Some former clients have protested that the $150,000 limit is too low and does not compensate margin clients.

Mr Lee, who was speaking at a function yesterday, said there was no need to raise the level of compensation.

'The $150,000 individual compensation limit allows close to 80 per cent of CA Pacific's former clients to get full repayment,' he said. 'I think it is not bad.' He said it had not been decided whether clients of collapsed brokers Forluxe Securities and Chark Fung Securities would receive the same offer.

Mr Lee said the exchange and the SFC had worked together to monitor the financial situation of all brokers, and concluded no firms appeared to have problems.

However, he could not rule out the possibility of fraud which could hide potential problems.

Meanwhile, Mr Lee responded to comments that the proposed second board should be for high-technology companies only, saying it should accommodate all kinds of venture-capital and small companies.

The stock exchange is consulting the market on the launch of the second board, which would have a lower listing requirement than the main board to enable small and medium-sized companies to raise funds.

Mr Lee also disagreed with suggestions that the second board should be regulated by an independent body rather than the exchange.

'I think it would be much more cost effective for the stock exchange to manage the second board,' he said.

Last month, the stock exchange revealed an ambitious strategy plan aimed at trebling market capitalisation to $6 trillion in the next five years.

Mr Lee said Japanese economic reform was the key factor determining local market trends and whether the exchange would achieve its target market capitalisation.