Before the mid-1970s, Hong Kong's securities and commodity markets were basically unregulated. After the stock market plunged from 1973 to 1974, the government first intervened, and then formulated the core legislation to regulate the securities and futures industry.
At that time, the relevant laws were enforced by two part-time supervisory committees (responsible for securities and commodity trading respectively) and their chief executives (securities and commodity trading commissioners). The Office of the Commissioner for Securities and Commodities Trading is a government department headed by the Commissioner for Securities and Commodities Trading.
The above regulatory framework has been maintained for more than 10 years, during which there has been basically no change. However, during this period, both the international and Hong Kong securities and futures markets have undergone drastic changes. The regulatory framework at that time was inevitably out of touch with the times. 1the stock market crash in June 1987 not only led to the suspension of trading in the Hong Kong stock market and the stock index futures market for four days, but also clearly exposed the shortcomings of the regulatory framework at that time.
After the stock market crash, the authorities set up a six-member securities review committee chaired by Ian Hay Davidson to study the framework and mechanism of financial supervision in Hong Kong, explore relevant improvement measures, and how to avoid the chaos of the stock market crash of 5438+0987+00 in June.
1988 In May, the committee published a report, pointing out that the Office of the Commissioner for Securities and Commodities Trading lacked sufficient resources to properly supervise the rapidly developing and rapidly changing Hong Kong market. The Committee found that the relevant authorities spent too much resources on the daily review work, but had little effect, and did not actively monitor and supervise the market and intermediaries. Due to the lack of clear working guidelines, the two supervisory committees failed to carry out effective supervision. Not only did they fail to take proactive preventive supervision measures, but they also appeared passive and ignorant.
The Committee suggested setting up a statutory body outside the civil service structure to replace the then regulatory system. The chairman and staff of the institution are full-time professional supervisors, and the funds are mainly borne by the market. In the Committee's view, this institution should have extensive investigation and disciplinary powers in order to effectively perform its regulatory functions.
1989 In May, with the promulgation of the Securities and Futures Commission Ordinance, the CSRC was established.