SUGGESTIONS the Securities and Futures Commission might be going too far in its rigorous regulation of the local securities markets and their participants are misplaced.
In the past two years, stock market participants have witnessed raids on the offices and investigations into two large corporate empires - the Allied Group and Tomson Pacific. During this time leading merchant banks Standard Chartered Asia and Peregrine have found themselves on the wrong end of disciplinary proceedings by the SFC. There has also been a spate of prosecutions for misdemeanours, including promotion of unauthorised investment products and acting in investment activities without registration.
Since the formation of the current securities regulation framework, led by professionals in the SFC and the Stock Exchange, the local stock market has experienced unprecedented growth and international investor interest. It is a myth to suggest regulation stifles securities growth. The United Kingdom and the United States have some of the largest stock markets in the world, yet they are the most regulated. Hong Kong needs regulations that ensure free and fair markets. Sufficient disclosure combined with effective policing of practitioner activity will help ensure international investors remain comfortable about investing here and local retail investors have some protection against malpractices of local professionals.