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FINANCIAL AND MONETARY AFFAIRS

with the CMU. In addition to Hong Kong dollar denominated debt instruments, the system also accepts foreign currency denominated debt instruments. The Securities Lending and Borrowing Programme for CMU private sector debt securities has enhanced the liquidity of private sector debt securities in the secondary market through the market making process.

The CMU system was fully integrated with the new interbank payment system when the latter went live on RTGS in December 1996. Delivery versus Payment (DvP), both real time and end-of-day, became available. This matches international best practice in providing efficient, robust and risk-free clearing and settlement facilities for debt securities. Following this successful system interface established between the CMU and the Hong Kong Dollar RTGS System, the CMU is implementing another system link up with the newly launched US Dollar Payment System. Similarly, through this system interface, the CMU can provide real-time and end-of-day US dollar DvP transaction settlement as well as US dollar intraday and overnight repo facilities. This will further enhance the attraction and the usage of the US Dollar Payment System. The operation of this interface commenced on December 18.

With a view to maintaining and enhancing Hong Kong's role as an international financial centre, the HKMA plans to modernise the CMU and to link up more intensively with the other international central securities depositories so as to better equip itself to serve Hong Kong and the regional debt market. The CMU is expected to assume more international dimensions in the years to come.

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 in 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 1999, 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 Advisory Committee was established in June comprising representatives from the regulators, the industry, professional bodies, academic institutions and government bureaux.

Structural Reform for the Securities and Futures Market

The international financial market and the exchange industry are changing rapidly. Hong Kong must respond proactively to secure its leadership within the region and to reinforce its position as a global financial centre. Against this background, the

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