Press Release
Business model and public policy framework
for new company under merger
Thursday, July 8, 1999
The Government today (Thursday) published a paper setting out the business model and the public policy framework for the new holding company, now known as the Hong Kong Exchanges and Clearing Limited (HKEC). This is in pursuance of the market structure reform announced by the Financial Secretary in March, under which the two Exchanges and the three associated Clearing Houses in Hong Kong will be merged.
At a briefing today for members of the Council and Boards of the Exchanges and Clearing Houses, the Acting Financial Secretary, Mr Rafael Hui, said, "Over the last few months, the Government and the Securities and Futures Commission have been working closely with the leadership of the Exchanges and Hongkong Clearing as well as members and leaders of the securities and futures industry on the proposed reform. We have benefited from their invaluable contribution to the process, in particular from members of the Co-ordinating Committee on Market Structure Reform."
Referring to the newly published paper, Mr. Hui said, "The paper summarises the result of the process. It outlines a business model which HKEC may adopt in pursuit of its vision and objectives as a successful corporation. It also sets out the public policy framework for the new company in order to ensure that its essential public functions are carried out."
"We believe that the paper provides an important basis for the further and final negotiations between the two Exchanges through their Financial Advisers and enables the process to come to timely conclusion," he added.
The aim of the market reform is to enhance the market's competitiveness so as to meet the challenge of an increasingly globalised market place driven by advancement of technology and the emergence of a growing population of sophisticated investors.
The reform includes fundamental changes in the market structure to be achieved through the demutualisation and merger of the Stock Exchange of Hong Kong (SEHK), the Hong Kong Futures Exchange (HKFE), the Hong Kong Securities Clearing Company (HKSCC), the SEHK Options Clearing House (SEOCH) and the HKEF Clearing Corporation (HKCC) into a single holding company now known as the HKEC.
At the briefing, Mr Hui assured members of the Co