Press Release
SFST urges professionals to seek good governance and uphold professional ethics and integrity
Tuesday, June 24, 2003
The Secretary for Financial Services and the Treasury, Mr Frederick Ma, today (June 24) called on the professionals in Hong Kong to continue to seek improvements in corporate governance and to uphold the highest professional ethics and integrity.
"Good corporate governance is not premised solely on a comprehensive set of rules and regulations, for recent experience has shown that rules and regulations and regulations are only as good as the people seeking to apply and enforce them," Mr Ma said.
Delivering a keynote address at a Chief Financial Officers (CFOs) Forum this afternoon, Mr Ma said CFOs had an important role in the context of fostering corporate accountability and disclosure and he believed good governance is the key to sustainable success in these turbulent times.
Noting that recent corporate failures had put accountants, accounting and auditing standards under sharp focus, he said, "The policy requirement is very clear: the regime regulating accountants must be effective, transparent, accountable and in line with international developments."
Mr Ma noted that in response to public concern, he initiated discussion with the accounting profession on possible enhancement of the regulatory regime and was glad that the Hong Kong Society of Accountants (HKSA) had responded positively and would take forward proposals to enhance transparency and accountability of the Society by introducing a Member's Bill into the Legislative Council. "We support the HKSA's proposals as they are in line with international developments of independent oversight of the profession and also conducive to fostering confidence in the profession," he said.
On related proposals to establish an Independent Investigation Board and a Financial Reporting Review Panel, he said the administration expected to issue a consultation paper in July/August 2003.
The reform of accounting profession is part of a Corporate Governance Action Plan for 2003 which was drawn up and announced by Mr Ma earlier this year against the background of rising public expectations for the Government, regulators, professionals, and corporations to further enhance our corporate governance standards. The aim of the Action Plan, prepared jointly with the Securities and Futures Commission and HKEx, is to upgrade the quality of the equity market with a view to maintaining Hong Kong's competitiveness as an international financial centre and the preferred support base for companies operated in the Mainland.
"I am glad to say that good progress has been made to bring the initiatives to fruition," Mr Ma said. Such progress include:
- the effective roll out of the Securities and Futures Ordinance in April this year;
- the release of two consultation paper in May with proposals to enhance the investor protection regime (on the regulation of sponsors and independent financial advisers, and on empowering the Securities and Futures Commission to take derivative actions for minority shareholders of a listed company);
- the introduction of the Companies (Amendment) Bill 2003 to the Legislative Council to implement some of the proposals to improve shareholder remedies as made under Phase I Corporate Governance Review; and
- the release two weeks ago of recommendations in Phase II Corporate Governance Review by the Standing Committee on Company Law Reform for public consultation.
At today's forum, Mr Frederick Ma also updated the CFOs on recent developments in the bond market in Hong Kong. Noting that public sector issuers have come to the market with long-dated issues of maturity of seven and ten years since the beginning of this year and they have been very well received, he said, "This is an important milestone for the development of our bond market, helping to provide a complete benchmark yield curve for non-Exchange Fund papers."