TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 188

1.10.

with the clearing and guarantee system being restructured to strengthen the risk

management arrangements; in particular, the clearing house should become part of the Exchange and the guarantee should be backed by a Clearing Members' Fund; and

(e) replacing the two Commissions and the

Commissioner's Office with a single independent statutory body outside the

Civil Service; it should be headed and

staffed by full-time regulators and funded largely by the market; it should be

charged with ensuring the integrity of markets and the protection of investors; in particular, it should ensure that the Exchanges properly regulate their markets and should have extensive reserve powers to intervene if they fall down on the job.

We believe that the early implementation of our recommendations will lay the foundations for the proper regulation of the Hong Kong securities industry.

and

1.11.

In the chapters which follow, we set out our general principles and

and major objectives against the background of the present state of the Hong Kong markets how we see their development. We then address in turn the various problem areas identified in the Stock Exchange, the Futures Exchange, the two Commissions and the Office of the Commissioner.

7