THE United Democrats have called for the closing of a loophole that allows people to use privileged political information to make money on the stock market.
The Secretary for Financial Services, Michael Cartland, said information about issues such as the Sino-British talks on Hongkong political reform did not come within the scope of ''insider dealing'' as defined in the Securities (Insider Dealing) Ordinance 1990.
He said: ''Under the provisions of the Securities (Insider Dealing) Ordinance 1990, the prohibitions relating to insider dealing apply to securities only and cover only relevant non-public information which is price-sensitive to a particular issuing company, but not information which is price sensitive across the entire market.'' His remarks were made in reply to a question from the United Democrats spokesman on financial and monetary affairs, Huang Chen-ya.
Dr Huang asked the Government whether it had examined the sharp movements in the stock market which preceded important announcements about the talks on the 1994-95 electoral arrangements.
He said the stock and futures markets had registered record gains and losses, usually shortly before announcements concerning constitutional reforms were made.
In particular, the Hang Seng Index rose sharply on April 13 this year, just before the announcement of the Sino-British talks on political development.
