TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 144

For decision

on 28 June 1988

CONFIDENTIAL My Paul ti

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XCC(88)960 Copy No.

MEMORANDUM FOR EXECUTIVE · COUNCIL

HKC 100

100/1

REPORT OF THE SECURITIES REVIEW COMMITTEE - IMPLEMENTATION

RECONSTITUTION OF THE HONG KONG STOCK EXCHANGE LIMITED

59

THE PROBLEM

1

The

Securities Review Committee (SRC) has recommended a fundamental revision of the constitution of the Hong Kong Stock Exchange (SEHK) to ensure that the Exchange is properly governed and works in the interests of all members and users. The SEHK Management Committee has now put forward their own proposals for early implementation of the majority of the SRC recommendations. As the SEHK intends to publicize their proposals following

the endorsement by the Management Committee on Tuesday, 28 June 1988, a Government response

these proposals is urgently required.

to

RECOMMENDATION AND ADVICE SOUGHT

2

3

(a).

It is recommended that the Government

welcomes the initiative of the SEHK in seeking early implementation of the SRC recommendations;

(b)

endorses

(c)

the

constitutional changes proposed by the SEHK as described in paragraph 6; and

indicates that should the voluntary efforts of the

the SEHK fail, legislation would need to be enacted to ensure the necessary reconstitution of the SEHK as recommended by the SRC.

Members will be asked recommendations should be approved.

to

advise whether these

BAKCGROUND AND ARGUMENT

4

The SRC's observations regarding the constitution of the SEHK Committee are outlined in paragraph 4.25 of the

CONFIDENTIAL