XN000022-1977-10-06 — Page 4

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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