XN000022-1987-03-19 — Page 21

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THURSDAY, MARCH 19, 1987

+ IT IS EXPENSIVE BUT IT WILL RESULT IN A GREAT MANY INVISIBLE BENEFITS IN OUR FUTURE,+ HE SAID.

LASTLY,

MR LEE REFERRED TO THE SUBJECT OF INSIDER DEALING IN HONG KONG.

CONCEDING THAT A LOT OF DIFFICULTIES AND SENSITIVITIES WERE INVOLVED, HE SAID THE GOVERNMENT HAD THE RESPONSIBILTY TO PROTECT INVESTORS FROM UNETHICAL PRACTICES.

+1 RECOGNISE THAT INSIDER DEALING IS ONLY ONE OF THE INTRICACIES OF BEING A FINANCIAL CENTRE BUT I FEEL OUR PHILOSOPHY SHOULD BE ONE WHEREBY WE STAND TALL ON OUR OWN MERITS AS OUR CREDITABILITY AND REPUTATION ARE ON THE LINE, ESPECIALLY AS WE HAVE ENTERED INTO THE WORLD ARENA,+HE SAID.

NEED TO IMPROVE SECURITIES MARKET MECHANISM

****

TO FOSTER HONG KONG'S CONTINUED DEVELOPMENT AS ONE OF THE LEADING INTERNATIONAL FINANCIAL CENTRES, AN IMPROVEMENT OF THE MARKET MECHANISM AVAILABLE TO SUPPORT THE SECURITISATION PROCESɔ

IS NECESSARY.

THE CALL WAS MADE BY THE HON KIM CHAM DURING THE RESUMED DEBATE ON THE APPROPRIATION BILL 1987 IN THE LEGISLATIVE COUNCIL TODAY (THURSDAY),

ANY DELAY IN IMPROVEMENTS WOULD BE DETRIMENTAL, HE WARNED, AS OTHER CENTRES GEARED UP TO CHALLENGE HONG KONG'S ́ POSITION AS × MAJOR FINANCIAL CENTRE.

HE SAID THE SECURITISATION OF DEBTS INTRODUCED NEW DIMENSIONS OF RISKS IN THESE NEW FINANCIAL INSTRUMENTS.

+PART OF THE SOLUTION LIES IN IMPROVING THE REGULATORY FRAMEWORK AND SUITABLE PROVISIONS AS COVER FOR THESE RISKS. PART OF THE SOLUTION APPEARS TO CALL FOR AN IMPROVEMENT OF THE MARKET MECHANISM, HE SAID.

HE NOTED THAT WITH UNCERTAINTIES IN A DEALERS' MARKET IN WHICH SECURITIES OR PAPER ASSETS WERE TRADED, LIQUIDITY COULD DRY UP AND BRISK TRADING MIGHT STOP SUDDENLY.

+HOWEVER, IF THESE INSTRUMENTS WERE TRADED WITH A LARGE NUMBER OF PARTICIPANTS IN AN OPEN MARKET. THE DEPTH AND LIQUIDITY OF THE MARKET COULD BE ENHANCED, HE SAID.

/TURNING TO

T