175 licensed persons, including securities brokerage firms, futures dealers and securities margin financiers, as well as their representatives, and 99 registered institutions, such as banks, engaging in regulated activities like dealing and advising on securities and futures.
Investor education continues to be a priority of the SFC's work. The SFC's investor education theme in 2007 was 'Know Your Risk', which aimed at encouraging investors to understand different aspects of 'risk' in their investments, including market volatility, increasing complexity of products, scams and malpractices.
The SFC launched a five-episode TV drama series, Wising up with Experience, which for the first time was adapted from real-life investment stories. To highlight its investor education theme, the SFC also ran the first full-length 30-minute radio programme, Investing 101, on Commercial Radio to raise the public awareness of risk relating to various investments.
Also for the first time, the SFC launched a cross-media financial knowledge quiz, Investment Triathlon, through three separate media channels, namely the Hong Kong Economic Times, Radio Television Hong Kong and Cable TV, to help investors understand financial investments and their risks.
During the year, the SFC published a new series of six investor education leaflets on wide-ranging topics, namely 'Know Your Broker', 'IPO Investing', 'Fund Investing', 'Hedge Funds', 'Index Tracking Exchange Traded Funds', and 'How to Make a Complaint'.