A senior Securities and Futures Commission official says the Jardine Fleming scandal will strengthen Hong Kong's image as a well-regulated investment centre. Laura Cha, the regulator's executive director, dismissed suggestions the recent disciplining of the territory's flagship fund-management group had caused long-term damage to Hong Kong's image. 'I would like to state definitively that this is not the case. On the contrary, it has sent the strongest possible signal to the international community, investors in Hong Kong and our fellow regulators, that we are determined to take action in the case of malpractice. 'In this case, the misconduct was investigated and disciplined in Hong Kong.' Ms Cha, who was speaking at an Asian fund management conference in Singapore, said: 'We are already an internationally recognised investment management centre, with a flexible, pragmatic and fair regulatory framework. 'We have the infrastructure in place to support the management of international portfolios and we have a rapidly expanding domestic market with no restrictions on foreign investment. 'But we recognise that we cannot afford to be complacent.' In the past decade, the number of funds under management in Hong Kong had risen about 700 per cent to nearly 1,200 unit trusts and mutual funds, she said. It was the regional base for about 100 international financial institutions and their subsidiaries, and home to about 600 licensed investment advisers. She said the territory's status as the leading Asian fund-management centre outside Japan would be bolstered by the US$4 billion expected to be generated each year from the compulsory contributions to the Mandatory Provident Fund and the development of a fund-management industry in China. 'This [development in China] is not yet an opportunity that we can, as yet, fully define, but we know that it is there. Our soon-to-be sovereign is on a remarkably steep learning curve in the development of its own financial markets. 'It is my belief that the pace and extent of that growth has surprised even experienced China-watchers. 'So, although it is not yet clear how the investment fund industry will develop, we know that China has moved from a planned economy that lacked even the concept of a joint-stock company, to developing stock, bond and futures markets, regulatory systems and the legal framework that necessarily accompanies these, in a few very short years.'