The chairman of a government-appointed expert group has hit back at critics, saying its review of Hong Kong's regulatory system will not be a 'whitewash' and can offer advice on wide-ranging issues relating to the listing of public firms. Alan Cameron, chairman of the expert group reviewing the SAR's regulatory structure, said Financial Secretary Antony Leung Kam-chung had assured the group its remit was wide enough to explore wide-ranging changes. Controversy erupted on Wednesday when Mr Cameron said his group would not review 'fundamental concepts' of the regulatory structure but look at the 'narrow scope' of listing and corporate governance matters. However, in a letter to the South China Morning Post today he says: 'If we do identify issues that are wider in scope than the specific ambit of our group, we will not hesitate to draw them to the attention of the government.' Last month's report into the July penny stock fiasco, endorsed by Chief Executive Tung Chee-hwa, recommended the gate-keeping role of the stock exchange's listing committee should be shifted to the Securities and Futures Commission. In his letter Mr Cameron says: 'The group believes that the above terms of reference are wide enough for us to consider the regulatory role of the various parties involved and to recommend changes as necessary. 'The group is acutely aware of international trends towards improved corporate governance and investor rights.' His remarks came after lawmakers and market participants criticised the government for appearing to back away from a commitment to reform key regulatory institutions. Many commentators - including the Post - have argued that the exchange should cede its front-line regulatory role for listed firms because it has a conflict of interest as a for-profit body and tends to support the interests of issuing firms over minority investors. Democratic Party economic affairs spokesman Sin Chung-kai welcomed Mr Cameron's clarification that the group would assess reform without constrained terms of reference. He said Secretary for Financial Services and the Treasury Frederick Ma Si-hang had assured Democrats yesterday of the government's intention to shake-up market regulation. Repeating Mr Cameron's line, Mr Ma told the Democrats that the expert group would not assess fundamental issues of the three-tiered system but would consider whether the listing committee role should be moved to the commission. 'The expert group should put its focus to review the regulatory role of the HKEx on listed companies. This is the core problem of the three-tiered system,' Mr Sin said. He cited the penny stock report that supported shifting the listing committee - comprising independent members who approve listing candidates and decide exchange listing policy - from the exchange to the SFC. The report came after investors dumped low-priced stocks worth HK$10.6 billion on July 26, a day after the exchange issued a consultation paper recommending compulsory de-listing for the worst performers. The report, written by accountant Gordon Kwong Chi-keung and barrister Robert Kotewall, said 'the handling of regulatory issues by both the HKEx and the SFC and the splitting of roles and functions between them not only leads to inefficiencies but also confusion.' It said: 'If a listing committee is to be retained, as most believe it ought to be, it cannot be housed under the HKEx. Within the current structure, the only entity under which it can be accommodated is the SFC.' A government source told the Post that the government has wanted to tone down the scale of the review of the three-tiered regulatory system as a result of the bad stock market conditions. The expert group is collecting public submissions until November 20 and will report to Mr Leung in March.