Our answer to these global challenges is a three-pronged reform of the securities and futures market. First, we are upgrading our market infrastructure. Second, we are modernizing our regulatory regime. And, third, we are demutualising and merging the exchanges and clearing houses. Maintaining the status quo is simply not an option in today's competitive environment.
Reforms have to happen swiftly.
On the question of regulatory reform, our emphasis will be on providing optimal regulation and investor protection, including a new regulation on Internet trading. However, we will not stifle market development and innovation. The third pillar of our reforms concerns the structure of Hong Kong's market, which presently comprises two exchanges and three clearing houses. Although this structure has served us well over the past decade it has increasingly become a constraint over the markets' competitiveness at the international level and their efficiency in responding to the challenges of technological advances. Our plan now is to demutualise and merge the two exchanges and their associated clearing houses into one new holding company and ultimately list the shares of the company on the stock exchange for trading and wider public ownership.