Plan to split SFC post faces rough ride in Legco
The government's proposal to split the top post at the Securities and Futures Commission ignited a heated debate at the financial affairs panel yesterday with some legislators vowing to continue their fight against the plan in the Legislative Council.
Financial Services and Treasury Secretary Frederick Ma Si-hang came under fierce attack, mainly from pro-democracy legislators, before the panel finally backed the proposal nine votes to six.
It was the third time in four months Mr Ma argued the case to split the top job at the watchdog into a chief executive's and a non-executive chairman's posts.
Lawmakers opposing the plan said a government-appointed chairman would lack public accountability as well as cast doubt on the watchdog's independence.
Democrat Sin Chung-kai told Mr Ma his party would vote against the proposal when it was formally tabled in the council.
Mr Ma said he regretted the party's opposition and urged legislators not to prejudge any appointment to replace current SFC chairman Andrew Sheng when his contract expires in September.
Frontier legislator Emily Lau Wai-hing said the proposed change could tarnish the watchdog's reputation.
She cited controversies that erupted after several appointments to other public agencies, such as the Equal Opportunities Commission (EOC), and pointed out that these appointments had sparked charges that the agencies had lost their independence.
'I believe many people will be scared away by the idea of government-appointed officials after what happened at the EOC. [SFC chairman] is a very important position and we need to be careful [considering] how easy the SFC's reputation can be tarnished if the wrong candidate is appointed,' Ms Lau said.
Mr Ma insisted that candidates would have to meet stringent criteria and assured panel members there would be a 'transparent and fair' selection process that would include suggestions from the public and legislators.
Ms Lau, however, said there was a contradiction in Mr Ma's approach. On the one hand the chairman would be banned from having close relationships with listed companies, but on the other hand he would have to be knowledgeable about the industry and have a solid reputation in local financial circles, she said.
'You said the candidate has to meet all these requirements, which means most likely he has to come from outside the business community,' she said. 'Yet at the same time you want him to know something about the market and to take only a small, symbolic salary.
'With this system, how do you expect to find a person who has the ability to defend the independence of the SFC?'
Responding to concerns of possible conflicts of interest in SFC investigations, Mr Ma said a firewall would be built between the chairman and the chief executive.
Legislators also questioned the government's timetable.
With Mr Sheng departing in about six months, a replacement would have to be hired before the post could be split, they said.