Meeting with Secretary Christopher Hui on the arrangement of “Severe Weather Trading of Hong Kong Securities and Derivatives Markets”
February 27, 2024
The consultation period for the document titled“Severe Weather Trading of Hong Kong Securities and Derivatives Markets” by Hong Kong Exchanges and Clearing Limited (HKEX) has concluded. Hong Kong Securities and Futures Professionals Association, representing Hong Kong's financial and securities sector, along with Legislative Council members Hon. Kwok Wai Keung Aaron and Hon. Tang Ka Piu Bill from the Federation of Trade Unions, engaged in discussions with the Financial Services and the Treasury Bureau and HKEX.
Participants:
- Federation of Trade Unions: Legislative Council members Hon. Kwok Wai Keung Aaron and Hon. Tang Ka Piu Bill.
- Hong Kong Securities and Futures Professionals Association: Chairman Mr. Mofiz Chan, Council Member Mr. Wong Hoi Lok Ivan, and Officer Mr. Lam Wing Yiu Anthony.
- Financial Services and the Treasury Bureau: Secretary Mr. Christopher Hui, Under Secretary Joseph Chan, Principal Assistant Secretary Mr. Larry Chu, and Political Assistant Mr. Julian Ip.
- HKEX: Joint Chief Operating Officer and Head of Equities Mr. Wilfred Yiu, Senior Vice President Mr. Victor Chan, and Assistant Vice President Ms. Melody Au
HKSFPA, together with the two legislators, acknowledges that “Severe Weather Trading of Hong Kong Securities and Derivatives Markets” stems from recommendations by the "Task Force on Enhancing Stock Market Liquidity." This initiative is aimed at bolstering Hong Kong's global connectivity and reinforcing its position as a leading international financial hub. We support policies that positively impact Hong Kong and the financial sector. However, the consultation document primarily outlines principles without detailing specific practical measures, necessitating a reflection on industry realities. Key observations include:
1. Employee Safety in Related Industries:
- Chairman Mr. Mofiz Chan highlighted that the safety of practitioners and investors is crucial. The expectation is for operations to be conducted electronically and remotely, discouraging physical service provision during severe weather. While the document notes industry experience with remote work during the pandemic, severe weather presents unique challenges, requiring support from sectors like banking, securities, and infrastructure, which raises social costs and safety concerns.
2. Work Hours and Employee Rights:
- It's imperative for employers to have clear protocols for employee duties during severe weather, including work hour calculations to safeguard rights. The government should provide practical guidelines to prevent disputes. Chairman Chan proposed referencing Chicago's weather futures to develop a model for Hong Kong to hedge against severe weather.
3. Rising Operating Costs and Market Concentration:
- Enhancements in network security demand investment, primarily undertaken by large financial institutions. Smaller brokers may struggle with the technical demands, potentially leading to market withdrawal and increased systemic risk due to trading concentration among leading brokers.
4. Responsibility and Employee Safety:
- Legislative Council member Kwok Wai Keung Aaron stressed that personnel and investor safety must be prioritized. Despite expectations for remote operations, some staff presence at companies is necessary, as experienced during the pandemic. The document lacks guidance on commuting logistics for such personnel.
5. Implementation Timeline and Industry Challenges:
- With the consultation concluding in January and implementation slated for July, there is concern over the adequacy of time for developing guidelines or amending regulations. Small and medium brokers might face difficulties in assembling technical teams for remote work, which could disrupt the industry's ecosystem. The document's lack of detailed analysis might lead to misunderstandings or grievances.
HKSFPA values the opportunity to engage in this dialogue, recognizing its significance. Both parties engaged in candid discussions to genuinely expand the market. The bureau intends to consider the association's feedback, refine specific issues, and address concerns effectively while ensuring employee safety.
Media inquiries: pr@hksfpa.org
Hong Kong Securities and Futures Professionals Association