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william@emergingmarketstrategies.com

William Gamble, J.D., LL.M.
Emerging Market Strategies Company

30 Hammersmith Rd
Newport, RI 02840

Tel 401-847-0249
Cell 401-829-6729

Fax on request

william@emergingmarketstrategies.com
William Gamble, J.D., LL.M.
emerging market strategies
Response to Mr

Response to Mr. Law's Letter to the Financial Times

No regulation can be effective without sufficient legal disincentives

 

Regarding Mr. Law's letter concerning the regulatory standards of the Hong Kong Exchange (HKEx), I am grateful for the education, but unconvinced. In game theory if a principal appoints a watch dog, the agent's best move is to suborn the watchdog. Why is there a need for the Securities and Futures Commission, a regulator, to regulate another regulator, especially one motivated by profit even if that profit is limited by more regulation? Why can't the SFC regulate the exchange directly? What does the SFC do if the HKEx does not comply? Does the SFC have the power to shut the HKEx down? Imprison its executives? I did not find any penalty provisions under Chapter 571, Section 21 (2) of the Securities Futures Ordinance. What are the legal disincentives that the SFC can employ?

Also if I understand correctly, the SFC is an organ of the Hong Kong Special Administrative Region Government, which is part of China. China is run by the State Council, which also supervises State-owned Assets Supervision and Administration Commission (Sasac), which is the majority shareholder of many Red Chip and H share companies listed on HKEx. So what are SFC's economic and legal incentives? To protect foreign minority shareholders in accordance with international standards? It is always important to remember that any law is still just a piece of paper.

 

William Gamble

EMERGING MARKET STRATEGIES

Suite 1D

1990 Pawtucket Ave

East Providence, RI 02914

Tel: 401-272-8906;Fax:401-272-8139; Cell 401-829-6729

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http://www.emergingmarketstrategies.com/

 

William Gamble, president of Emerging Market Strategies had been investing internationally for over twenty years. An international lawyer and economist, he developed his theories beginning with his first hand experience and business dealings in the Russia starting in 1993. Mr. Gamble holds two graduate law degrees. He was educated at Institute D'Etudes Politique, Trinity College, University of Miami School of Law, and University of Virginia Darden Graduate School of Business Administration. He was a member of the bar in three states, over four different federal courts and has spoken four languages. His work is published in journals and newspapers. He has appeared on numerous television and radio programs and been quoted in newspapers and magazines in the United States and through out the world Asia. (For more information click here for curriculum vitae.)