XN000022-1996-12-11 — Page 52

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28.

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(a)

(b)

(c)

which organisation is responsible for compiling the Hang Seng London Reference Index (the Index) which reflects the price movements of Hong Kong stocks traded in London;

whether the authority concerned will consider asking the organisation concerned to publish daily the movement of the Index and transaction details of Hong Kong stocks traded in London for public reference; if not, why not; and

whether the authority concerned has considered the possibility of the Index being exploited as a tool for market manipulation?

Answer:

(a)

(b)

હ

(c)

The Hang Seng London Reference Index (the Index) is compiled by the HSI Services Limited (the company), a subsidiary of the Hang Seng Bank Limited, which is also the publisher of the Hang Seng Index.

Neither the Administration nor the Securities and Futures Commission (SFC) have plans to ask the company to publish daily the movement of the Index and transaction details of Hong Kong stocks traded in London, not only because the SFC has no regulatory authority over the company, but also because many other service providers are already publishing a variety of transaction information including the ones mentioned in the question.

A financial index, such as the Hang Seng London Reference Index, primarily reflects the performance of its constituent stocks in a particular market and would have no greater influence over the market than the trading activities of its constituent stocks. There are a variety of factors affecting the performance of Hong Kong stocks and the level of related indices, including the state of our economy and the world's leading economies, movements in interest rates, and trading activities of Hong Kong stocks in other overseas markets. The possibility of the Index being exploited as a tool for market manipulation is no higher than that inherent in the actual trading of its constituent stocks.

End