ENG-2012 — Page 105

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Financial and Monetary Affairs

Index (HSI) Futures with total turnover of 20.4 million contracts; H-shares Index Futures with total turnover of 15.9 million contracts; HSI Options with total turnover of 9.2 million contracts; H-shares Index Options with total turnover of 6.3 million contracts; and Stock Options with total turnover of 56.1 million contracts.

Statistics on derivatives market turnover (million contracts)

2010

2011

2012

All options and futures contracts

116

140

120

Of which:

HSI Futures

21

23

20

H-shares Index Futures

12

15

16

HSI Options

9

11

9

H-shares Index Options

3

4

6

10

Stock Options

61

74

56

At the end of 2012, there were 23 automated trading services providers, comprising mainly foreign exchanges and regulated entities, authorised by the SFC to provide automated trading services in Hong Kong. Automated trading services are services provided by means of electronic facilities, not being facilities provided by a recognised exchange company or a recognised clearing house, to transact or settle transactions in securities or futures contracts.

Securities and Futures Commission

The SFC was established in 1989 as an autonomous body that is responsible for regulating the securities and futures markets in Hong Kong. The SFC is funded by the market, with total expenditure in 2012-13 estimated to be $1,292 million.

The SFC's powers are subject to a range of checks and balances. For instance, a wide range of SFC decisions is subject to appeal to the independent Securities and Futures Appeals Tribunal. The Process Review Panel for the SFC reviews and advises the SFC on the adequacy of the internal procedures and operational guidelines governing its actions and operational decisions in performing its regulatory functions.

The SFC's work is wide in scope. It starts with setting standards for industry participants through a licensing system and extends to the supervision and monitoring of intermediaries, enforcing of securities laws and rules, and regulating offering documents and promotional materials for retail investment products. Together with the SEHK, the SFC ensures the quality of disclosure of listing applicants and securities issuers. It oversees takeovers, mergers and privatisations of listed companies, the markets, the exchanges, the clearing houses and alternative trading platforms. In addition, the SFC works with counterparts in Hong Kong, the Mainland and overseas on issues that require regulatory collaboration and assumes the statutory role of educating investors on investment risks and the importance of making informed investment decisions. With the establishment of the Investor Education Centre in November 2012, the SFC

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