Hong Kong Monetary Authority deputy chief executive Andrew Sheng Len-tao is understood to have decided to run for the chairmanship of the Securities and Futures Commission (SFC), reversing an earlier decision to stay at the authority. Reasons for Mr Sheng's about-turn are unknown, although it is widely accepted the Government is keen to find a suitable local candidate rather than internationalise the appointment. Mr Sheng - who immediately becomes a front runner for the position - initially rebuffed efforts to put his name forward. He yesterday declined to comment on whether he would accept the offer or even whether he was considering it, a marked change from his earlier emphatic denials. The Government has launched an international search to find a suitable candidate to replace SFC chairman Anthony Neoh, who will retire on June 30. The selection panel is chaired by Financial Secretary Donald Tsang Yam-kuen and has five other members. Initial results of the search unveiled no local candidates and turned up just five international candidates. A source close to the Government said Mr Sheng was regarded by the panel as the most suitable candidate due to his experience and Chinese background. Sources said the Government had aggressively lobbied Mr Sheng to change his mind and indicated these efforts contributed largely to his decision to change his mind. The sources said one of Mr Sheng's chief concerns about the job was that the SFC lacked the necessary enforcement powers, as demonstrated by the collapse of Peregrine Investments Holdings and CA Pacific. In the CA Pacific case, the SFC had no power to regulate margin finance companies operated by brokers, while in the Peregrine case, the company's loan exposure to Indonesia had not been disclosed in a timely manner, the source said. However, proposed moves suggested by the Government's Financial Market Review last week are likely to widen the SFC's enforcement powers and are thought to have helped sway Mr Sheng in favour of the job. The report has paved the way for the SFC to regulate margin finance companies as well as proposing to change listing rules to ensure companies disclose their exposure to emerging markets and detail their existing loan agreements. It also suggested giving statutory backing to listing rules, a move widely interpreted as increasing the commission's bite rather than its bark. Mr Sheng, 52, joined the HKMA as deputy chief executive in October 1993 and is in charge of reserves management and information technology. He spent 13 years at Bank Negara - Malaysia's central bank - and was later seconded to the World Bank in Washington before joining the HKMA. During his four years at the World Bank, he advised on financial-sector reforms in a number of developing countries, including the mainland. Mr Sheng is a Malaysian Chinese and received his first-class honours degree in economics from the University of Bristol, England, in 1969. He was awarded a fellowship at the Institute of Chartered Accountants, England and Wales, in 1982. If appointed, he can expect a salary of at least $5.6 million - Mr Neoh's existing salary - in line with his existing remuneration at the HKMA.