Asia’s ‘armpit’ fears it will be over-regulated
NZPA-Reuter Hong Kong Hong Kong is about to unleash its regulatory watchdog on a wary securities industry.
New laws that some brokers fear may strangle free-wheeling stocks and futures trading in Hong Kong go to a Government vote today.
“There is a real fear that Hong Kong may get overregulated and we don’t want to ruin its character by destroying its flexibility,” said Mr Howard Gorges, director of South China Securities.
Eighteen months after the global stocks crash exposed flaws in management of the Hong Kong Stock Exchange, the colony’s legislative council is expected to approve the bill to set up a Securities and Futures Commission, the Secretary for Monetary Affairs, David Nendick, said. Mr Nendick said at a preliminary meeting on Friday that the bill faced no important opposition. Critics say the commission is an over-reaction to the furore surrounding the fourday closing of the exchange after the October crash and the subsequent arrest of senior exchange officials,
who still await trial, on suspicion of bribery. “The impression is that Hong Kong is a den of thieves where people are arrested every week, but that’s not so,” said a European broker. Many brokers described as draconian the commission’s power to search certain business premises and seize documents without a warrant.
Others say the watchdog threatens to smother the industry with bureaucracy. It duplicates many of the functions of the stock exchange committee and the office of the commissioner for securities, they said. The bill, bom from a Gov-ernment-backed report into the events of October, 1987, sets up a commission of regulators and an advisory board independent of the civil service.
“It annoys me that Hong Kong is always singled out as the armpit of Asia,” said a securities salesman with a local firm.
"Look at Tokyo. Look at Recruit. Hong Kong’s listing regulations are far stricter.”
Mr Nendick argued that the bill brought Hong Kong into line with other main financial centres
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Press, 12 April 1989, Page 40
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330Asia’s ‘armpit’ fears it will be over-regulated Press, 12 April 1989, Page 40
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