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I am extremely honoured to be appointed by the Chief Executive as the Chairman-designate of the Hong Kong Securities and Futures Commission (SFC). This is personally a most challenging responsibility.

I have been very happy working at the Hong Kong Monetary Authority (HKMA). Under the leadership of Mr Joseph Yam, I have learnt a lot. In the last five years, I have been very privileged to be working so closely with all my tireless colleagues on strengthening the monetary and financial system in Hong Kong.

However, given the tremendous and exciting challenge of the new job in the field of securities regulation, I feel extremely honoured to be offered this appointment, with the encouragement and support from Joseph, Mr Rafael Hui, the Secretary for Financial Services and Mr Donald Tsang, the Financial Secretary.

As a result of the Asian financial crisis, Hong Kong is going through a difficult period of adjustment, and therefore the securities markets are facing a difficult period. There are three major reasons why I have accepted the new challenge:-

* First, financial markets are developing rapidly. The Asian financial crisis demonstrates the need for firm regulation and supervision. There should also be very close cooperation between the regulators, both domestically and internationally. The cooperation between the SFC and the HKMA has been very good. With my background and experience, I believe we will strengthen that cooperation.

* Second, Asian financial markets, including that of mainland China, are developing rapidly. It is important to promote Hong Kong's status as an international financial centre, and as the premier capital formation center for China.

* Thirdly, I believe that securities regulation will be a tremendous challenge for myself personally.

As this is a regulator's job, let me set down four major principles of regulation that I firmly believe in:-

* Market confidence and trust

* Market integrity and fairness

* A level playing field in competition

* Transparency and disclosure

I believe my future job involves building market trust and confidence as a matter of priority through sound and firm regulation. Without investor confidence and trust, the market cannot thrive. Therefore I would also like to work very closely with the newly established Securities Institute in the area of market education and training.

I would like to thank the present Chairman and my good friend, Mr Anthony Neoh for the tremendous contribution that he has made in building the capacity and reputation of the SFC both domestically and internationally. His is a tough act to follow. I intend to consult him regularly and in depth.

Finally, I hope to work very closely with all my colleagues in the Hong Kong SAR Government, the HKMA, the Stock Exchange and the Hong Kong Futures Exchange to achieve the above objectives.

Thank you.

End/Friday, June 26, 1998

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