Concern by the stock exchange that its monopoly status could be under threat may well prompt it to forge ahead with proposals to launch a second board, despite weak market sentiment. Sources said the exchange's ruling council was likely to discuss the introduction of a second board at a meeting next week. Members would support funding of up to $200 million for the new market, the sources believed. The stock exchange has already consulted the market on a second board, which would have lower capital requirements for listing than the main board, allowing small- and medium-sized firms to raise funds. However, Federation of Hong Kong Industries chairman Henry Tang Ying-yen, who is an Executive Councillor, has strongly criticised the tough requirements proposed by the exchange. Earlier this month, he also asked whether the second board should be managed by the stock exchange or another, independent, body. Exchange chairman Lee Hon-chiu said it would be more cost effective for the exchange, rather than another body, to launch the second board. An exchange council member said the exchange would insist it had the right to launch the second board, since it had monopoly status as Hong Kong's only securities-trading exchange. 'There is no argument that the exchange is the only organisation with the right to introduce the second-board market,' the council member said. Introduction of the second board should not be delayed by weak market sentiment, he said. 'The second board will help small companies raise funds for business development, which will help to boost the local economy.' The council was likely to debate whether it should allow retail investors to participate in the second-board market. The exchange proposes setting a minimum transaction size of $250,000 to discourage retail investors, because of the risks associated with firms on such a board. The council member said retail investors should be allowed to trade as long as they were aware of the risks. Hong Kong Stockbrokers' Association chairman Dannis Lee Jor-hung said the exchange should keep the cost of trading in the second board low, otherwise just a few investors and brokers would be willing to trade. China Infrastructure Group chairman Edward Chow Kwong-fai, who is also a Hong Kong Society of Accountants member, said the exchange should use the same trading system to trade second board securities as that used by the main board.