DESPITE another lengthy session to clear members' queries over stock futures, unconvinced legislative councillors decided yesterday to let the full house debate on the introduction of the new derivatives product. The Legco sub-committee set up to study the Commodities Trading Ordinance (Amendment of Schedule 1) Order convened its second meeting yesterday and decided to maintain its objection to the passing of the subsidiary legislation. The sub-committee's disapproval means there will be a full-house debate on December 14 when the council meets to decide its stance on the subsidiary legislation. Although the piece of legislation only empowers the Securities and Futures Commission (SFC), the securities watchdog, to have criminal sanctions against market participants exceeding certain position limits and is intended to control market manipulation, Legco members considered it a vote of confidence in the product. 'If Legco decided against the subsidiary legislation on December 14 and the SFC insisted on launching stock futures without having sufficient supervisory power, the public would consider such action as irresponsible,' said Stephen Poon Kwok-lim, chairman of the sub-committee. But opposition seemed to have softened and there were only two members on the sub-committee who raised their objection, namely Chim Pui-chung and Tang Siu-tong. The discussion centred on two main areas. The foremost topic was the impact of the new product on the equities market. Although the Financial Services Branch alluded to extensive academic research, members remained half-hearted. Some members pressed the Government hard on giving a guarantee that if financial problems arose from stock futures trading, stock investors would not be called on to mount a rescue. Under severe pressure from Mr Chim, the Government finally agreed not to use as a precedent the way it handled the market crash in 1987 - that was penalising stock investors to save the futures exchange. To quell members' worries on the popularity of the instrument, the SFC consented to conduct a review of the stock futures six months after the implementation, assessing their impact on the cash market and small investors. In response to stockbrokers' comment that some businesses would be lost to the futures exchange, SFC chairman Robert Nottle agreed to talk to the two exchanges on opening up membership opportunities. He stressed that exchanges overseas were posing a real threat to Hong Kong's position as a regional financial centre. He quoted the chief executive of the Sydney Futures Exchange, Les Hosking, as saying that the key to increased volume in the Sydney exchange was the development of a range of equity derivatives.