XN000022-1989-03-30 — Page 5

THURSDAY, MARCH 30, 1989

MR NENDICK SAID THAT NATURALLY PERHAPS, THERE WERE THOSE WHO EXPRESSED THE VIEW THAT, AS HONG KONG MANAGED VERY WELL IN THE PAST WITHOUT ANY MARKET DISCIPLINE OR SIGNIFICANT PROTECTION TO INVESTORS, IT COULD CONTINUE TO DO SO IN THE FUTURE.

AND

"FURTHERMORE, THEY GO ON TO SAY, IF STRICTER RULES AND REGULATIONS ARE INTRODUCED

ENFORCED, MARKET ACTIVITY WILL BR SERIOUSLY AFFECTED, TO THE DETRIMENT OF THE ORDINARY INVESTOR,' HE SAID.

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"BUT SUCH VIEWS IGNORE REALITY HE SAID. "WHETHER WE LIKE IT

ONE OR NOT, WE ARE NOW A PART OF

INTER-DEPENDENT WORLD MARKET FOR SECURITIES AND A PART IN WHICH INTERNATIONAL INVESTORS ARE PLAYING INCREASINGLY IMPORTANT ROLE.

AN

HE SAID SUCH INVESTORS REQUIRED PROPER STANDARDS OF BEHAVIOUR AND ACCOUNTABILITY AND SO DID OUR INCREASINGLY SOPHISTICATED AND AFFLUENT LOCAL COMMUNITY.

'WITH AVERAGE LIVING STANDARDS ON A PAR WITH THOSE OF A NUMBER OF DEVELOPED COUNTRIES, OUR INVESTORS NOW EXPECT THAT THEIR HARD EARNED SAVINGS ARE SUBJECT TO PROPER SAFEGUARDS AND THAT' INFORMATION UPON WHICH THEY CAN MAKE INFORMED JUDGEMENTS IS AVAILABLE TO ALL IMPARTIALLY," HE SAID.

MR NENDICK SAID THE GOVERNMENT WAS ALSO ADDRESSING THE PARTICULAR PROBLEM OF INSIDER DEALING.

HE SAID THE SECURITIES

(DISCLOSURE OF INTERESTS) ORDINANCE, WHICH WAS ENACTED IN JULY LAST YEAR. WOULD BE BROUGHT INTO FORCE ONCE THE NEW SECURITIES AND FUTURES COMMISSION WAS IN A POSITION TO ENSURE PROPER ENFORCEMENT.

THIS LEGISLATION WOULD ACT AS A DETERRENT ΤΟ CREEPING TAKEOVERS AND INSIDER DEALING AND MAKE IT EASIER TO DETECT THOSE WHO PERSISTED IN BREAKING THE RULES.

"WE ARE ALSO PLANNING SHORTLY TO INTRODUCE LEGISLATION WHICH WILL SUBSTANTIALLY INCREASE THE RANGE OF SANCTIONS WHICH MAY BE IMPOSED ON THOSE WHO ENGAGE IN INSIDER DEALING, HE SAID.

rr

ONCE THE NEW SECURITIES AND FUTURES COMMISSION CAME INTO BEING, HE ADDED, IT WOULD BE PARTICIPATING WITH THE GOVERNMENT IN A MAJOR OVERHAUL OF THE REMAINDER OF OUR SECURITIES AND INVESTOR PROTECTION LEGISLATION.

"THE PRESENT LEGISLATION MAINLY DATES BACK TO THE EARLY 1970'S AND WAS ENACTED IN CIRCUMSTANCES VERY DIFFERENT FROM THOSE WHICH NOW PREVAIL," HE SAID.

MR NENDICK SAID THE GOVERNMENT WAS AWARE OF. AND WOULD AVOID, THE DANGERS OF OVER-REGULATION.

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