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WEDNESDAY, NOVEMBER 27, 1985
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+FURTHERMORE, PHYSICAL DEALERS HAVE PROVIDED CREDIT LIBERALLY, PERMITTED DEFERRED DELIVERIES, THUS OFFERING FEATURES SIMILAR TO FUTURES TRADING, HE SAID.
+ NITHOUT A PROPER MARKET STRUCTURE, THERE ARE NO REQUIREMENTS FOR THE SEGREGATION OF CLIENTS' FUNDS, NO SUPERVISION AND ABOVE ALL, NO DISCIPLINE FOR MALPRACTICES.
+THUS, FOR WANT OF CONTROL DEFAULTS ARE NOT INFREQUENT,+ HE ADDED.
DR CHAM ALSO NOTED THAT ALTHOUGH THE MARKET STARTED ONLY AMONG DEALERS, THE GRADUAL BROADENING OF ITS CLIENTELE HAD LED TO SUBSTANTIAL CLAIMS UPON DEALER DEFAULTS.
+GOVERNMENT MUST CONSIDER APPROPRIATE REGULATION OVER THIS OFF-BEAT MARKET. OTHERWISE SPURTS IN GOLD PRICES WILL GENERATE 'ORE CASES OF DEFAULT AND BY IMPLICATION, DAMAGES TO THE PUBLIC,+ HE WARNED.
AS TO HAT MEASURES OF REGULATION SHOULD BE DEEMED DESIRABLE, HE SAID THAT OVER-REGULATION WAS OFTEN ABHORRED FOR SUGGESTING STRANGULATION.
HE SAID HE BELIEVED THE SHEER OUTCRY FOR INVESTOR PROTECTION WAS NOT EFFICACIOUS AND IT WAS THE PULSE OF THE MARKET AND THE FEELING OF IT THAT UNDERLINED BETTER REGULATION AND PROTECTION.
DR CHAM SAID IT WAS THE CONSIDERED VIEW OF SIR KENNETH BERRILL, CHAIRMAN OF THE BRITISH SECURITIES AND INVESTMENT BOARD (SIE) THAT REGULATION OF MARKETS WOULD BE MOST EFFECTIVELY EXECUTED BY MEMBERS OF THE BOARD WHO WERE PRACTITIONERS DRAWN FROM THE MARKETS WHICH THEY HAD THE JOB OF REGULATING.
HE SAID HE AGREED WITH SIR KENNETH ENTIRELY THAT A FULL UNDERSTANDING OF THE MARKETS WAS ESSENTIAL IF THEY WERE TO BE REGULATED EFFECTIVELY.
HE POINTED OUT THAT BY +UNDERSTANDING+, SIR KENNETH MEANT MORE THAN A KNOWLEDGE OF TECHNICALITIES BUT RATHER THE IDEA OF FEING CLOSELY ATTUNED TO THE NEEDS OF PARTICULAR MARKETS.
DR CHAM SAID SURELY THIS WAS FOOD FOR THOUGHT AS WE CONSIDERED OUR REGULATORY FRAMEWORK TO MEET OUR FUTURE NEEDS.
TURNING TO HONG KONG'S TRADING OUTLOOK HE SAID IT WOULD REMAIN CLOUDED BY UNCERTAINTIES LOOMING OVER THE PROLONGED CYCLE OF DEMANDS, POLITICAL BARGAIN AND COMPROMISES OVER THE ISSUE OF TRADE RESTRICTION.
HE SAID HE BELIEVED WE HAD TO ADDRESS URGENTLY THE PRESSURE OF GROWING COMPETITION IN OUR TRADITIONAL MARKETS POSED BY OTHER NEW INDUSTRIAL ECONOMIES.
/+INDEED, A