The Government has rejected a suggestion it set up a separate supervisory committee to oversee the work of the Securities and Futures Commission (SFC). In a paper submitted by the Government to legislators for today's Legco financial affairs panel meeting, the Government addresses a range of suggestions made by market players and academics in meetings with legislators last month. The Government emphasised the SFC had an equal number of executive and non-executive directors, ensuring balance in policy making. 'The work of SFC is clearly governed by the law, and persons under its regulation may appeal to the Appeals Panel and seek judicial review against the decisions made by the SFC,' the Financial Services Bureau said in the paper. 'We are therefore of the view that adequate checks and balances are in place and that it is not necessary to establish a separate supervisory committee.' The Government also rejected claims the strict implementation of T+2 would undermine long-term investors' interest in the local market, saying 99 per cent of transactions had been settled on time since the edict came into effect on September 24. 'During the same period, trading has been more active than the preceding months and there is no obvious evidence to support trading activities have been dampened due to the strict enforcement of the T+2 rule,' the Government said. The Government also rejected a proposal for stock exchange members to disclose transaction volume, saying it would adversely affect the operation of stock brokers and was inappropriate and inconsistent with international practices. The Government said the stock exchange and the SFC were working on a memorandum of understanding to avoid duplication.
