Kwong ahead of Tsui in race to lead HKEC
Secretary for Information Technology and Broadcasting Kwong Ki-chi will probably be the first chief executive of Hong Kong Exchange and Clearing (HKEC), according to sources on the selection committee of the merged exchange.
The committee, consisting mainly of the seven-member board of the HKEC, headed by chairman Charles Lee Yeh-kwong, has recommended Mr Kwong for the job, the sources said.
It has also recommended that stock exchange chief executive Alec Tsui Yiu-wa be appointed chief operating officer, they said.
Mr Tsui had applied for the chief executive post, according to the sources.
The Securities and Futures Commission (SFC) has to approve the recommendations from the selection committee before the HKEC can appoint Mr Kwong and Mr Tsui to the posts.
In addition to the SFC's go-ahead, Mr Kwong will also need approval from Chief Executive Tung Chee-hwa to leave the Government.
If Mr Kwong is named chief executive, brokers expect him to be paid an annual salary of about $8 million, up from his present salary of about $2 million.
Some brokers, according to Legislator for Financial Services Sector Fung Chi-kin, said they were surprised by the selection committee's choice of Mr Kwong, because of his lack of experience in the stock and futures markets.
Mr Kwong joined the Government in 1972 and took up his present post in April last year.
The Information Technology and Broadcasting Bureau was set up at that time to oversee the Government's information technology (IT) and broadcasting policies and to help Hong Kong become a high-technology centre.
The sources said the that selection committee was especially keen on Mr Kwong because of his IT expertise.
'The new exchange will need to upgrade its trading systems to compete with overseas counterparts,' one source said.
'It is a must for the chief executive of the new exchange to have knowledge of information technology, to ensure Hong Kong has the most advanced trading and clearing systems in the world.' Some brokers said they were worried Mr Kwong could give the Government too much influence at the HKEC, which will be set up early next year by merging the stock and futures exchange and their three clearing houses.
But the selection committee apparently did not believe this was an issue.
In fact, one of the reasons behind Mr Kwong's selection was the view he would strengthen the HKEC's contacts with government officials and legislators, the sources said.
The committee also hoped Mr Kwong's overseas contacts would help the HKEC build alliances with other stock exchanges, they said.
In addition to Mr Kwong and Mr Tsui, one other SAR candidate and four overseas candidates made the short list for the chief executive position, they said.
The four overseas candidates were senior executives at stock exchanges in Chicago, San Francisco, London and Vancouver.
Those candidates did not have enough knowledge about Hong Kong or the mainland, according to the sources.
The selection committee viewed Mr Tsui, who has worked at the stock exchange and the SFC for nearly 10 years, as an excellent deputy to Mr Kwong, noting he was widely respected for his knowledge of the local markets, the sources said.
It is not clear how many people applied for the chief operating officer position.
The committee did not make its recommendations under any pressure from the Government, according to the sources.
Secretary for Financial Services Rafael Hui Si-yan, who is a member of the selection committee, was not involved in the interview of Mr Kwong, to avoid a conflict of interest, they said.
Hong Kong Stockbrokers Association chairman Paul Fan Chor-ho said he supported the committee's recommendation.
'Technology development is the key issue to the growth of the HKEC,' Mr Fan said.
'We would like to see someone with technological expertise heading the new exchange.'