TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 187

strengthening its systems and regulatory

arrangements.

We reject fundamental changes in favour of building on existing systems, as the success of Hong Kong's financial services market depends largely on the healthy working of the free enterprise system which has demonstrated a dynamic

capacity for promoting innovation and growth. We have

therefore decided that practitioner regulation should

continue but that safeguards will have to be introduced at

every level.

1.9.

To this end, we have recommended, inter alia :

(a) a fundamental revision of the internal

constitution of both the Exchanges; in

particular, in the case of the Stock

Exchange, there should be proper

representation on the governing body for individual and corporate members, combined

with an independent element to ensure that

the Exchange is properly governed and

works in the interests of all members and

users;

(b) the

development

of

a

professional, independent

the two Exchanges, with governing bodies setting executives implementing it;

staff of

executives in

the Exchange

policy and the

(c) an extension of the Stock Exchange

settlement period to three days which

should be strictly enforced and the early

development of a central clearing system;

(d) the continuation of the Hong Kong Futures

Exchange and its stock index contract but

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