The stock exchange is seeking to streamline its structure in an attempt to reduce conflict with its stockbroker members and the Securities and Futures Commission (SFC), according to chairman Lee Hon-chiu. In the stock exchange's annual report released yesterday, Mr Lee said the regulator would alter the existing regulations and hoped to work with the SFC to eliminate duplication in regulating members. Mr Lee expressed concern over 'potential conflict' between the stock exchange's regulatory and commercial roles. This arises because of the present structure whereby the stock exchange is owned by about 500 stockbrokers who are regulated by the stock exchange. This possible conflict was referred to recently by former SFC chairman Anthony Neoh, who described the stock exchange as 'a private club for stockbrokers'. In the report, Mr Lee said the exchange would continue to find ways to manage the potential conflict between its regulatory and commercial roles 'effectively'. He said the exchange had set up an executive structure to segregate its business-promotion activities from its regulatory functions. The buoyant stock market last year was reflected in its accounts. Its share of the transaction levy rose almost 30 per cent to $447.8 million in the year to June 30. The levy made up almost 39 per cent of the stock exchange's $1.15 billion turnover. Most of the transactions were conducted on an off-floor basis or in terminals of brokerages, meaning floor-trading activities continued to shrink. Off-floor trading generated 65 per cent of total turnover in the year to June 30. Last year's market also prompted 55 companies to launch initial public offerings, raising almost $55 billion. H shares accounted for almost one quarter of the $55 billion raised. Operating expenses grew about 11 per cent to $557.06 million, with staff costs virtually unchanged. Chief executive Alec Tsui Yiu-wa received $6.36 million in emoluments. Separately, two outspoken stock-exchange council members are seeking re-election at the exchange's upcoming annual meeting. Syed Bokhary and Choi Chen Po-sum have joined five other candidates scrambling for two vacancies in the smaller-brokers' group - constituency C. They will face competition from Irene So Wai-yin, who lost narrowly in elections in the past few years. Ms So is managing director of Mansion House Securities. Other candidates include On Wah United Securities dealing director David Cho Wing-yiu, Audrey Chow Securities dealing director Audrey Chow Pei-fung, China Everbright Securities (HK) deputy managing director Eugene Lee Kwong-shing and National Resources Securities chairman William Wan Hon-cheung. In the larger-brokers' group, constituency A, former council vice-chairman Fung Chi-kin is jockeying with two other candidates for two seats.