Futures exchange job goes to Wong
NATIONAL Westminster Bank's managing director for Regional Treasury-Asia Pacific, Frank Wong Kwong-shing, was yesterday elected chairman of the Hong Kong Futures Exchange.
He took over the post from Leong Ka-chai, who has been chairman for three years, in one of the most controversial futures exchange elections in recent years.
The exchange declined to reveal how many votes Mr Wong won in comparison to his opponent, Sun Hung Kai Securities director Chan Sun-sun.
The 12 directors voted in a secret ballot.
Ballots have been unnecessary in recent years because there has usually been only one candidate.
The poll drew extra attention following rumours that Mr Wong was backed by the Securities and Futures Commission (SFC) and its chairman, Anthony Neoh.
Mr Wong, who had been widely tipped to win the post, said yesterday it was time for the rumours to pass away.
The chairman's maximum term is three years, and the election has been regarded as crucial because the new chairman is likely to be in office for the 1997 handover.
Mr Wong said strengthening the exchange's relationship with China was an important theme in his strategic paper expected to be completed in October.
'Mr Leong will continue to keep the close contact with China and we will continue the training of personnel of the CSRC [China Securities Regulatory Commission] especially on risk management,' he said.
Mr Wong appointed new chairmen for the committees under the board yesterday and Mr Leong took over the chairmanship of the China affairs committee from Mr Chan.
Mr Chan was not appointed chairman of any committee.
Mr Wong, who was chairman of the new product committee, said the preparation for the one-day rolling currency futures to be put on the market in two to three months had almost finished.
'We are finalising the consultative paper and we will hand it to the SFC for approval,' he said.
'The next step will be specifying how firms can meet the product requirements internally.' He said the exchange would increase the number of market-makers to between five and eight.
Mr Wong was confident that the currency contracts were attractive to domestic customers because the trading time was much longer than the foreign exchange contracts operated by banks.
'Banks close at six o'clock and we trade until 3 am after the New York close,' he said.
The transparency of the operation and the small size of transactions allowed the product to compete with the foreign exchange contracts being operated by banks, he said.
Mr Wong agreed that the high margin required for stock futures led to a low turnover.
'The margin is too high even in a conservative risk management standpoint,' he said.
Futures exchange chief executive Ivers Riley agreed that the futures and stock exchanges would eventually introduce a cross-margining of their products.
Mr Wong said the futures exchange would consider the introduction of debt futures provided the liquidity and the issues for the government notes were sufficient.