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THURSDAY, NOVEMBER 3, 1994
AND SECONDLY
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NOW, YOU MAY NOT HAVE THIS KIND OF EXPERIENCE NOW WHAT DO WE MEAN BY FUTURES? WHAT ARE FUTURES FOR? ARE WE TRYING TO TURN THE SPOT MARKET INTO FUTURES MARKET? ARE WE TRYING TO ALLOW INTERNATIONAL BROKERS TO DO WHAT THEY LIKE IN HONG KONG? I KNOW THAT MANY PEOPLE ARE INTERESTED IN THIS MATTER, SO PLEASE ELABORATE ON THE SUBJECT IN YOUR REPLY.
GOVERNOR:
I WOULD HESITATE TO GIVE A LECTURE ON STOCK MARKET OPERATIONS, ON THE DIFFERENCE BETWEEN STOCK OPTIONS AND FUTURES OR WHATEVER, TO SUCH A GREAT EXPERT IN THESE MATTERS. IT WOULD BE LIKE ME, EVEN THOUGH I CAN ONLY PICK OUT A FEW NOTES ON THE PIANO, GIVING A LECTURE TO PADEREWSKI ON BEETHOVEN, I MEAN I SIMPLY WOULDN'T BE QUALIFIED TO DO IT. BUT I THINK THE HONOURABLE MEMBER KNOWS THE DIFFERENCE BETWEEN A FUTURE AND SOME OF THE STOCKS IN WHICH HE HAS DOUBTLESS IN HIS TIME DEALT WITH CONSIDERABLE SUCCESS FOR HIS CLIENTS.
I THINK WHAT WE ARE TALKING ABOUT IN THIS CASE
IS THE REPUTATION OF HONG KONG AS AN INTERNATIONAL FINANCIAL MARKET AND THE BREADTH AND COMPETITIVENESS OF THAT MARKET. I THINK THAT THE DISCUSSIONS ABOUT FUTURES, ABOUT THE DEVELOPMENT OF DERIVATIVES, ΤΟ WHICH THE HONOURABLE MEMBER REFERS, WERE NECESSARILY TAKING PLACE IN CONFIDENCE BECAUSE THOSE WHO WERE DISCUSSING THOSE QUESTIONS WANT OTHER MARKETS TO KNOW TOO CLEARLY WHAT WAS HAPPENING. THINK THIS
DIDN'T BUT I
THAT THE FURTHER EXTENSION OF INVESTMENT OPPORTUNITIES WHICH DEVELOPMENT REPRESENTS IS WELCOME. IT COMES UNDER, OF COURSE, THE REGULATORY UMBRELLA OF THE VERY WIDELY RESPECTED SFC. AND I HAVE TO TELL THE HONOURABLE MEMBER WHICH I HOPE DOES NOT CONFIRM ALL HIS WORST PREJUDICES ABOUT ME THAT THE DECISION WAS TAKEN WHILE I WAS IN HONG KONG. INDEED, WAS DISCUSSED BY THE EXECUTIVE COUNCIL JUST BEFORE I WENT TO LONDON.
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I HOPE THAT ANY DISAGREEMENT, ANY MIS- UNDERSTANDING BETWEEN THOSE RESPONSIBLE FOR OUR FUTURES MARKET AND THOSE RESPONSIBLE FOR THE STOCK EXCHANGE, CAN BE IRONED OUT AND OVERCOME AND I'M SURE THAT WE ALL WANT TO SEE THE BEST POSSIBLE COMMUNICATION BETWEEN THOSE TWO IMPORTANT CAMPS.
MR CHIM PUI-CHUNG (FOLLOW UP): MR GOVERNOR, YOU KNOW THE INS AND OUTS OF THE MATTER, SO CAN I MAKE A REQUEST HERE? WITH REGARD TO THE EXECUTION TIMETABLE OF STOCK FUTURES, CAN YOU DELAY IT BY A FEW MONTHS SO THAT PARTICIPANTS AND THE PUBLIC WILL KNOW THE INTENTIONS OF THE GOVERNMENT? CAN YOU DELAY THAT FOR A FEW MONTHS?
GOVERNOR:
I THINK THAT IF THAT DECISION WAS TO BE DELAYED FOR A FEW MONTHS WE'D FIND THAT THE BUSINESS HAD GONE ELSEWHERE AND I THINK THAT THE HONOURABLE MEMBER IS PROBABLY A WILY ENOUGH PRACTITIONER IN THESE MATTERS TO RECOGNISE THAT HIMSELF. I THINK THE BUSINESS WOULD PROBABLY GO OFF TO ANOTHER FINANCIAL CENTRE. WHAT IS IMPORTANT IS TO ENSURE THAT ANY TRADING IN OUR FINANCIAL MARKET IS PROPERLY REGULATED, THAT IT TAKES PLACE WITHIN PARAMETERS WHICH ARE REGARDED AS FINANCIALLY PRUDENT BY THE COMMUNITY, AND I CERTAINLY THINK THAT IS TRUE IN THIS CASE. BUT I WON'T GO INTO THE ARCANA OF THE FUTURES MARKET BECAUSE I AM SURE THE HONOURABLE MEMBER KNOWS MUCH MORE ABOUT IT THAN I DO.
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