Imagine the incalculable damage to Hong Kong's reputation if the handover produced a financial panic with huge financial defaults. The prospect might seem remote, but the Securities and Futures Commission is taking no chances. The territory's futures market already operates one of the world's most conservative margining systems. Moves to make it even safer during the handover seem sensible enough. No one will forget what happened the last time Hong Kong closed for such a period in 1987. Investors must post 50 per cent more margin following a mark-to-market exercise after the market closes on Friday, June 27. In effect, every open futures and option position will cost more to fund. The idea is that should some catastrophic movement take place the clearing houses will hold a larger amount of collateral against the exposure. The possibility of 1987 style defaults should be greatly reduced. In truth such a meltdown is highly unlikely - today's clearing systems are infinitely improved on a decade ago. Yet with a keenly awaited meeting of the US Federal Reserve on the Tuesday a huge amount of market moving information will potentially have been absorbed by the time the market opens on Thursday. Perhaps the markets should have been left open to deal with such eventualities. But at least better safe than sorry.