XN000022-1988-07-20 — Page 63

WEDNESDAY, JULY 20, 1988

61

OF

MEANWHILE, BOTH THE STOCK EXCHANGE AND THE FUTURES EXCHANGE HAD ALREADY DONE A GREAT DEAL SINCE LAST OCTOBER TO PUT RIGHT SOME THE OPERATIONAL AND MANAGEMENT PROBLEMS THAT THE CRISIS SHOWED UP.

"A KEY MOVE HAS BEEN THAT THE MANAGEMENT COMMITTEE OF THE STOCK EXCHANGE, WITH THE FULL BACKING OF THE GOVERNMENT, HAD TAKEN THE INITIATIVE TO INTRODUCE A NEW ORGANISATIONAL STRUCTURE," HE SAID.

THE NEW STRUCTURE WOULD INCORPORATE ALL THE KEY ELEMENTS OF THE RECOMMENDATIONS MADE BY THE SECURITIES REVIEW COMMITTEE.

NOTING THAT THE STOCK EXCHANGE HELD AN EXTRAORDINARY GENERAL MEETING EARLIER TODAY TO APPROVE THESE CHANGES, SIR DAVID SAID HE WAS GLAD TO HEAR THAT THE MANAGEMENT COMMITTEE'S PROPOSALS ACCEPTED AND WOULD COME INTO EFFECT BY THE END OF SEPTEMBER.

WERE

BE A

A NEW

THIS MEANT THAT WITHIN 10 WEEKS FROM NOW THERE WOULD COMPLETELY RECONSTITUTED STOCK EXCHANGE, WITH A NEW CHAIRMAN, CHIEF EXECUTIVE AND A COMMITTEE THAT WAS MORE REPRESENTATIVE OF THE MARKET OPERATORS AND ALL THIS WITHOUT HAVING TO GO DOWN THE SLOWER ROAD OF GOVERNMENT INTRODUCED LEGISLATION.

-

HE CONGRATULATED THE HONG KONG STOCK EXCHANGE ON THE ACTION IT HAD TAKEN TO IMPROVE ITS ORGANISATION AND ΤΟ IMPROVE HONG KONG'S POSITION AS AN INTERNATIONAL FINANCIAL AND TRADING CENTRE.

AS TO THE PROBLEMS PRESENTED BY THE FUTURES EXCHANGE, SIR DAVID SAID THE QUESTION WAS WHETHER THE MARKET WANTED A FUTURES EXCHANGE IN HONG KONG. HE SAID HE BELIEVED IT WAS A QUESTION FOR THE MARKET *PO DECIDE AND NOT ONE THAT THE GOVERNMENT SHOULD ATTEMPT TO ANSWER.

HAS AND WITH

"ALREADY THE BOARD OF DIRECTORS OF THE FUTURES EXCHANGE TAKEN A LEAD IN INITIATING DISCUSSIONS WITH ITS OWN MEMBERS THE CLEARING HOUSE AND GUARANTEES CORPORATION," HE NOTED.

"THE GOVERNMENT WILL GIVE THEM ANY ASSISTANCE THEY

FF

NEED, HE

SAID.

SECURITIES

TURNING TO ANOTHER IMPORTANT RECOMMENDATION OF THE REVIEW COMMITTEE OF ESTABLISHING A CENTRAL CLEARING AND SETTLEMENT SYSTEM FOR SECURITIES, SIR DAVID NOTED THIS INVOLVED A COMPLEX SET OF PROPOSALS WHICH WOULD TAKE TIME TO IMPLEMENT.

BUT THE HONG KONG STOCK EXCHANGE AND THE BANKS WERE ALREADY WORKING TOGETHER ON THEM.

IN THE MEANTIME, THE EXCHANGE WAS TAKING THE INITIATIVE IN WORKING OUT PROPOSALS FOR INTERIM IMPROVEMENTS TO THE PRESENT ARRANGEMENTS, HE ADDED.

APART FROM ISSUES RAISED IN THE HAY DAVISON REPORT, SIR DAVID SAID THE GOVERNMENT REALISED THAT HONG KONG NEEDED TO INTRODUCE OTHER REGULATORY REFORMS TO BRING IT INTO LINE WITH INTERNATIONAL STANDARDS.

/HE SAID