ENG-2011 — Page 117

Financial and Monetary Affairs | 81

Developing Islamic Finance

In 2011, the Government continued to create an environment conducive to development of Islamic finance in Hong Kong in collaboration with the financial regulators and the private sector. Its efforts focused on four broad areas: putting in place the necessary infrastructure, enhancing Hong Kong's linkages with other major Islamic financial markets, promoting market knowledge of Islamic finance, and encouraging product development.

On the development of infrastructure, the Government is preparing a legislative proposal to amend the IRO and the Stamp Duty Ordinance to promote the development of Islamic finance in Hong Kong. The proposal seeks to level the playing field for issuing and trading common types of Islamic bonds such as sukuk in relation to their conventional counterparts as far as the tax liabilities are concerned. In this connection, the Government will conduct a public consultation on the draft legislation in the first quarter of 2012 to ensure that the legislative amendments can meet the latest market needs.

Improving Market Quality and Investor Protection

Proposed Statutory Codification of Certain Requirements to Disclose Price Sensitive Information by Listed Corporations

The Government introduced a bill into the Legislative Council to codify the disclosure of Price Sensitive Information (PSI) in the Securities and Futures Ordinance (SFO) in June 2011. The statutory regime to require listed corporations to disclose PSI in a timely manner will enhance market transparency and quality, bring Hong Kong's regulatory regime for listed corporations more in line with those of overseas jurisdictions, and sustain Hong Kong's position as a premier capital formation centre in the region. The Government aims to enact the bill within the 2011-12 legislative session and implement the new PSI disclosure regime in the first quarter of 2013.

Proposed Establishment of an Investor Education Body and a Financial Dispute Resolution Centre

The Government announced in December 2010 its decision to establish an investor education body as a wholly-owned subsidiary of the SFC and a Financial Dispute Resolution Centre (FDRC) as a company limited by guarantee to enhance protection for investors. The new investor education body will holistically oversee the delivery of investor education. FDRC, on the other hand, helps consumers settle their monetary disputes with financial institutions through an impartial, simple and quick resolution mechanism. The Government introduced into the Legislative Council in June 2011 the Securities and Futures (Amendment) Bill 2011 which, among other things, enabled the new investor education body to be established under the SFC. The education body is expected to be operational about the end of 2012. The Government is also preparing for the establishment of FDRC by mid-2012.

Proposed Establishment of a Policyholders' Protection Fund

To enhance market stability and provide a safety net for policyholders in the event of an insurer becoming insolvent, the Government has proposed the