LCQ19: Mechanism for declaration of interests for hosts of
factual programmes
*********************************************************** Following is a question by the Hon Albert Jinghan Cheng and a written reply by the Secretary for Commerce, Industry and Technology, Mr John Tsang, in the Legislative Council today (October 19):
Question:
It has been reported that, in introducing and recommending individual covered warrants (commonly known as "warrants") on their programmes, hosts of business/financial programmes in the local media might have shown favouritism towards individual issuers and misled small investors. Moreover, as the market-making system is adopted in the local warrant market, market manipulation is prone to arise. In this connection, will the Government inform this Council:
(a) how it prevents hosts of such business/financial programmes from showing favouritism towards individual warrant issuers and misleading small investors on their programmes;
(b) whether it knows if the Broadcasting Authority (BA) has investigated if hosts of such programmes have assisted issuers in manipulating the market; and
(c) whether it knows if BA, the Independent Commission Against Corruption and Securities and Futures Commission have issued any guidelines concerning the contents of such business/financial programmes, and whether a system of declaration of interests has been established for hosts of such programmes?
Reply:
Madam President,
(a) Licensed television and sound broadcasters (licensees) have to comply with the codes of practice (the codes) issued by the Broadcasting Authority (BA). Radio Television Hong Kong has also agreed to comply with the codes on a voluntary basis.
To prevent programmes from misleading the public, paragraph 3 of Chapter 9 of the Generic Code of Practice on Television Programme Standards and paragraph 22 of the Radio Code of Practice on Programme Standards require the licensees to ensure that due impartiality is preserved in respect of factual programmes (including financial programmes). Licensees must make every reasonable effort to ensure that the factual content of programmes is accurate. The programmes should not be slanted by the concealment of facts or by misleading emphasis.
On safeguards against conflict of interest, paragraph 8 of Chapter 9 of the Generic Code of Practice on Television Programme Standards and paragraph 27 of the Radio Code of Practice on Programme Standards stipulate that the licensee shall devise and institutionalise a mechanism whereby its presenters of factual programmes are required to disclose the existence of any commercial agreement or arrangement that may call into question the fairness or impartiality of the programmes. The licensee must also exercise its editorial judgement and decide whether the relevant programme presenter(s) should refrain from taking part in discussion of issues over which he/she may have conflict of interest; or a disclosure announcement of the existence of a relevant commercial agreement should be made at the time of broadcast of the programme material.
The licensee shall receive and consider any complaint from any member of the public with respect to the potential conflict of interest of its programmes. The licensee shall inform the complainant and the BA of the findings of its investigation and make the findings available for public inspection free of charge by, for example, posting them on its website. The purpose is to enhance the transparency of programmes, so as to let members of the public participate in scrutinising if a presenter's comments constitute a conflict of interest.
The BA requires the licensees to comply with the provisions as stipulated in the codes in spirit as well as in letter and that the codes should be read in conjunction with relevant legislation and licence conditions currently in force, including the Securities and Futures Ordinance that regulates the securities and futures markets.
On the other hand, the Securities and Futures Commission (SFC) requires all firms and individuals licensed by the SFC for conducting regulated activities to comply with the following requirements set out in the Code of Conduct issued by the SFC when they prepare and publish investment research on securities (including stocks and derivatives) or otherwise disseminate all or part of their investment research in the mass media (printed materials and broadcasting):
(i) When the abovementioned person provides analyses or comments on securities in respect of a listed corporation in the mass media in his/her personal capacity, including appearing in person, he/she should disclose the following at the time the analyses or comments are provided -
(I) his/her name:
(II) his/her licence status; and
(III) where he/she and/or his/her associate has a financial interest in the listed corporation, the fact of having such an interest.
(ii) When the abovementioned person is asked by members of an audience, or otherwise by a journalist, for analyses or comments on specific securities, he/she may offer such analyses or comments, provided that he/she makes the disclosures as mentioned above.
(b) In such cases, the BA will refer the matter to relevant authorities for investigation. The SFC will also investigate any person (whether programme hosts or otherwise) suspected of engaging in market misconduct activities.
(c) The Independent Commission Against Corruption has not issued any relevant guidelines. The codes issued by the BA and SFC are cited in the reply to part (a) above.
factual programmes
*********************************************************** Following is a question by the Hon Albert Jinghan Cheng and a written reply by the Secretary for Commerce, Industry and Technology, Mr John Tsang, in the Legislative Council today (October 19):
Question:
It has been reported that, in introducing and recommending individual covered warrants (commonly known as "warrants") on their programmes, hosts of business/financial programmes in the local media might have shown favouritism towards individual issuers and misled small investors. Moreover, as the market-making system is adopted in the local warrant market, market manipulation is prone to arise. In this connection, will the Government inform this Council:
(a) how it prevents hosts of such business/financial programmes from showing favouritism towards individual warrant issuers and misleading small investors on their programmes;
(b) whether it knows if the Broadcasting Authority (BA) has investigated if hosts of such programmes have assisted issuers in manipulating the market; and
(c) whether it knows if BA, the Independent Commission Against Corruption and Securities and Futures Commission have issued any guidelines concerning the contents of such business/financial programmes, and whether a system of declaration of interests has been established for hosts of such programmes?
Reply:
Madam President,
(a) Licensed television and sound broadcasters (licensees) have to comply with the codes of practice (the codes) issued by the Broadcasting Authority (BA). Radio Television Hong Kong has also agreed to comply with the codes on a voluntary basis.
To prevent programmes from misleading the public, paragraph 3 of Chapter 9 of the Generic Code of Practice on Television Programme Standards and paragraph 22 of the Radio Code of Practice on Programme Standards require the licensees to ensure that due impartiality is preserved in respect of factual programmes (including financial programmes). Licensees must make every reasonable effort to ensure that the factual content of programmes is accurate. The programmes should not be slanted by the concealment of facts or by misleading emphasis.
On safeguards against conflict of interest, paragraph 8 of Chapter 9 of the Generic Code of Practice on Television Programme Standards and paragraph 27 of the Radio Code of Practice on Programme Standards stipulate that the licensee shall devise and institutionalise a mechanism whereby its presenters of factual programmes are required to disclose the existence of any commercial agreement or arrangement that may call into question the fairness or impartiality of the programmes. The licensee must also exercise its editorial judgement and decide whether the relevant programme presenter(s) should refrain from taking part in discussion of issues over which he/she may have conflict of interest; or a disclosure announcement of the existence of a relevant commercial agreement should be made at the time of broadcast of the programme material.
The licensee shall receive and consider any complaint from any member of the public with respect to the potential conflict of interest of its programmes. The licensee shall inform the complainant and the BA of the findings of its investigation and make the findings available for public inspection free of charge by, for example, posting them on its website. The purpose is to enhance the transparency of programmes, so as to let members of the public participate in scrutinising if a presenter's comments constitute a conflict of interest.
The BA requires the licensees to comply with the provisions as stipulated in the codes in spirit as well as in letter and that the codes should be read in conjunction with relevant legislation and licence conditions currently in force, including the Securities and Futures Ordinance that regulates the securities and futures markets.
On the other hand, the Securities and Futures Commission (SFC) requires all firms and individuals licensed by the SFC for conducting regulated activities to comply with the following requirements set out in the Code of Conduct issued by the SFC when they prepare and publish investment research on securities (including stocks and derivatives) or otherwise disseminate all or part of their investment research in the mass media (printed materials and broadcasting):
(i) When the abovementioned person provides analyses or comments on securities in respect of a listed corporation in the mass media in his/her personal capacity, including appearing in person, he/she should disclose the following at the time the analyses or comments are provided -
(I) his/her name:
(II) his/her licence status; and
(III) where he/she and/or his/her associate has a financial interest in the listed corporation, the fact of having such an interest.
(ii) When the abovementioned person is asked by members of an audience, or otherwise by a journalist, for analyses or comments on specific securities, he/she may offer such analyses or comments, provided that he/she makes the disclosures as mentioned above.
(b) In such cases, the BA will refer the matter to relevant authorities for investigation. The SFC will also investigate any person (whether programme hosts or otherwise) suspected of engaging in market misconduct activities.
(c) The Independent Commission Against Corruption has not issued any relevant guidelines. The codes issued by the BA and SFC are cited in the reply to part (a) above.
Ends/Wednesday, October 19, 2005
Issued at HKT 12:59
NNNN