TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 177

CODE 18-77

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Reference.

HKC 100/1

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REPORT OF THE SECURITIES REVIEW COMMISSION

1.

I have spoken to Mr Nendick. He will fax directly to me key sections of the report, together with a summary of recommendations. He also described to me the key recommendations, which are the following:

(i)

(ii)

(iii)

reconstitution of the management committees of the two exchanges so that they should contain broader representation of market participants (corporate as well as individual members);

reinforcement of the position of the Chief Executive of the Stock Exchange;

the transfer of regulatory powers from the Government to the exchanges themselves;

(iv) the establishment of a much stronger Securities

Commission. This would be outside the Civil Service, and would be headed by high powered fulltime staff with international experience of markets. It would be largely funded by the market itself, and would have considerable autonomy in respect of the regulation of markets.

2 June 1988

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