IS the stock exchange run as a private club? The International Securities Consultancy (ISC), chaired by a former chief executive of the stock exchange and the Hong Kong Institute of Company Secretaries, think so. With all the hype about corporate governance of listed companies, it may be time to assess how the stock exchange, an unlisted company with limited membership, applies the rules to govern itself. The public had a glimpse of what goes on in the row over share spreads that led to the calling of an extraordinary general meeting. It exposed how the numerically superior small brokers can easily overturn decisions which are not made in their favour. Investors also witnessed the fracas over the election of council members in October. The subsequent war of words revealed loopholes in the election system. Together with the exchange's four-year project on stock options, which will finally be implemented next year, it is difficult not to question the efficiency of the exchange in keeping pace with the rapidly moving financial market. It appears that motivation to improve the market is lacking because members, most of them small brokers, would not benefit from such schemes. It is hard not to ask what mechanism is in place at the exchange to ensure that public interest will prevail over members' benefits. Nobody seems to be in a position to critically evaluate the work of the stock exchange, given all the imperfections unveiled in the past few months. Soon the ISC will have its case heard by the Consumer Council. Whatever the outcome, the consultancy has sparked a much-needed debate that points straight to the issue of corporate governance at the exchange. It would be better to start the critical evaluation now. The competitive market environment does not allow time to be wasted. If there is delay, the market will be lost to other exchanges who are eager to snap up some of the Hong Kong business.