72 | Financial and Monetary Affairs
At year-end, there were 13 automated trading services providers, comprising mainly foreign exchanges and regulated entities, authorised by the SFC under section 95 of the Securities and Futures Ordinance (SFO) to provide automated trading services in Hong Kong. Automated trading services are services provided by means of electronic facilities, not being facilities provided by a recognised exchange company or a recognised
a recognised clearing house, to transact or settle transactions in securities or futures contracts.
Securities and Futures Commission
The SFC was established in May 1989 following the enactment of the Securities and Futures Commission Ordinance, which was replaced by the SFO that came into effect on April 1, 2003. The regulatory objectives of the SFC, as set out in the SFO,
are:
• to maintain and promote the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry;
• to
to promote public understanding of the operation and functioning of the securities and futures industry;
• to provide protection for members of the public investing in or holding financial products;
• to minimise crime and misconduct in the securities and futures industry;
to reduce systemic risks in the securities and futures industry; and
• to assist the Financial Secretary in maintaining the financial stability of Hong Kong by taking appropriate steps in relation to the securities and futures. industry.
Established as an autonomous statutory body, the SFC is responsible for regulating the securities and futures markets in Hong Kong. At year-end, the SFC had a governing body of 14 directors (the Chairman, six executive directors and seven non-executive directors) appointed by the Chief Executive. The Government is not involved in the day-to-day regulation of the securities and futures industry.
The SFC is funded by the market. No government funding has been sought since 1993. The 2008-09 operating expenditure (including depreciation) is estimated to be $716.82 million.
The SFC seeks advice on policy matters from its advisory committee, which comprises the Chairman, Chief Executive Officer and 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 broadly-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. Appeals are made to the independent Securities and Futures Appeals Tribunal chaired by a Judge of the Court of First Instance of the High Court. The Process Review Panel for the SFC