TNAG-2306-FCO40-3340-Future-of-Hong-Kong-stock-market-and-exchange-rate-1991 — Page 52

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HONG KONG. THANKS TO HIS INFLUENCE, AND THE RECOGNITION THAT FAILURE TO TAKE ACTION WOULD RESULT IN INTERVENTION BY THE SFC, THE RESOLUTIONS WERE RESCINDED AT A COUNCIL MEETING ON 2 MAY.

5. THESE DEVELOPMENTS WERE NOT TOTALLY UNEXPECTED. WE HAVE BEEN AWARE THAT THE SEHK HAS BEEN TENDING TO DRIFT BACK INTO THE HANDS OF A CLIQUE OF THE ''OLD GUARD'' WHICH STILL VIEWS THE EXCHANGE MORE AS A PRIVATE CLUB RATHER THAN AS A PUBLIC UTILITY. WE HAD BEEN CONSIDERING HOW BEST TO COUNTER THAT TREND AGAINST THE DIFFICULT BACKGROUND OF A LACK OF PUBLIC PERCEPTION OF ANY SERIOUS SHORT-COMINGS (AND JARDINE MATHESON'S CAMPAIGN AGAINST ''OVER-REGULATION'' IN HONG KONG). IN THIS RESPECT THEREFORE THE DEVELOPMENTS, THOUGH UNWELCOME IN THEMSELVES, MAY NOW PROVE HELPFUL IN ENABLING US TO GET THROUGH THE FURTHER REFORMS WE REGARD AS NECESSARY IF THE SEHK'S STRUCTURE IS TO BE BROUGHT FULLY INTO LINE WITH THAT OF EXCHANGES IN OTHER INTERNATIONAL FINANCIAL CENTRES.

6. SO FAR PRESS COVERAGE HAS BEEN VERY SUPPORTIVE OF THE STANCE TAKEN BY THE GOVERNMENT AND THE SFC.

WILSON

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