TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 171

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147306

MDLIAN 6069

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REPRESENTATION FOR INDIVIDUAL, CORPORATE AND INDEPENDENT MEMBERS, ENSURE THAT IT IS PROPERLY GOVERNED WORKING IN THE INTERESTS OF

ALL ITS MEMBERS AND USERS:

TWO

TO

(B) A CORE OF PROFESSIONAL AND INDEPENDENT EXECUTIVES FOR THE EXCHANGES ON WHICH TO BUILD THE FOUNDATIONS OF THE SELF-REGULATORY SYSTEM, WHEREBY THE EXCHANGE COMMITTEE SETS POLICY AND THE EXECUTIVE IMPLEMENTS IT:

(C) AN EXTENSION OF THE STOCK EXCHANGE SETTLEMENT PERIOD TO THREE DAYS AND THE EARLY IMPLEMENTATION OF A CENTRAL CLEARING SYSTEM:

(D) RESTRUCTURING THE CLEARING AND GUARANTEE SYSTEM IN THE FUTURES EXCHANGE WITH THE CLEARING HOUSE WITHIN THE EXCHANGE BACKED BY A CLEARING MEMBERS FUND TO STRENGTHEN THE RISK-MANGAGEMENT FUNCTIONS AND TO FACILITATE INFORMATION FLOWS ESSENTIAL TO THE DISCHARGE OF

THESE FUNCTIONS:AND

#

(E) REPLACING THE TWO COMMISSIONS, AND THE COMMISSIONER'S OFFICE WITH A SINGLE INDEPENDENT STATUTORY BODY OUTSIDE THE CIVIL SERVICE, MADE UP OF FULL-TIME REGULATORS, FUNDED LARGELY BY THE MARKET, CHARG- ED WITH ENSURING THAT THE EXCHANGES PROPERLY REGULATE THEIR MARKETS AND WITH RESERVE POWERS DIRECTLY TO REGULATE THE MARKETPLACE

THE EXCHANGES FALL DOWN ON THE JOB.

IF

THESE ARE BEING

EXAMINED CLOSELY BY THE SPECIAL TEAM REFERRED TO IN PARAGRAPH 7 AS TOP PRIORITIES FOR EARLY IMPLEMENTATION AS APPROPRIATE. IT IS HOPED THAT ACTION ON (A), (B) AND (E) COULD BE COMPLETED IN SIX TO NINE MONTHS' TIME AND THAT ON (C) AND (D) IN 18

TO 24 MONTHS' TIME.

PUBLICATION OF THE REPORT

THE ENGLISH VERSION OF THE REPORT WAS PUBLISHED ON 2 JUNE 1988 AND THE CHINESE VERSION ON 9 JUNE.

4.

THE ADMINISTRATION'S

5.

RESPONSE

THE FINANCIAL SECRETARY COMMENTING ON THE DAY OF PUBLICATION OF THE REPORT, SAID THAT THE GOVERNMENT WELCOMED THE REPORT, WHICH WOULD SERVE AS A VALUABLE AND ESSENTIAL BLUEPRINT FOR FUTURE DEVELOPMENTS. HE ADDED THAT THE GOVERNMENT WOULD PROCEED QUICKLY WITH THE EXAMINATION OF SRC'S RECOMMENDATIONS AND, AFTER CONSIDERING VIEWS EXPRESSED ON THE REPORT AND CONSULTING INTERESTED PARTIES,

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