Sheng fires parting shot over curbing of watchdog's powers

Outgoing SFC chairman dismisses calls for more scrutiny before being allowed to impose fines on listing rule violators

The Securities and Futures Commission would rather surrender any new powers to fine listing violators than face scrutiny of the penalties, outgoing chairman Andrew Sheng said yesterday.

In his farewell media briefing, Mr Sheng said he would urge the government to accept a decision arrived at by the 15-member SFC advisory committee on Monday that establishing a body to first review the watchdog's decisions as a condition for new fining powers was an unacceptable trade-off.

'The SFC already faces a lot of checks and balances such as the Process Review Panel, the appeals tribunal and judicial reviews. It is not necessary to add more scrutiny,' said Mr Sheng, who steps down at the end of the month.

'If the SFC needs to face more scrutiny in exchange for the new fining power, the commission would prefer to give it up and let the Market Misconduct Tribunal (MMT) alone impose fines on offenders breaching the listing rules.'

The South China Morning Post reported on Monday that the SFC would be able to impose fines up to a certain limit if an internal review body comprising SFC executives and market practitioners is in place to consider its findings. The proposal is seen as a way to help allay the fears of critics who charge that the SFC's fining powers will allow it to be 'judge, jury and executioner'.

The MMT, set up under the new Securities and Futures Ordinance and enacted in April 2003, is chaired by a judge and two independent members.