The SFC also sets licensing standards to ensure all practitioners are fit to operate, approves licences and maintains a public register of licensees. In addition, the SFC sets standards for the authorisation and operation of investment products and their promotion and handles misconduct complaints against licensed operators.

In a keynote address to the Asia-Pacific In-House Council Summit, SFC chairman Andrew Sheng said information was a market essential.

'By and large, small investors cannot control or influence the management of a company they invest in, but they should be entitled to accurate, complete and timely information to judge whether to invest or divest in a particular company. Such disclosure allows public accountability,' he said.

The SFC is increasingly focusing on campaigns to help the public develop a better understanding of how the investment industry works, how to avoid pitfalls and to protect their investments. A new Cantonese television drama series jointly produced by the SFC and RTHK has been launched to help investors learn more about investing in stocks.

Three investors were recently given the Smart Investor Award for reporting suspected boiler room scams to the SFC. Recipients of the awards each received an SFC corporate watch and a certificate of recognition.

Boiler room refers to a group of professional-sounding salespeople who cold-call by telephone and use high-pressure sales tactics to urge potential investors to buy stocks they recommend. Cold-calling with the aim to sell stocks and shares is illegal in Hong Kong.

As a result of their reports, the names of four dubious operators have been posted on the Alert List of unlicensed overseas companies and suspected scam websites on the SFC's website. All three investors had been cold-called by suspect fraudsters.

In one case, the investor was approached by a company that claimed to operate from Malaysia. The caller claimed that overseas stock had already been bought and asked for $48,000 to be paid immediately. Peter Au-Yang Cheong Yan, the SFC's executive director and chief operating officer, said tricksters undermined the credibility of the financial markets. Investors could assist in regulatory action to remove such fraud.

The SFC believes that to tackle these scams, investors' self-protection is the best and first line of defence. Investors should remain vigilant.

The SFC also created two fake scam websites to demonstrate the pitfalls of scams. When investors click to contact the fake companies, educational tips pop up to remind the public how to protect themselves against fraudsters.

Last year, $2.95 trillion of overseas and local money was invested in the fund management business. Alexa Lam, the SFC's executive director of intermediaries and investment products, said the fund management business had generally benefited from market appreciation and renewed interest in investing in financial products.

'The substantial investments in the Asian markets reflect not only the attractiveness of these markets but also the expertise that the fund management industry in Hong Kong has developed over the years in investing in Asia. Such skills have been and will continue to be vital to Hong Kong's ability to attract overseas funds for management,' Mrs Lam said.

The SFC is aware of the rapid developments in the fund management industry and is committed to working closely with industry participants to help regulate and facilitate the continuous growth of the industry. At the same time, the group believes it is equally important to keep the public abreast of the changes and developments in the investment arena.

The findings of a Financial Sector Assessment Programme, a joint International Monetary Fund and World Bank effort established in 1999, concluded last year that Hong Kong's financial system is robust, fundamentally sound and overseen by a comprehensive supervisory regime.

As Hong Kong's insurance industry continues to grow, the Office of the Commissioner of Insurance (OCI) continues to regulate the industry and encourage the upgrading of professional skills. According to the latest audited returns filed by insurers, total gross premiums grew by 16.6 per cent over the previous year to $89 billion, 7.1 per cent of Hong Kong's gross domestic product. As at June 30 this year, there were 183 authorised insurers in Hong Kong, of which 119 were pure general insurers, 45 long-term insurers and the remaining 19 composite insurers.

Richard Yuen Ming-fai, Commissioner of Insurance, said the OCI, in addition to being a prudent regulator, was a market enabler committed to facilitating the healthy development of the industry with regulatory controls that would better protect the insuring public but at the same time not unduly burden market players.

He said the OCI would continue to refine the insurance regulatory system with a view to enhancing Hong Kong's position as a major international insurance centre.

'Amid the increasing globalisation and financial services convergence, we shall strengthen our co-operation with other regulators on cross-sector issues, both local and overseas, to strengthen protection of the insuring public,' he said.

The OCI is in the process of reviewing its institutional set-up, examining the supervisory framework for long-term business assets and exploring the feasibility of establishing policyholders' protection funds.

Canada, France, Ireland, Japan, South Korea, Norway, Poland, Britain and the US operate protection funds to cover claims in the event of a company being unable to meet its obligations.

The primary objective of policyholder protection funds is to protect the interest of policyholders - especially individual or non-professional - in the event of bankruptcy of an insurance company. The fund is expected to serve as the final safety net for policyholders, when, in spite of all possible supervisory measures, bankruptcy occurs.

'We shall keep track of dynamic market developments and do our best to maintain an open, transparent and business-friendly environment. The OCI will continue to maintain close liaison with the insurance industry and facilitate market development in Hong Kong,' Mr Yuen said.

He said the signing of the Closer Economic Partnership Arrangement had enabled Hong Kong financial service suppliers to gain access to the fledgling mainland market.on the alert

The public is urged to report suspected boiler room scams and suspicious websites for consideration of awards.

Investments that sound too good to be true usually are.

Never invest in anything for which you have to sign a secrecy agreement.

Be careful of being asked to pay money up-front; and always check out who you are dealing with.

Reputable brokers and investment banks do not call people who are not their clients to offer investment opportunities.

Cold-calling with the aim of selling stocks is a crime in places like Hong Kong.