WEDNESDAY, NOVEMBER 2, 1988
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"THE HONG KONG DOLLAR WILL CONTINUE TO BE A FREELY CONVERTIBLE CURRENCY AND THE SAR GOVERNMENT WILL ON ITS OWN DETERMINE ITS MONETARY AND FINANCIAL POLICIES, MR NENDICK ASSURED HIS AUDIENCE.
LOOKING BACK AT THE WORLDWIDE STOCK MARKET EVENTS IN OCTOBER LAST YEAR, MR NENDICK SAID THE CRASH IN HONG KONG'S STOCK MARKET AND FUTURES MARKET WAS IN FACT A GREAT CATALYST FOR CHANGE.
IT ALSO EXPOSED THE WEAKNESSES IN THE SYSTEM; THE INADEQUATE SUPERVISORY PRESENCE; UNREPRESENTATIVE MARKET STRUCTURES; AND LACK OF STRONG, INDEPENDENT PROFESSIONAL ADMINISTRATION OF THE EXCHANGES.
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**WE HAVE BEEN GIVEN A VALUABLE OPPORTUNITY TO BRING THE MARKETS FULLY UP TO INTERNATIONAL STANDARDS SINCE THE EVENTS OCTOBER 1987 AND WE BELIEVE IT IS IN THE INTERESTS OF HONG KONG AS INTERNATIONAL FINANCIAL CENTRE TO REACT PROMPTLY," HE SAID.
GOVERNMENT-APPOINTED
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MR NENDICK EXPLAINED THAT THE
SECURITIES REVIEW COMMITTEE REPORTED WITHIN SIX MONTHS AND THE GOVERNMENT PROMPTLY ACCEPTED THE GENERAL THRUST OF ITS RECOMMENDATIONS.
"IN PARTICULAR, THE GOVERNMENT AGREED TO THE SETTING UP OF THE SECURITIES AND FUTURES COMMISSION, A NEW REGULATORY AUTHORITY OUTSIDE THE CIVIL SERVICE. GOOD PROGRESS HAS BEEN MADE AND THE COMMISSION IS EXPECTED TO BE FULLY OPERATIONAL EARLY NEXT YEAR, HE SAID.
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"THE SECURITIES REVIEW COMMITTEE ALSO RECOMMENDED FUNDAMENTAL REVISIONS TO THE CONSTITUTION AND INTERNAL MANAGEMENT OF BOTH THE STOCK AND FUTURES EXCHANGES, MR NENDICK SAID, NOTING THAT A NEW STRUCTURE FOR THE STOCK EXCHANGE WAS PUT IN PLACE LAST MONTH, WITHIN A YEAR OF THE CRASH.
"THE FUTURE EXCHANGE IS ALSO AT AN ADVANCED STAGE OF IMPLEMENTING A NEW CLEARING AND RISK MANAGEMENT SYSTEM WHICH MEMBERS WILL VOTE ON AT THE END OF NOVEMBER OR IN DECEMBER, HE SAID.
MR NENDICK SAID THAT OTHER LEGISLATION WAS ALSO IN TRAIN INCLUDING SUBSTANTIALLY ENHANCED PENALTIES AGAINST INSIDER DEALING AND DISCLOSURE OF BENEFICIAL OWNERSHIP OF STOCKS AND SHARES WITH SANCTIONS AGAINST NON-ADHERENCE.
IN ADDITION, WHILST A NUMBER OF RECOMMENDATIONS FOR THE SECURITIES MARKETS MADE IN THE HAY DAVISON REPORT HAD ALREADY BEEN IMPLEMENTED, A ROLLING PROGRAMME WAS EXPECTED TO IMPLEMENT THE OTHER RECOMMENDATIONS TOTALLING WELL OVER 100 WITHIN TWO YEARS.
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