TNAG-1854-FCO40-2629-Legislative-Council-of-Hong-Kong-memoranda-and-minutes-of-me-1989 — Page 249

HONG KONG LEGISLATIVE COUNCIL 18 January 1989

香港立法局

一九八九年一月十八日

55

Clause 9 of the Bill provides for the establishment of an advisory committee to advise the commission on policy matters related to markets. The advisory committee will be appointed by the Governor, and will comprise six to 10 members drawn from the various sectors of the securities, futures and investment management industries, together with other appropriately qualified persons. The chairman and deputy chairman of the commission will sit on the advisory committee as ex-officio members. The chairman will also chair the advisory committee.

The Governor will be able to give policy directions to the commission. Also, the Financial Secretary will be able to call for information from the commission on matters related to its policies. The commission will be required to present an annual report and audited statement of accounts, to be laid before this Council, and its budget will be subject to the Governor's approval. The Director of Audit will also be able to examine its books.

Part III of the Bill provides for the establishment of a Securities and Futures Board of Appeal. This board replaces the present Disciplinary and Appeals Committees of the Securities Commission and the Commodities Trading Commission.

The Board of Appeal will have 12 members, namely a standing chairman and deputy chairman, both qualified in law, the five non-executive directors of the Securities and Futures Commission, and five other persons appointed by the Governor and independent of the commission. Each case will be heard by a group of three, consisting the chairman (or deputy chairman), one independent member of the board and one non-executive director of the commission. It is intended that under the administrative procedures of the commission, the non- executive directors will not be involved in executive decisions on individual cases. Most appeals will lie to the Board of Appeal directly from a decision of an executive director or committee of the commission. In the rare cases where the full commission is to sit, it is intended, wherever practicable, to omit one non-executive director from full hearing, in case an appeal to the Board of Appeal is taken.

Under the present Ordinances, suspension or revocation of registration takes immediate effect, even if an appeal is lodged. The new appeal provisions will allow persons concerned to remain in business while the appeal is being heard. The intervention powers are, however, immediately effective. Therefore, if a situation arises requiring swift action to protect investors from loss, this can be achieved.