ENG-1999 — Page 115

FINANCIAL AND MONETARY AFFAIRS

have a high degree of secondary market liquidity as they are covered under the market-making arrangements for the Exchange Fund Bills and Notes.

The HKMA conferred the status of Recognised Dealer for Exchange Fund Bills and Notes and Specified Instruments to the HKFE Clearing Corporation Limited and the SEHK Options Clearing House Limited in March. This has allowed members of the clearing houses to use their securities as common margin collateral for their positions and has helped in the liquidity management.

With a view to promoting the access of retail investors to investment opportunities on Exchange Fund Note (EFN), the HKMA listed 57 outstanding issues of EFN amounting to $34.1 billion on the Stock Exchange on August 16. This has enhanced secondary market liquidity and channelled the investor base of EFN to the retail level. The system developed for the EFN will pave the way for the listing and trading of corporate bonds on the Stock Exchange.

Human Resources Development in the Financial Services Sector

A robust physical infrastructure cannot function effectively without the input of the right calibre. Human resources have long been an important asset of Hong Kong. Hong Kong needs to have a workforce that is adaptable and well-equipped to meet the challenges ahead and to reap the benefits offered by new opportunities. In December 1997, the Government set up a steering committee with participation of industry representatives and heads of major educational and training bodies to study the need for and feasibility of setting up a financial services institute to enhance the co-ordination of training for the financial services sector. The Steering Committee commissioned a consultancy study to examine the demand for and supply of human resources development in the financial services sector. On the basis of the findings of that study, the Steering Committee submitted its recommendations to the Chief Executive in October, and proposed, among others, that an Advisory Committee on Human Resources Development in the Financial Services Sector be established to provide an ongoing mechanism to match the demand for and supply of human resources development programmes in the financial services sector, and to co- ordinate and motivate sector-wide support to human resources development in pursuit of the longer term benefits of the sector. The Government accepted the recommendations and is in the progress of setting up the advisory committee to co- ordinate human resources development input in the financial services sector.

Year 2000 Readiness of the Financial Services Sector

Given the importance of the Year 2000 issue and the significant impact it might have on the financial services sector and the economy as a whole, the Government set up a steering committee in March 1998 to co-ordinate the efforts of the Government, financial regulators and the industry in ensuring as far as possible that the financial services sector as a whole was ready in time for the millennium date change.

The efforts made by the Hong Kong financial services sector in tackling the Year 2000 problem were widely recognised by the international financial community, and Hong Kong had been regarded as among those best prepared for the problem since early 1999. In the run-up to the transition, all banks, insurance companies, members of the stock and futures exchanges and other financial intermediaries under the supervision of the respective financial regulators reported that they had completed modification and internal testing of all their mission-critical systems. As regards

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