Published On: Thu, Jun 24th, 2010

HK SFC Takes Balanced Approach to Regulatory Reform

In its 2009-10 Annual Report published today, the Securities and Futures Commission (SFC) recounts how it continued to address various local and international issues arising from the financial crisis and took steps to fine-tune the existing regulatory regime in the process.

In describing the measures taken to restore market and investor confidence and to introduce regulatory changes, the report notes the SFC’s sensible approach amid calls for drastic and restrictive reforms world-wide.

“Our approach is to strike a balance between regulation and market development to ensure that the effectiveness of regulation is not undermined by the introduction of new financial products and markets and that they do not pose a threat to investor protection and market stability,” said SFC Chairman, Dr Eddy Fong.

Despite another demanding year, the SFC managed to line up a set of co-ordinated proposals to strengthen Hong Kong’s financial regulatory structure to better protect investors while maintaining a strong grip on its core work.

“Through regulatory changes, we believe we can create an environment that is safer for investors without stifling market activities,” said SFC Chief Executive Officer, Mr Martin Wheatley. “If regulatory changes are managed properly, sensibly and transparently, we will find new business opportunities and re-build investor confidence. We will continue to monitor the markets to see if further fine-tuning needs to be made. ”

Stressing that no single solution is perfect for all, Mr Wheatley says that the SFC will continue to participate in global efforts to harmonise standards and approaches to financial regulation without losing track of what is best and most appropriate locally.

In the annual report, the SFC also mentions the conclusion of its investigation into Minibonds, its breakthroughs in combating market misconduct, its efforts in upholding intermediary standards, and initiatives taken in fostering market development. It also tells of investor education initiatives focusing on cultivating a proper investment attitude and the groundwork laid for setting up an education body to improve the public’s financial literacy.

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