TNAG-1765-FCO40-2519-Hong-Kong-stock-market-and-exchange-rate-1989 — Page 193

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markets by a strict statutory regime which might

securities

all

too

easily

lead

over-regulation.

insensitive

heavy handed

Laissez-faire bas served Hong Kong too

well for it to be abandoned altogether just because it has

been ineptly used and grossly abused."

But in

regulation

we

and balances.

view of Hong Kong's experiences of insider

believe that there must be effective checks

In our report we lay down four requirements

(1)

A two tier system of supervision with the

exchanges regulating their own affairs under the watchful eye of a single statutory body.

(2) The

statutory supervisor

should be detached

from the Government so that if the supervisor

fails then and only then should Government

step in.

(3)

The

integrity

undoubted

and

of

we

the market bodies must be

the Propose

inclusion of

independent

members

on

the

Boards

of

all

exchanges and clearing houses.