It is a pleasure to welcome you to the Securities Commission and to the Seminar on Enforcement of Corporate Governance for APEC Economies. I would also like to take this opportunity to thank the Australian High Commission for inviting the SC to join them in organising and hosting this seminar as part of the APEC's Strengthening Economic Legal Infrastructure (SELI) initiative.

Ladies and gentlemen

It is clear that efforts to promote good corporate governance standards and practices in the financial markets have become a priority agenda, particularly in the aftermath of the Asian financial crisis and then in more recent times, the large corporate failures in the USA and Europe.

These developments have provided useful lessons in the importance of transparency, accentuating the extreme seriousness with which accounting malpractices and outright fraud have to be viewed if there is to be confidence in the integrity of the capital market.

The US Supreme Court in the case of Basic Inc v. Levinson (1988) said: "It is hard to imagine that there is ever any buyer or seller who does not rely on market integrity. Who would knowingly roll a dice in a crooked crap game?" Corporate failures and misconduct inevitably undermine confidence leading to the departure of investors who will seek investment opportunities in jurisdictions where probity is not undermined, and duties and obligations attached to stewardship are not subordinated to the dictates of greed and expediency.

No doubt therefore, the immediate and long term impact of investor confidence in the market will continue to be a primary concern for Governments and financial regulators the world over.

It is significant that both the Trade and Finance Ministers' Processes within the APEC umbrella should converge in their efforts towards building capacity in the area of corporate governance for member economies. Efforts to strengthen corporate governance in the region which began in 1999, continue till today. At present, a core group comprising Australia, Mexico, Korea, Philippines, Hong Kong and Malaysia are undertaking a " Pathfinder Initiative on Corporate Governance ", aimed at gathering information and facilitating peer reviews on specific aspects of corporate governance - namely, disclosure and transparency and the responsibilities of the board of directors. Complementing these APEC initiatives, is the APEC Financial Regulators' Training Initiative. Led by the Asian Development Bank and the USA, this Training Initiative provides an important platform for capacity building to equip regulators to effectively address corporate governance challenges.

Ladies and gentlemen,

All these efforts have seen significant reforms being undertaken across the board within the region to keep pace with global standards. However, progress has been uneven, with some economies achieving significant advancement and others adopting a more incremental approach, understandably, due to the different stages in the development of the economies. This notwithstanding, I think it is important for us all to keep in mind that serious efforts must be taken to ensure that corporate governance practices meet the challenges brought upon by the rapid integration of economies and the intensity of competition.

Enforcement

Perhaps the most widespread sentiment expressed in many roundtable discussions is the importance of enhancing enforcement. While legal traditions may vary across countries, there is a broad consensus that the structure, vigilance and capacity of the regulatory and judicial framework forms an integral part of the corporate governance environment.

Therefore, there is a need to narrow the gap between formal legal provisions and actual implementation and enforcement. Effective enforcement pose an obvious challenge to the regulators and enforcement agencies: it requires not only adequate human skills and financial resources, but also the will to act.

Enforcement of corporate governance therefore needs the full involvement and commitment of all parties concerned.

APEC's role in this area is significant. Having put in efforts in promoting reform of the regulatory framework, it is only appropriate for the economies to combine resources to overcome challenges to effective enforcement.

This Seminar today is therefore important, timely and relevant to all of us. I hope the discussions and deliberations that will take place during the course of the Seminar will assist us in identifying priority areas and formulating a comprehensive response to the enforcement challenges.

On behalf of the Securities Commission, I would like to thank all of you for your participation. I would also like to put on record our appreciation to all speakers whose expertise and experience will no doubt stimulate valuable discourse on the issues at hand.

Thank you.