AMID the fanfare and crossfire, the Legislative Council yesterday voted to pass the subsidiary legislation enabling improved control by the Securities and Futures Commission (SFC) on stock futures, putting an end to the long-running debate in the legislative chamber. Although the amendment aims to prevent market manipulation, the heat of previous debates has led members to treat it as a vote of confidence on the new derivative products. While disenchanted with the Government and the SFC for not conducting sufficient prior consultation, a majority of members consider the introduction of stock futures as necessary to Hong Kong's position as an international financial centre. By an overwhelming 42 votes to seven, legislative councillors rejected the motion to repeal the Commodities Trading Ordinance (Amendment of Schedule 1) moved by Stephen Poon Kwok-lim and supported by Chim Pui-chung. To allay members' concern, the Government said the SFC would conduct a review of the new products six to nine months after their introduction. The review would assess the impact of stock futures on the equity market and decide whether the risk management system was sufficient. However, the Government was reluctant to guarantee that if problems arose with stock futures, no other financial sectors would be involved in the bail-out. It said the rescue package used in 1987 should not be seen a precedent for the handling of any future financial calamities. 'One would agree that no responsible government should give blanket guarantees to handling unforeseen crises,' said Acting Secretary for Financial Services Wei Chui Kit-yee. The months-long debate was triggered by the sudden announcement made by the Hong Kong Futures Exchange in October to launch stock futures on HSBC Holdings and Hongkong Telecom.
