SIR Hamish stressed the importance of a top-notch regulatory environment for the territory's financial markets, calling for a review of the Companies Ordinance. He said improvements in the integrity of Hong Kong's markets had been a pre-condition for the expansion they have experienced in recent years. ''To a large degree, their impressive performance is a reward for our past determination to reach the very highest standards in the supervision of our financial markets,'' he said. ''But this is a never-ending task if we are to stay in the first rank of international markets. Regulators must keep pace with innovations to avoid compromising either the growth or the integrity of our markets.'' Sir Hamish said the Government had attempted to respond to developments within the corporate world through piecemeal amendments to the Companies Ordinance. But he said the time had arrived for a thorough review. ''We need an ordinance for the 21st century. I have therefore asked the Secretary for Financial Services to take this forward.'' Sir Hamish said this exercise was necessary to restrict the opportunities for abuse such as insider trading. ''We have already proposed measures to bring derivatives within the scope of the existing law,'' he said. Coopers & Lybrand managing partner Roderick Chalmers said it was important the Government take a serious look at disclosure made by listed companies to bring standards up to international levels. He said a major step was taken last year when a working committee, consisting of the Securities and Futures Commission, Stock Exchange and Hong Kong Society of Accountants, came out with a number of recommendations. Among them was a suggestion the Government carry out a radical review of the Companies Ordinance's section dealing with disclosure because it was in need of an update. ''I think the full area of full account disclosure is not in line with disclosure in major markets around the world,'' he said, referring to areas such as price-loss and balance sheet formats, and pension costs. Ferrier Hodgson & Marfan partner John Lees said the Companies Ordinance required minor adjustments rather than an extensive overhaul. He said the biggest problem his firm found with the ordinance was the lack of rules involving insolvencies, particularly procedures that would put an administrator in place when a company failed. ''This would give us the opportunity to save a business rather than liquidate assets,'' he said. Mr Lees, who was appointed by Sir Hamish to investigate Tomson Pacific, World Trade Centre Group and Rivera Holdings, said he would support enhancement of the investigative powers contained in the ordinance to provide inspectors with access to a company's books and records.
