70 | Financial and Monetary Affairs
operation of the banking system, while at the same time providing sufficient flexibility for Als to make commercial decisions.
Hong Kong's framework of banking supervision is in line with the Core Principles for Effective Banking Supervision promulgated by the Basel Committee on Banking Supervision. The HKMA also participates in a number of international and regional initiatives and forums for banking supervisors.
Recent Developments
The HKMA has reinforced its supervisory efforts in monitoring the impact of the global financial turmoil on banks' asset quality, liquidity and profitability, particularly as the crisis intensified following the collapse of Lehman Brothers in mid-September 2008.
The HKMA deployed a significant amount of resources to handle investor complaints arising from the collapse of Lehman Brothers. As at the end of 2008, it had received nearly 20 000 complaints. It had opened investigations in more than 4 500 cases, including the referral of 238 cases to the Securities and Futures Commission (SFC) for the latter to decide whether to take further action.
During the year, the HKMA continued to assist the operations of the Hong Kong Deposit Protection Board, which launched the Deposit Protection Scheme in September 2006.
The Report of the Review of the HKMA's Work on Banking Stability was published by the HKMA on July 17, 2008, following which a three-month public consultation on the report was conducted. Policy response to the recommendations in the report will be published in 2009.
Details of the operation of the Banking Ordinance and the activities of the office of the HKMA during the year can be found in the chapter on Banking Stability in the HKMA's Annual Report.
Securities and Futures Sector
Main Features
The securities market in Hong Kong is operated by the SEHK and futures market, the Hong Kong Futures Exchange Limited (HKFE), both being wholly owned subsidiaries of the Hong Kong Exchanges and Clearing Limited (HKEx). At year-end, there were 449 exchange participants on the SEHK and 148 exchange participants on the HKFE.
By the end of 2008, there were 1 261 companies listed on the Main Board and the Growth Enterprises Market (GEM) of the SEHK with a total market capitalisation of about $10,299 billion, raising an aggregate of $403.7 billion within the year. The total turnover of the securities market amounted to $17,653 billion.
New products continued to be launched during the year. In July 2008, the SFC authorised the first exchange traded fund (ETF) which tracks the price of gold for listing on the SEHK. This new product offers investors a means of participating in