XN000022-1989-01-18 — Page 2

WEDNESDAY, JANUARY 18, 1989

BILL PROPOSES HK SOLUTION FOR INVESTOR PROTECTION

IN SEEKING ΤΟ ESTABLISH A DURABLE REGULATORY FRAMEWORK CONDUCIVE TO THE FURTHER DEVELOPMENT OF STABLE, FAIR AND ORDERLY FINANCIAL MARKETS, THE GOVERNMENT'S AIM HAS BEEN ΤΟ PUT FORWARD A SOLUTION WHICH IS RIGHT FOR HONG KONG.

THE FINANCIAL SECRETARY, THE HON PIERS JACOBS, SAID THIS IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) IN MOVING THE SECOND READING OF THE SECURITIES AND FUTURES COMMISSION BILL 1989.

"IN PUTTING TOGETHER THIS BILL, WE HAVE BEEN ACUTELY CONSCIOUS OF THE NEED TO AVOID OVER-REGULATION, WHICH WOULD STIFLE THE VIGOUR AND INNOVATION OF OUR MARKETS.

"AT THE SAME TIME, WE MUST ESTABLISH A REGULATORY BODY WITH SUFFICIENT AUTHORITY AND RESOURCES TO MAINTAIN A LEVEL OF INVESTOR PROTECTION WHICH IS BROADLY COMPARABLE TO THAT IN OTHER INTERNATIONAL FINANCIAL CentreS.

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'WHILE LOOKING OVERSEAS FOR USEFUL REFERENCES, AND INDEED FOR INTERNATIONALLY ACCEPTED REGULATORY STANDARDS, WE MUST NOT OVERLOOK LOCAL CIRCUMSTANCES," MR JACOBS EMPHASISED.

HE POINTED OUT THAT THE BILL DID NOT SEEK TO LAY DOWN ALL THE REGULATIONS AND RULES.

"THESE WILL HAVE TO BE WORKED OUT BY THE COMMISSION, AFTER IT HAS BEEN ESTABLISHED, IN CONSULTATION WITH THOSE IN THE MARKET PLACE.

"IT DOES, HOWEVER, SET OUT THE PARAMETERS WITHIN WHICH SUCH RULES AND REGULATIONS SHOULD BE FORMULATED, HE ADDED.

MR JACOBS SAID THAT IN PUTTING TOGETHER THE LEGISLATIVE PROPOSALS, THE GOVERNMENT HAD CONSULTED THOROUGHLY MARKET ORGANISATIONS, PROFESSIONAL BODIES AND ADVISORY COMMITTEES.

"AS A RESULT, WE HAVE INTRODUCED SIGNIFICANT MODIFICATIONS INTO THE BILL.

"I BELIEVE THAT THE BILL IN ITS PRESENT FORM STRIKĖS THE RIGHT BALANCE BETWEEN GIVING THE NEW COMMISSION ADEQUATE POWERS TO CARRY OUT ITS TASKS AND PROVIDING THE MARKETS WITH THE FREEDOM THEY NEED ΤΟ THRIVE AND ADAPT TO CHANGING CIRCUMSTANCES, HE SAID.

MR JACOBS THEN TURNED TO SEVERAL ARBAS WHICH ATTRACTED PARTICULAR ATTENTION DURING THE CONSULTATION PROCESS.

/REGARDING THE