The Securities and Futures Commission (SFC) says its guidelines on internal controls are aimed at providing a general framework for other regulators and are not intended to compete with the regulators' own proposals. A recent move by the stock exchange to issue its own set of internal guidelines raised concerns it was overlapping the SFC. SFC executive director David White said the watchdog's guidelines covered different aspects of the territory's securities industry, including securities broking, futures trading and fund management. He said the exchange had accepted the principles of the SFC guidelines and would incorporate these principles into its own rules, which contained more specific details for its members. Mr White said the Hong Kong Investment Funds Association and the Hong Kong Futures Exchange also were drafting their own guidelines. He said the SFC guidelines - for which the consultation period would end later this month - were intended to foster greater awareness of the need for strict internal controls in the industry. He conceded the guidelines would create an extra burden for small brokerage firms due to staff needs. Senior SFC manager Irene Tang said the SFC would ask firms with brokerage and merchant banking operations to prevent the leakage of price-sensitive information from the merchant banking department to the dealing room.
