Joseph Yam, JP: Hong Kong Foreign Exchange and Money Market Practices Committee Opening remarks by Mr Joseph Yam, JP, Chief Executive of the Hong Kong Monetary Authority, at the inaugural seminar of the reconstructed Hong Kong Foreign Exchange and Money Market Practices Committee, held in Hong Kong on 16 January 2001. *  *  *  Good afternoon Mr Powell, Mr Mathieson, Guests, Ladies and Gentlemen, 1. I am delighted to welcome all of you to today’s seminar. This is the inaugural seminar of the reconstructed Hong Kong Foreign Exchange and Money Market Practices Committee (MPC). The organisation of seminars by the MPC will, I hope, provide bankers, treasurers and other market practitioners with an opportunity to focus on issues of common interest. It will help specifically to fulfil at least two of the objectives of the MPC: to promote understanding and expertise relevant to the markets; and to encourage communication among market participants and professional bodies, both local and overseas. 2. The MPC was first established in 1992, as a non-statutory body, with the mandate to give advice on matters relating to the health and development of Hong Kong’s foreign exchange and money markets. Last year was a year of restructuring and recovery for Hong Kong, and the MPC seems to have been following very much the same path. After a review of its functions, the Committee decided to restructure itself, with a view to playing a fuller role in developing and promoting the forex and money markets in Hong Kong.
It has broadened its representation and established three sub-committees, which deal with issues ranging from market practices and product development to training and education. The Committee also expects to adopt a higher profile – for example, through the publication of standard documentation and promotional literature, and by organising seminars of the kind that we are having today. 3. The reconstructed MPC has already begun to show achievements. Some of its contributions may seem a little quaint, such as its work in formulating a set of standard typhoon and rainstorm procedures for settling foreign exchange and money market transactions under extreme weather conditions. But just imagine the chaos and confusion if everyone were to adopt a different methodology for interest calculations and use a different date to settle the trades every time the markets close down because of bad weather. The MPC has also been advising the HKAB on other payment and settlement standards. Again, the advice given may seem insignificant or prosaic, like the creation of a standard format for the settlement code needed by participants in our new US dollar clearing system; but it is often tiny creations like this one that go a long way towards strengthening efficiency in payment and settlement systems. 4. Apart from this “domestic” work, the MPC has also served as a window connecting the local forex and money market industry with the outside world. It has already started to strengthen its ties with overseas foreign exchange committees.