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Thursday, October 6, 1977
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INSIDER DEALING TRIBUNAL TO BE SET UP
A new committee is to be established to investigate and report
on suspected cases of "insider" dealing in stocks and shares.
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To be called the "Insider Dealing Tribunal", the new body will
be headed by a Supreme Court judge who will be assisted by two other members
with broad financial and commercial experience.
Details of the tribunal will be contained in the Securities
(Amendment) Bill published tomorrow (Friday) and referred to by the
Governor in his address to the Legislative Council yesterday (Wednesday).
A spokesman for the Office of the Commissioner for Securities
said the establishment of a tribunal was a unique way of attempting to
solve a problem which exists in all securities markets. By contrast,
other countries, including the United States, Canada, Australia and
Singapore, had made insider dealing a criminal offence.
"One of the difficulties in coping with insider dealing is
defining precisely who is an insider. As a member of the Securities and
Exchange Commission in the United States once remarked: 'We don't know
how to define an insider, but we sure know one when we see him, | "the
spokesman explained.
"In Hong Kong the situation is made even more complex because
many directors of leading companies sit on one another's boards, and
because of the large number of family-controlled companies, many of which
obtained stock market quotations during the 1972-73 boom period," he added.
The spokesman stressed that: "The Government is not convinced
that the imposition of criminal sanctions is the best way to solve the
problem of insider dealing in Hong Kong.
/"At the same