The stock exchange has suggested that proposed regulations designed to crack down on margin finance companies run by stockbrokers following a spate of broking collapses, be toned down.
In its submission to the Financial Services Bureau on the proposed regulations, the exchange said some of the requirements were too stringent for its members.
Margin finance companies have been responsible for the collapse of some local brokerages and attention has focused on the fact they are not regulated by the Securities and Futures Commission (SFC) or the stock exchange, opening the door to potential abuse.
It has been proposed the law be changed to allow the SFC to regulate margin companies and strict capital adequacy rules be introduced.
One source said the stock exchange had called for the Government to adopt a flexible approach to implementing a 10 per cent ceiling on lending to a single client or on a single stock.
The exchange has also called for more flexibility on proposals to set limits on the liquid capital held by margin finance companies.