Old friends of yours? Be seeing them soon?: "HK Proposes Boosting Market Watchdog's Powers, Other Reforms
Hong Kong, April 2 (Bloomberg) -- The Hong Kong government unveiled a reform plan for the city's securities and
futures market, including stronger powers for the market watchdog, as it overhauls market regulations to boost
competitiveness.
The government set out the measures in a consultation document on the new Securities and Futures Bill it's currently
drafting. It gave market participants three months to respond to the proposals.
``Hong Kong needs a modern regulatory framework for the securities and futures market to enhance our
competitiveness as an international financial center and the prime capital formation center for the mainland of China,'
said Rafael Hui, Secretary for Financial Services.
The government last year unveiled plans for broad reforms of the securities industry. Hong Kong's stock and futures
exchange last month merged with the city's clearing company to form Hong Kong Exchanges and Clearing Ltd., a
move aimed at helping the financial center compete with regional rivals by cutting costs.
To crack down on market misconduct, the government plans to broaden the investigative powers of the Securities and
Futures Commission, giving it access to companies' audit documents.
The government proposed setting up a civil market misconduct tribunal and imposing criminal penalties on some
violations, such as insider trading and fraud aimed at investors.
Under the bill, securities firms would be fined up to HK$10 million ($1.28 million) or three times their profits for
misconduct. At the same time, the new rules would cut red tape for brokerages by requiring a single license rather than
separate ones for different services they provide.
The government also said it plans to strengthen Hong Kong's disclosure rules by lowering the threshold for disclosure
of investments to 5 percent from 10 percent and requiring companies to report large-volume transactions.
In a bid to empower investors, the new law would make it a civil offense to disclose false information to the market and
allow victims to seek compensation.
The Securities and Futures Bill will roll 10 existing ordinances enacted over the last 25 years into a single piece of
legislation. The government plans to start enforcing the new law in April 2001.
Apr/02/2000 4:36"
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