LCQ14: Expert Group to Review the Operation of the Securities and Futures Market Regulatory

Press Release

LCQ14: Expert Group to Review the Operation of the Securities and Futures Market Regulatory Structure

Wednesday, July 9, 200

Following is a question by the Hon Henry Wu and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (July 9):

Question:

Following the submission of its report in March this year, the Expert Group to Review the Operation of the Securities and Futures Market Regulatory Structure (the Expert Group) appointed by the Financial Secretary (FS) in October last year was disbanded. In this connection, will the Government inform this Council of:

(a) the total number of meetings held by the Expert Group and details of each meeting, including the date of meeting, starting and ending time, attendance list and items discussed, and whether the minutes of the meetings will be made public; if not, the reasons for that;

(b) the details of each of the meetings (including informal ones) between the Expert Group and FS or other Government officials, including the date, starting and ending time, attendance list and items discussed, and whether the records of such meetings will be made public; if not, the reasons for that; and

(c) the details of the direct and indirect expenditure involving the Expert Group, including the public expenditure on air tickets, food and accommodation, the indirect costs calculated on the basis of man-hours and remuneration of each supporting staff who worked for the Expert Group, and the additional rental and sundry expenses?

Reply:

Madam President,

(a) The Expert Group to Review the Operation of the Securities and Futures Market Regulatory Structure (the Expert Group) stated in its report that the Expert Group had arranged to hold working meetings in Hong Kong at least once every month from October 2002 to March 2003. Between the meetings, members were supported by a full-time secretariat and communicated extensively through e-mail and telephone conferencing. In total the Expert Group had six rounds of working meetings in Hong Kong each lasting between two to six days. In addition, the Expert Group had meetings with 33 interested groups and individuals, and a further 65 individual interviews to gather information and views.

The Expert Group has made it clear in the report that its observations and conclusions represented a distillation of the views expressed and that it had not attributed specific opinions or proposals except in cases where the respondent has approved its doing so. As such, we consider that it would not be appropriate to disclose the meeting records of the Expert Group.

(b) The Administration has made a submission to the Expert Group, a copy of which has been supplied to the Panel on Financial Affairs of the Legislative Council at the latter's request in June. The Expert Group also met with the Financial Secretary (FS) and the Secretary for Financial Services and the Treasury in exploring the submission further and has kept FS informed of its work progress from time to time. These meetings are just routine updating of the work undertaken by the Expert Group to keep FS in view of the progress.

(c) The total expenditure incurred for conducting the review by the Expert Group is about $3.15 million, including honorarium, air tickets, food and accommodation for the Chairman and Members of the Expert Group, the operating cost of the supporting secretariat and other administration expenses such as printing costs and sundry expenses. No rental expenditure was incurred as the secretariat of the Expert Group was provided with Government accommodation.