FS' response to Report by Expert Group to Review the Operation of the Securities and Futures Market Regulatory Structure

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The Expert Group to Review the Operation of the Securities and Futures Market Regulatory Structure submitted to the Financial Secretary, Mr Antony Leung, and published its Report (Expert Group Report) today (March 21). Following is a statement made by the Financial Secretary in response:

"I welcome the publication of the Expert Group Report today.

I commend the Expert Group, led by Mr Alan Cameron and with Dr Raymond Ch'ien and Mr Peter Clarke as members, for their extensive consultation on, and thorough examination of, the regulation of listing matters.

The Expert Group has set out its views on the direction for the future development of the regulatory regime, in particular with regard to the roles of the Securities and Futures Commission (SFC) and the Hong Kong Exchanges and Clearing Limited (HKEx) on listing matters. We believe that the direction recommended is appropriate and will enhance the quality of our market. Our regulatory regime must evolve in tandem with new market developments if Hong Kong is to strengthen its competitiveness as an international financial centre and the premier fund raising centre for our country.

We will work with relevant parties, particularly SFC and HKEx, to draw up a programme for implementing the Expert Group's recommendations for the transfer of listing functions. We will put forward a proposal to the Executive Council as soon as possible.

We are fully aware of the implications of the Expert Group's recommendations on the future roles of SFC and HKEx. We will, in conjunction with other parties, endeavour to ensure that the changes will be bottom-line neutral to HKEx as a listed company at the time of transfer. We are also sensitive to the needs of the market and will take every possible step to ensure that the transition is smooth, that the new listing regime has an appropriate balance of market savvy and regulatory expertise, and that the new listing arrangements will be both user-friendly and conducive to healthy market development.

I look forward to the implementation of the recommendations in respect of listing matters in 18 months."

End/Friday, March 21, 2003

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