OpinionRegulators should enhance transparency themselves
The public has been left in the dark after closing auction chaos of 2009 saw HSBC shares plunge
The city's regulators have always attempted to set themselves up as corporate role models. The Securities and Futures Commission and Hong Kong Exchanges and Clearing both issue quarterly financial reports to increase transparency and release regular updates about their enforcement efforts.
However, there appear to be mysterious gaps in these efforts.
Top of the list is the result of the investigation into the closing auction chaos on the stock exchange in March 9, 2009.
The HKEx suspended the 10-minute closing auctions that day after selling pressure reached a fever pitch. One transaction in the auction's final seconds sent HSBC down to HK$33, a drop of 12.47 per cent during the 10-minute auction period and down 24.14 per cent for the day.
That was the worst decline in almost 20 years. Given HSBC is widely held by Hong Kong investors, the decline was a big upset and raised questions about the exchange's trading infrastructure. The exchange has since then reverted to the old way of calculating the market's price by using the traditional median price from the final five transactions of stocks.
More than three years on, neither the SFC or the stock exchange have mentioned how the investigation is progressing, including how such a big swing in HSBC occurred and who was behind it. Do investors care? They certainly do.