SFC Leadership Proposals May Compromise Independence
by Mary Swire, Tax-News.com, Hong Kong
15 November 2004

Hong Kong lawmakers have expressed concerns that the government may have difficulties finding a suitable candidate to fill the new non-executive chairman’s role at the Securities and Futures Commission, due to the possibility that the regulator’s independence may be compromised.

The proposed new organisational structure will mean that the chairman will only have an input into broader issues of policy, whilst the chief executive will be responsible for day-to-day decision making.

However, the government needs to ensure that the new chairman has no material interest in any firm or business in Hong Kong, and some have suggested that this may significantly limit the government’s potential choice of candidates.

Addressing a meeting of the Legislative Council last week, lawmaker Emily Lau noted that “it may be difficult for the government to find a suitable candidate who needs to be independent from the government as well as the business community”.

Fellow legislator James Tien expressed similar reservations, observing that the strict selection criteria for the new post would limit the government’s options when seeking a candidate for the role.

However, Secretary for Financial Services and the Treasury, Frederick Ma has expressed confidence in the government’s ability to maintain the SFC’s independence, although he conceded that the “firewall is a little bit too thick.”

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