THE stock exchange - like any corporation or government - has its fair share of vested interests, power blocs and factions. The belief that the imprisonment of former exchange chairman Ronald Li Fook-shiu single-handedly transformed the exchange from a gentleman's club into an audited company is an illusion. Just 12 months ago, during the stock exchange council elections, the cracks in the broking community were exposed. What was supposed to be a secret ballot turned into a public farce. Candidates wooed voters with long, paid-for lunches or invitations to lavish social events. A list of favoured candidates backed by one faction appeared and was distributed to voting members. Almost immediately, a second list appeared with a different set of candidates backed by a rival faction. It was made clear to certain members which candidate they should support. On polling day, exchange chief executive Paul Chow Man-yiu intervened in the sealed-off voting area to remove brokers distributing lists inside the venue, in contravention of the exchange's articles of association. Complaints - mainly from the losers - poured in, and the exchange was forced to say it would undertake a review of the election processes before this year's elections. In three weeks' time, those elections will take place. The electoral system remains unchanged. Once the brouhaha died down and angry voters had been mollified, no action was taken. Exchange representatives have said they are confident the systems are in place to ensure the election is both true and fair. But the system is exactly the same as it was 12 months ago - and it did not work then. The exchange council is supposed to poll the views of the brokers and give their opinions an airing to the powers that be. Unfortunately, it is only representing the views of those brokers that belong to the faction that elected it. In Hong Kong, small brokers are under threat. Their numbers are falling while institutions are accounting for ever-increasing turnover. Factionalism will only make their position weaker. The market cannot afford this luxury. Local brokers provide the liquidity institutions can ill afford to lose. Without the hordes of local brokers churning out retail business, institutions cannot open or close positions with any surety. Unfortunately, the scene is set for a repeat performance of last year's comedy of errors. The system is the same, so are the issues and most of the voters. If brokers want adequate representation from their council, they are going to have to forego the free dinners, social favours and less-than-subtle tactics of persuasion. Anything less and they are simply speeding their own demise.