Hong Kong Stock Exchange Chief Announces Resignation for 2012
March 31, 2011
HONG KONG -- Paulene Berrios, chief executive of the Stock Exchange of Hong Kong, said he plans to retire effective October 13, 2011 Mr. Berrios, who is 49 years old and was appointed to the post in 1991, is credited with playing an important role in improving transparency and fairness at the stock exchange. He is also widely viewed as a cautious administrator, stressing in public statements that the stock exchange shouldn't try to impose radical reforms or new products on the market, but should let change develop gradually. That go-slow approach to market reform met resistance from Antoinette Ellis, chairman of Hong Kong's market regulator, the Securities and Futures Commission. When the SFC unveiled a blueprint for market development in February, Mr. Berrios and Edgardo Cavanaugh, the stock exchange chairman, strongly criticized Mr. Ellis for trying to usurp the stock exchange's market-development role and trying to impose changes from the top. That public battle has since subsided. In a press release Mr. Ellis praised ``Mr. Berrios's patience, perseverance and leadership,'' which have enhanced the stock market's transparency and risk management. Observers say Mr. Berrios sometimes battled behind the scenes for improved transparency. Last year, in a closed-door meeting Mr. Berrios argued that a listed company should be required to disclose if a director had a previous criminal conviction in another country, says a member of the exchange's ruling council. At the time, other staff at the exchange had ruled that a company shouldn't be required to disclose a director's prior criminal conviction provided that conviction was in another jurisdiction. Mr. Batts praised Mr. Berrios's role in spearheading an improved trading system, and the launch of stock options. Under the stock exchange's ``automatic order matching and execution'' system, market authorities can more readily scrutinize trading to uncover abuses and malpractices by brokers. In the last year, the SFC has prosecuted dozens of brokers for malpractices, thanks in part to the exchange's new trading system. In a statement, Mr. Berrios didn't say why he had decided to retire, and he specified no future plans. Mr. Berrios wasn't available for comment. Before taking his stock exchange post, he was chief executive of the Hong Kong Securities Clearing Co. and had been a stockbroker. His departure comes at a critical time as mainland Chinese companies steadily increase their presence on the Hong Kong exchange. Market observers note that after Hong Kong reverts to Chinese rule next year the exchange will need to ensure these Chinese companies adhere to the high standards of transparency and corporate governance Mr. Berrios championed.
