Policy Address

Regulation of the Securities Industry

28.        The SFC has stepped up its efforts, including intensified stress tests, to assess the financial exposure that brokers can withstand in adverse market conditions.  The SFC will tighten regulation of fund managers by reviewing the Code on Unit Trusts and Mutual Funds to better protect investors.  In addition, the International Organization of Securities Commissions is reviewing the disclosure of information by distributors of funds at points of sale.  The SFC will enhance the disclosure of information to investors, taking into account best international practices and Hong Kong's situation.

Insurance Supervision

29.        The OCI is a government department.  To further improve the insurance supervisory framework, we see the need to establish an independent Insurance Authority.  This will give the regulatory body more flexibility in operations and staff recruitment, and prepare Hong Kong for the “risk-based capital regulatory regime” to be adopted by the international community.  We believe the establishment of an independent Insurance Authority will promote the long-term, stable development of our insurance industry.  A Government-commissioned consultancy is expected to be completed this year.  We will assess the consultant's recommendations and prepare proposals for consultation.

30.       To protect policyholders in the event of insurer insolvency, the OCI is exploring with the Hong Kong Federation of Insurers feasible options for establishing Policyholders' Protection Funds.

 

 

 

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