XN000022-1994-03-02 — Page 21

WEDNESDAY, MARCH 2, 1994

FOR

ΤΟ

A LARGE DEGREE, THEIR IMPRESSIVE PERFORMANCE IS THE REWARD HONG KONG'S PAST DETERMINATION ΤΟ REACH THE VERY HIGHEST STANDARDS IN THE SUPERVISION OF THE FINANCIAL MARKETS.

"BUT THIS IS A NEVER-ENDING TASK IF WE ARE TO STAY IN THE FIRST RANK OF INTERNATIONAL MARKETS.

"A SPECIAL FEATURE OF THE FINANCIAL SERVICES INDUSTRY IS THE SPEED WITH WHICH NEW PRODUCTS AND NEW SYSTEMS ARE INTRODUCED.

"REGULATORS MUST KEEP PACE WITH INNOVATIONS ΤΟ AVOID COMPROMISING EITHER THE GROWTH OR THE INTEGRITY OF THE MARKETS, HE

SAID.

SIR HAMISH SAID HE WAS DETERMINED THA'T HONG CONTINUE TO KEEP PACE IN THE COMING YEAR.

TT

KONG SHOULD

"THE OPPORTUNITIES FOR ABUSE SUCH AS THAT CAUSED BY INSIDER DEALING MUST BE RESTRICTED.

"WE HAVE ALREADY PROPOSED MEASURES TO BRING DERIVATIVES THE SCOPE OF THE EXISTING LAW.

11

+

WITHIN

IN ADDITION, A REVIEW HAS BEGUN IN CONJUNCTION WITH THE SECURITIES AND FUTURES COMMISSION, TO SEE WHAT MORE SHOULD BE DONE то LIMIT THE SCOPE FOR MALPRACTICE.

HE SAID THE MONETARY AUTHORITY WAS WORKING CLOSELY WITH THE BANKING COMMUNITY ΤΟ MANAGE THE RISKS ARISING FROM FINANCIAL INNOVATION.

IN PARTICULAR, THEY ARR CONSIDERING IMPROVEMENTS ΤΟ BANK PAYMENT AND SETTLEMENT SYSTEM TO DEAL WITH THE MASSIVE GROWTH-IN THE VOLUME OF TRANSACTIONS ON FINANCIAL MARKETS.

"WE

CORPORATE ORDINANCE.

HAVE TRIED IN THE PAST TO RESPOND TO DEVELOPMENTS IN THE WORLD THROUGH PIECEMEAL AMENDMENT OF THE COMPANIES

I BELIEVE THAT WE HAVE REACHED A STAGE WHEN A THOROUGH REVIEW HAS BECOME ESSENTIAL.

I HAVE то TAKE THIS

"WE NOW NEED AN ORDINANCE FOR THE 21ST CENTURY. THEREFORE ASKED THE SECRETARY FOR FINANCIAL SERVICES FORWARD.' HE SAID.

LL

HONG KONG NEEDS TO MAKE ROOM FOR INNOVATIONS, THE FINANCIAL SECRETARY SAID.

ALTHOUGH SHORT SELLING HAD BECOME AN IMPORTANT TOOL FOR HEDGING RISK, HONG KONG STILL HAS RESTRICTIONS WHICH PREVENT THE FULL UTILISATION OF THIS TECHNIQUE.

"TO OVERCOME THIS OBSTACLE, I INTEND TO BRING FORWARD PROPOSALS SHORTLY FOR THE EXEMPTION FROM STAMP DUTY OF STOCK BORROWED FOR UP TO 12 MONTHS, INSTEAD OF THE PRESENT 14 DAYS.

**

"THIS WILL BE A MAJOR STEP FORWARD, HE SAID.

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