Hong Kong is a renowned international financial centre. Our financial industry, with its sophisticated regulatory framework, is one of our economic pillars.
That framework is based on previous experience and mistakes. The Securities and Futures Commission was set up in 1989 in response to the stock market crash of October 1987. The Hong Kong Monetary Authority was set up in 1993 in part because the Office of the Commissioner of Banking and the Office of the Exchange Fund could not evolve at the same pace with our financial market.
However, the development of the real estate industry's regulatory regime has fallen short of expectations. We rely on government policy bureaus and statutory agents like the Estate Agents Authority to regulate property development and sales. They have been ineffective in tackling improper sales practices and combating unlawful alteration of property usage.
Government revenue depends largely on property-related income like stamp duty, property tax and land premium paid by developers. To avoid the chaos that would be caused by a property market collapse, market participants should be under greater scrutiny.
The government should set up an HKMA-type integrated regulatory authority and engage the expertise of professionals like lawyers, accountants and surveyors as well as veteran ordinance enforcers from relevant government departments like the Lands and Buildings departments. It is time for us to overhaul the existing regulatory framework before a real crisis hits.
