The Securities and Futures Commission is setting up a think-tank to study regulatory issues arising from a 'potential explosion' of on-line trading.
'The signal's gone up,' executive director Mark Dickens said yesterday.
'We know something very important is coming. We know, and are getting ready for it.' An on-line trading working group is being established to examine issues such as the impact on the back office, system capacity and steps that need to be taken to ensure a successful order.
A guidance note outlining the SFC's policy on Internet trades released in March last year is 'already under review', Mr Dickens said at a Freshfields legal seminar, as it 'doesn't deal adequately with all the issues'.
James Wood, a Freshfields' solicitor, further identified key legal issues as confidentiality and integrity of communications over the Internet with regard to trades.
On-line trading has yet to take off in Hong Kong, with only 35 financial service firms applying to the SFC to use the Internet - not all of them brokerages.