The days when Hong Kong could be relied upon to craft straight-forward solutions seem to be disappearing fast.
Few people would argue against plans to give small investors greater protection against crooked brokers. Thus, the proposal to extend the central stock market clearing system to the general public looks benign.
Since its introduction in 1992, the Central Clearing and Settlement System (CCASS) has been a big success.
While the London Stock Exchange laboured and failed with Taurus, Hong Kong had a functioning electronic share transfer system facilitating an explosion of market turnover impossible under the old mechanism of physical certificate delivery.
Now, the plan is to let individual shareholders keep their own accounts with CCASS, allowing them to keep tabs on their brokers. Theoretically, brokers could be barred from trading unless the shareholder punches through an access code to CCASS via a touch-tone telephone. The system would protect shareholders against crooked dealers cashing in client accounts.
At first glance, the consultation paper empowers shareholders, guaranteeing speedier access to information. Indeed the Consumer Council, which is studying the proposal, says, in principle, it is impressed.