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Hong Kong Government Plans To Merge Investor Compensation Schemes

Mary Swire, Tax-news.com, Hong Kong

15 January 2001

The Hong Kong government intends to amalgamate investment compensation companies under one independent umbrella organisation, said Mark Dickens, committee member and executive director of the Securities and Futures Commission (SFC), during a LegCo meeting last week.

The Government made its announcement after a private amendment to the same effect was moved during consideration of the Securities and Futures Bill. It's widely agreed in Hong Kong that the SAR currently has too many investor compensation companies which can confuse investors attempting to lodge claims.

The Securities and Futures Bill, currently in the process of passing through government, was introduced into the Legislative Council in November last year. The aim of the Bill, says Sephen Ip, Secretary for Financial Services, is to 'modernise the regulatory regime for the securities and futures industry ... to bring Hong Kong on a par with international standards and maintain ... competitiveness as a major international financial centre.'

Major new regulatory measures set out in the Bill include the introduction of a single licence for market intermediaries, the establishment of a civil Market Misconduct Tribunal giving investigative powers to the SFC to combat market misconduct, and the implementation of a flexible framework to facilitate market innovation.

It's not clear whether the administration plans to merge compensation schemes under the aegis of the SFC or through a separate body.

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