THURSDAY, JUNE 2, 1988
2
SECURITIES REVIEW COMMITTEE SETS OBJECTIVE FOR HK
OF
HONG KONG SHOULD AIM TO BECOME THE PRE-EMINENT SOUTHEAST ASIA AND SHOULD WORK TOWARDS INTERNATIONALISATION OF ITS SECURITIES MARKETS SYSTEMS AND REGULATORY ARRANGEMENTS.
BY
CAPITAL MARKET THE PROGRESSIVE
STRENGTHENING ITS
THIS WAS THE MAIN OBJECTIVE SET FOR HONG KONG'S SECURITIES INDUSTRY BY THE SECURITIES REVIEW COMMITTEE IN ITS REPORT ON "THE OPERATION AND REGULATION OF THE HONG KONG SECURITIES INDUSTRY" PUBLISHED TODAY (THURSDAY).
MR
THE COMMITTEE, CHAIRED BY MR IAN HAY DAVISON AND COMPRISING S.L. CHEN, MR LAU WAH-SUM, MR PETER POON, MR CHARLES 900 AND MR PHILIP TOSE, WAS APPOINTED ON NOVEMBER 16 LAST YEAR TO REVIEW THE CONSTITUTION, POWERS, MANAGEMENT AND OPERATION OF THE HONG KONG STOCK AND FUTURES EXCHANGES AND THEIR REGULATORY BODIES.
ITS
IN ITS REPORT, THE COMMITTEE URGED HONG KONG TO CAPITALISE ON THE INTERNATIONAL INTEREST IN ITS MARKETS AND TO STRENGTHEN SYSTEMS AND CONTROLS TO MINIMISE THE RISKS INVOLVED.
HONG KONG HAS EXCELLENT ECONOMIC FUNDAMENTALS AND SHOULD BUILD ON THESE IN DEVELOPING ITS SECURITIES MARKETS, THE COMMITTEE SAID.
THE COMMITTEE FELT THAT REFORMS WERE ESSENTIAL TO ACHIEVE THIS, AND RECOMMENDED THAT HONG KONG SHOULD AIM FOR FOUR THINGS:
SYSTEMIC STABILITY SO THAT RISKS ARE MANAGED WELL;
ORDERLY AND SMOOTH FUNCTIONING MARKETS 90 THAT ALL THE SYSTEMS OPERATE PROPERLY;
FAIR MARKETS SO THAT THERE IS ADEQUATE DISCLOSURE TO ENABLE ALL PARTIES TO DEAL ON AN EQUAL FOOTING; AND WITH ALL THESE
ADEQUATE PROTECTION FOR INVESTORS.
THE COMMITTEE STRESSED THAT THE CONCEPT OF EFFECTIVE RISK MANAGEMENT WAS ABSOLUTELY FUNDAMENTAL IN MEETING THESE OBJECTIVES. ALTHOUGH REFORM PROPOSALS WERE BASED ON SELF-REGULATION, THE COMMITTEE FELT THAT THERE MUST BE EFFECTIVE СНЕСКУ AND BALANCES AT EVERY LEVEL OF THE SYSTEM. FOUR BASIC REQUIREMENTS WERE LAID DOWN IN THE REPORT:
A TWO-TIER SUPERVISION SYSTEM WITH THE EXCHANGES REGULATING THEIR OWN AFFAIRS UNDER THE WATCHFUL EYE OF A SINGLE STATUTORY BODY;
THE STATUTORY SUPERVISOR SHOULD BE DETACHED FROM THE GOVERNMENT SO THAT IF THE SUPERVISOR FAILS, THEN AND ONLY THEN, SHOULD THE GOVERNMENT STEP IN;
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