TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 141

RESTRICTED

016720 MDLIAN 9773

BODY. SUCH AN APPROACH WOULD ALSO SIGNIFICANTLY SHORTEN THE TIME

REQUIRED TO PRODUCE THE FIRST COUNCIL. (IF LEGISLATION WERE REQUIRED, THE COUNCIL MIGHT NOT BE IN PLACE UNTIL THE END OF THE YEAR.) ALSO,

ALLOWING THE SEHK TO PURSUE ITS RECONSTITUTION AT ITS OWN

INITIATIVE SHOULD ENCOURAGE ITS MEMBERS TO BE MORE CO-OPERATIVE

WITH THE GOVERNMENT IN IMPLEMENTING OTHER RECOMMENDATIONS IN THE

SRC REPORT.

9.

THE GOVERNMENT HAS ALSO INFORMED THE EXCHANGE THAT, SHOULD IT FAIL TO ACHIEVE THE DESIRED RESULTS THROUGH ITS VOLUNTARY EFFORTS, CONSIDERATION WOULD BE GIVEN TO BRINGING ABOUT THE NECESSARY CHANGES

THROUGH LEGISLATION.

POINTS ΤΟ ΜΑΚΕ

10. THE GOVERNMENT WELCOMES THE (NEXT WORD UNDERLINED) VOLUNTARY

EFFORTS OF THE SEHK MANAGEMENT COMMITTEE IN BRINGING EARLY

REVISIONS TO ITS OWN MEMART TO ESTABLISH A COUNCIL IN LINE WITH

THE SRC RECOMMENDATIONS.

11. NOST OF THE PRINCIPAL SRC RECOMMENDATIONS REGARDING THE

RECONSTITUTION OF THE SEHK MANAGEMENT COMMITTEE HAVE BEEN COVERED

BY THE REVISED MEMARK AND THE GOVERNMENT IS SATISIFED THAT THE

AMENDMENTS ARE IN LINE WITH THE SPIRIT OF THE SRC RECOMMENDATIONS.

12. THE SUCCESSFUL IMPLEMENTATION OF THE EXCHANGE'S PROPOSALS WILL

SIGNIFICANTLY REDUCE THE TIME REQUIRED FOR ESTABLISHING THE FIRST COUNCIL, WHICH COULD BE IN PLACE BY OCTOBER 1988. IF LEGISLATION WERE REQUIRED, THE REFORMED GOVERNING BODY MIGHT NOT BE IN PLACE UNTIL THE END OF THIS YEAR AT THE EARLIEST. THE

INITIATIVE OF THE SEHK WILL THEREFORE SPEED UP THE IMPLEMENTATION

OF THE SRC RECOMMENTATIONS.

13. THE SEHK'S INITIATIVE ALSO DEMONSTRATES ITS WILLINGNESS TO

CO-OPERATE WITH THE GOVERNMENT IN BRINGING EARLY IMPROVEMENTS TO

THE SECURITIES INDUSTRY IN HONG KONG, THUS HELP MAINTAIN OUR POSITION AS AN INTERNATIONAL FINANCIAL CENTRE.

14.

ALTHOUGH UNDER THE TRANSITIONAL ARRANGEMENTS, THERE WILL BE NO NOMINATING COMMITTEE (AS RECOMMENDED BY THE SRC) AND THE SEHK IS SEEN TO APPOINT THE FIRST FIVE LAY COUNCIL MEMBERS, (NEXT 6 WORDS UNDERLINED) GOVERNMENT WILL RETAIN SIGNIFICANT INFLUENCE ON ALL (NEXT 5 WORDS UNDERLINED) MEMBERS OF THE FIRST COUNCIL (AND NOT/NOT JUST THE LAY MEMBERS) AS ALL/ALL CANDIDATES FOR ELECTION TO THE FOUR INDIVIDUAL MEMBER SEATS, THE FOUR COPORATE MEMBER SEATS AND THE

3

PAGE

RESTRICTED