Brokers, directors and senior executives could face a maximum penalty of $1 million and two years' jail for giving false or misleading information to the regulator, if proposed legislation to be gazetted today comes into effect. Deputy Secretary for Financial Services Rebecca Lai Ko Wing-yee said the new law would boost market transparency and investor protection. 'This proposed legislation aims at giving a strong message to the market, that providing false or misleading information to the regulators will not be tolerated and will be punished by criminal charges,' she said. After being gazetted today, the bill - Securities and Futures Legislation (Provision of False Information) Bill 2000 - will be submitted to the Legislative Council for debate on March 15. If approved, it will be implemented in the middle of the year. Under existing law, there were no general provisions against those who gave false information to the regulators, Ms Lai said. 'This undermines the effectiveness of the regulatory functions by the SFC and the exchanges.' Similar legislation existed in Australia, the United States and Britain, she said. The proposed law was important especially after the Growth Enterprise Market's (GEM) launch last November, she said. The GEM, the SAR's hi-tech board, has looser listing requirements but tougher disclosure rules than the main board. 'The GEM is following the international trend to increase disclosure requirements as a safeguard of investor interests,' Ms Lai said. 'Under these circumstances, it is important to have the law in place to make sure the information received by the regulators is accurate.' The regulators included in the bill are the Securities and Futures Commission, the stock and futures exchanges, the clearing houses, and the new merged exchange - Hong Kong Exchanges and Clearing - which is to be set up on Monday. It would be an offence if the parties submitted information to these regulators that they know is untrue. It would not be an offence to submit misleading information caused by unintentional or careless mistakes. Under the bill, there are two types of offences - a statutory reporting offence and a general reporting offence. The statutory reporting offence refers to misleading reports given to the Securities and Futures Commission or the exchanges by parties regulated by these organisations in compulsory submissions. It will carry a maximum $1 million fine and two years' jail. The general reporting offence refers to non-compulsory information given to the regulators, such as company plans. The maximum punishment is a $500,000 fine and six months' imprisonment.