XN000022-1988-03-30 — Page 6

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WEDNESDAY, MARCH 30, 1988

THE FIRST WAS TO BUILD UPON THE EXISTING TRIBUNAL SYSTEM AND INTRODUCE MORE POTENT SANCTIONS AND THE SECOND WAS ΤΟ MAKE INSIDER DEALING A CRIMINAL OFFENCE.

MERITS AND DEMERITS AND HE NOTED

BOTH OPTIONS HAD THEIR THAT BOTH THE STANDING COMMITTEE ON COMPANY LAW REFORM AND THE SECURITIES COMMISSION HELD DIVIDED VIEWS ON THEM. THE GOVERNMENT WAS IN THE PROCESS OF FINALISING ITS OWN VIEWS IN ANTICIPATION OF THE SECURITIES REVIEW COMMITTEE FINDINGS.

IT WAS INTENDED THAT A BILL TACKLING THE PROBLEM OF INSIDER DEALING WOULD BE INTRODUCED FOLLOWING THE RELEASE OF THE COMMITTEE'S REPORT, MR JACOBS SAID.

THE FINANCIAL

SECRETARY ADDED THAT A BILL WOULD ALSO BE GAZETTED VERY SHORTLY TO AMEND THE SECURITIES ORDINANCE TO ENABLE THE COMMISSIONER FOR SECURITIES TO PASS ON RELEVANT INFORMATION OBTAINED IN THE COURSE OF HIS DUTIES TO OTHER REGULATORY AUTHORITIES IN HONG KONG AND TO PARALLEL REGULATORY BODIES OVERSEAS.

"THIS WILL ENABLE THE REGULATORY AGENCIES HERE AND OVERSEAS TO CARRY OUT THEIR FUNCTIONS MORE EFFECTIVELY AND THUS PROVIDE BETTER PROTECTION FOR THE INVESTING PUBLIC,"

MR JACOBS ALSO REFERRED TO THE GOVERNMENT'S FREE MARKET PHILOSOPHY, AND SAID THE MAIN PURPOSE OF GOVERNMENT REGULATION WAS TO MAINTAIN THE INTEGRITY OF THE MARKETS AND TO PROTECT THOSE INVESTING IN THEM.

"WE ARE ACUTELY CONSCIOUS OF THE NEED TO AVOID OVER-REGULATION BECAUSE EXCESSIVE INTERFERENCE WILL ONLY STIFLE INNOVATION AND INHIBIT MARKET FORCES, HE SAID.

AND THE

"OUR OBJECTIVE THEREFORE IS ΤΟ STRIKE THE RIGHT BALANCE BETWEEN THE MARKET REQUIREMENT FOR THE MINIMUM OF REGULATION NEED TO PROTECT INVESTORS ADEQUATELY."

FS: POTENT SANCTIONS BEING CONSIDERED

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THE GOVERNMENT IS CONSIDERING INTRODUCING SANCTIONS TO ERADICATE INSIDER DEALING FROM THE MARKET FINANCIAL SECRETARY, MR PIERS JACOBS, SAID THIS (WEDNESDAY)

SUFFICIENT

PLACE, THE AFTERNOON.

SPEAKING TO REPORTERS AFTER ADDRESSING A HONG KONG ASSOCIATION LUNCHEON, MR JACOBS SAID THESE SANCTIONS WOULD AND INCLUDE FINANCIAL PENALTIES AND PENALTIES THAT WOULD BAR FROM HOLDING CERTAIN OFFICES.

MANAGEMENT BE POTENT INSIDERS

"WE ARE