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Securities and Futures (Amendment) Bill 2005

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    The Securities and Futures (Amendment) Bill 2005, which provides for the separation of the role of the chairman of the Securities and Futures Commission (SFC) from that of the executive arm of the SFC, will be published in the Government Gazette this Friday (March 11).

    The proposal seeks to build on the current strengths of the SFC and further enhance its internal governance.

    A government spokesman said today (March 9), "Over the past 16 years, the SFC has successfully put in place a regulatory framework on a par with international standards, which enshrines the principles of competitiveness, fairness and investor protection. As our securities market has grown from principally domestic to being one of the leading international markets and a premier capital formation centre for the Mainland, there is a need for us to continually enhance the regulatory structure to ensure the effective functioning of the SFC in order to meet the challenges in future.

    "The Government's role is to ensure that the SFC has the necessary statutory powers to carry out its regulatory objectives effectively and independently, and that its powers are checked by sufficient safeguards as set out clearly in the legislation. It is therefore critical that the Commission should have a good internal governance structure in place so that the SFC is, and is seen to be, a credible, effective and independent regulator."

    Under the proposed structure, the SFC will be led by a chairman whose role will be separated from the executive arm, while the executive arm will be headed by a Chief Executive Officer (CEO). This model is in line with best governance practice both locally and internationally.  

    The future chairman will lead the SFC board in setting the overall direction, policies and strategies of the Commission and monitoring the performance of the executive arm in fulfilling the objectives, policies and strategies set by the board. To enhance internal checks and balances, the future chairman will not be involved in the day-to-day running of the SFC. As for the CEO, he/she has the executive responsibility for the day-to-day running of the SFC. He/She should implement the objectives, policies and strategies agreed by the board, and facilitate its effective functioning.

    The Bill will be introduced into the Legislative Council on April 6.

Ends/Wednesday, March 9, 2005

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