Governance and operation of the Securities and Futures Commission



DateContextSummary of developmentAction
7.7.04 CQ denoting Council Question When considering the Securities and Futures Bill during the Committee Stage at the Council meeting on 13.3.02, Hon Henry WU stated his view that the proposed provisions relating to the Chairman and members of the Securities and Futures Commission (SFC) as set out in Schedule 2 of the Bill should be reviewed. To put in place an effective governance structure for enhancing the transparency, accountability and responsibility of SFC, he suggested that the post of the chairman should be split into the posts of a non-executive chairman and a chief executive officer (CEO).

Hon Henry WU raised a question at the Council meeting on 7.7.04 on excessive power of SFC. He enquired whether the Administration would change the existing structure of SFC. [Hansard "Page 105"]

10.11.04 FA denoting Financial Affairs Panel The Administration briefed the Panel on its proposal of improving SFC's governance structure such that SFC would be led by a non-executive chairman while the executive arm would be headed by a CEO. [Paper] [Background Brief]

At the request of members, the Research and Library Services Division (RLSD) of the LegCo Secretariat provided an information note on the governance structure of selected overseas securities and futures regulators. [Information note prepared by RLSD]

3.1.05 FA denoting Financial Affairs Panel To facilitate the consideration of the Administration's proposal to split the post of the SFC chairman, the Panel met deputations and received views from representatives of SFC, professional bodies, associations of the securities and futures industry and academics. [Summary of submissions]

In view of the diversified views expressed by members as well as the deputations/academics on the details of the Administration's proposal, the Administration was requested to examine the details of the proposal having regard to the views and concerns expressed.

17.2.05 FA denoting Financial Affairs Panel The Panel further discussed the Administration's splitting proposal, having regard to the Administration's written response to submissions and issues raised at the previous meetings, as well as implementation details of the proposal (such as the respective duties, responsibilities, qualification requirements, recruitment and appointment procedures, and remuneration levels for the chairman post and CEO post).

The following motion proposed by Hon James TIEN was passed at the Panel meeting:
"That this Panel supports in principle the Administration's proposal to amend the Securities and Futures Ordinance to split the post of the Chairman of SFC into a non-executive chairman post and a chief executive officer post with a view to enhancing the governance structure of SFC."
[Paper]
[Letter from PAS(SFT) to the Secretary General of the International Organization of Securities Commissions (IOSCO)]
[Letter from the Commission Secretary of SFC to the Secretary General of IOSCO]
[Letter from the Secretary General of IOSCO to PAS(SFT)]
[Extract from "Objectives and Principles of Securities Regulation" of IOSCO] (English version only)
[Two articles published on the Economist (22 January 2005)] (English version only)

4/05 BC denoting Bills Committee on Securities and Futures (Amendment) Bill 2005 The Administration introduced the Securities and Futures (Amendment) Bill 2005 into the LegCo on 6.4.05 to implement the splitting proposal and a Bills Committee was formed on 8.4.05 to scrutinize the Bill.

The Bills Committee held 9 meetings. [Bills Committee on Securities and Futures (Amendment) Bill 2005]

The Bills Committee reported its deliberations to the House Committee on 2.6.06. [Report]

The Council passed the Bill on 14.6.06. [Hansard]

4.5.06 FA denoting Financial Affairs Panel As agreed at the Panel meeting on 6 February 2006, SFC was invited to provide information on its policies on remuneration for and post-termination employment of its senior executives. [Letter dated 9 February 2006 from the Clerk to Panel to the Chairman of SFC]

When the Panel was briefed on SFC's budget for the financial year 2006-07 on 6 March 2006, members expressed concern about the high staff turnover rate of SFC in 2005, particularly for executive staff. In this connection, the Panel invited SFC and the Hong Kong Monetary Authority (HKMA) to provide information on the post-termination employment of their senior executives in the past three years. [Letter dated 7 March 2006 from the Clerk to Panel to the Chairman of SFC] [Reply dated 27 March 2006 from the Commission Secretary of SFC]

Noting the written responses from SFC and HKMA, the Panel invited the two regulators and the Administration for discussion of remuneration for and post-termination employment of their relevant senior executives. [Background brief on the remuneration policies] [Background brief on the policies on post-termination employment]

16.12.09 & 17.12.09 CM denoting Council Motion A motion moved by Hon Mrs Regina IP LAU Suk-yee and amended by Hon Miriam LAU Kin-yee and Dr Hon PAN Pey-chyou on formulating operational standards for public organizations was passed. [Hansard "page 300"] and [Hansard "page 5"] [Progress Report]
12.5.10 CQ denoting Council Question Dr Hon PAN Pey-chyou raised a question on trading of Loco London gold. . [Hansard "page 51"]
2.6.10 CQ denoting Council Question Dr Hon Samson TAM Wai-ho raised a question on electronic trading system. [Hansard "page 92"]
11.5.11 CQ denoting Council Question Hon Mrs Regina IP LAU Suk-yee raised a question on speculative and high-risk financial products. [Hansard "page 16"]
29.5.13 CQ denoting Council Question Hon Christopher CHEUNG Wah-fung raised a question on withdrawal of Hong Kong Mercantile Exchange Limited's automated trading services authorization. [Hansard "page 48"]
10.7.13 CQ denoting Council Question Hon James TIEN Pei-chun raised a question on surrender by the Hong Kong Mercantile Exchange Limited of its authorization to provide automated trading services. [Hansard "page 212"]
23.10.13 CM denoting Council Motion A motion moved by Hon Tommy CHEUNG Yu-yan and amended by Hon Christopher CHEUNG Wah-fung and Hon Dennis KWOK Wing-hang on reviewing the functions of the Securities and Futures Commission was passed. [Hansard "page 157"] [Progress Report]
29.6.16 CQ denoting Council Question Hon James TIEN Pei-chun raised a question on investigations into suspected irregularities of the Hong Kong Mercantile Exchange Limited. [Hansard "page 111"]
28.6.17 CQ denoting Council Question Hon Christopher CHEUNG Wah-fung raised a question on regulation of short selling activities. [Hansard "page 28"]
3.4.19 CQ denoting Council Question Hon WU Chi-wai raised a question on regulation of virtual asset investment activities. [Hansard "page 122"]


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