Response to the 2023 Policy Address Public Consultation
Release Date: 2023-08-09
Dear Chief Executive Mr. John Lee Ka-chiu,
Our full name is the "Hong Kong Securities and Futures Professionals Association," which is one of the affiliated associations of the Hong Kong Federation of Trade Unions ("HKFTU"). It was established in Hong Kong in 2001 under the Trade Unions Ordinance (Cap. 332 of the Laws of Hong Kong). Our association is also one of the entities under the financial services sector in the First Sector Group of the Schedule to the Chief Executive Election Ordinance (Cap. 569).
Our association is a trade union for practitioners engaged in regulated activities under the Securities and Futures Commission (SFC) licenses, such as securities, futures, or asset management (hereinafter referred to as "the industry"). We currently have over six thousand members. The founding principle of our association is to safeguard the interests of the industry, provide benefits to industry professionals, and strive to cultivate more professional talent for the local industry. As one of the institutions approved by the Hong Kong SFC to offer continuous education programs, we continuously organize training courses for our members covering various fields and topics. To date, we have conducted over 200 courses, significantly enhancing the competitiveness and professional standards of our members.
Below are our opinions and suggestions regarding the development of the industry, addressed to the Chief Executive, detailed as follows:
1. Request to Abolish the Stock Stamp Duty;
Since rumors of increasing the stock stamp duty began in 2020, our association has been concerned about the impact of this increase. The increase in stock stamp duty has severely affected the trading volume of the Hong Kong securities market and the livelihood of practitioners. Being one of the four major pillars of Hong Kong's economy, the securities industry plays a crucial role in the overall development of Hong Kong. Despite opinions from various concerned groups, including our association, it seems the Financial Secretary has overlooked the relevant impacts. Below are some of the public letters we have previously released, which contain compelling arguments and data. We earnestly hope the Chief Executive will pay attention to the development of the securities industry.
- Opposition to Increasing Stock Transaction Stamp Duty (January 23, 2021)
https://www.hksfpa.org/video.aspx?clid=143&atid=1438&lan=1
- Our Opinions on the 2023-24 Budget (January 27, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1468&lan=1
- Response to the 2023/24 Budget by the Hong Kong Securities and Futures Professionals Association (February 22, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1482&lan=1
- Restore a Future for the Securities Industry (August 2, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1577&lan=1
- President's Response to Recent Misconceptions about Stamp Duty Increase Logic (August 3, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1582&lan=1
2. Request for a Review of the Development and Regulatory Mechanism of the Securities Industry;
Under the national 14th Five-Year Plan, Hong Kong's positioning is very clear. Currently, Hong Kong lacks an authoritative leading body dedicated to promoting industry development. While business is moving towards extreme compliance, innovation and business development are significantly constrained, and there is a lack of balance between the two. This has led to operational difficulties for Chinese, foreign, and local capital alike. We understand that today's predicament may not have arisen from a single cause, but policy regulations need to be appropriately relaxed to allow Hong Kong's securities market to flourish again, encouraging financial activities from around the world to take place in Hong Kong. We hope the government can reform the industry to make Hong Kong shine once more!
- Opinion Paper on the Review and Improvement of the Development and Regulatory Framework of the Securities, Futures, Asset Management, and Virtual Asset Industries (August 1, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1574&lan=1
3. Request for the SFC to Introduce the “Risk Management Guidelines for Licensed Persons Dealing in Futures Contracts” Only Without Compromising Business Opportunities;
Our association is deeply concerned about the SFC's strengthened regulation of risk management in the futures market. Although the SFC has privately indicated to the industry that it will review these measures, any unreasonable tightening of compliance regulations will fundamentally harm the industry. Furthermore, the proposed trigger points are unfair, as they are based on issues within the UK's commodity exchange, and applying these risk management measures to Hong Kong's futures traders is a case of misdirected enforcement.
- SFC Consultation: Opposition to the Consultation Paper on the "Risk Management Guidelines for Licensed Futures Traders" (January 6, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1442&lan=1
- Summary of the Meeting with the SFC on the "Risk Management Guidelines for Licensed Futures Traders" (March 27, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1518&lan=1
4. Request for a Review of the Exchange's "Listing Rules" to Protect Local SMEs' Financing and Economy;
The Hong Kong Stock Exchange conducted a consultation on the "Listing Rules" regarding "backdoor listings" in June 2018 and published the "Consultation Conclusions on Backdoor Listings, Continuing Listing Criteria and Other Rule Amendments" in July 2019. The amendments to the "Listing Rules" took effect on October 1, 2019. However, these rules have frequently been criticized for affecting the development of Hong Kong's securities market and hindering the normal economic development of Hong Kong. We hope the Chief Executive will pay attention to this matter.
- Pros and Cons of Reforming Backdoor Listing Regulations
https://www.hksfpa.org/file.aspx?clid=143&atid=1583&lan=1
5. Request for a Clear Mechanism to Ensure Personal Safety Before Implementing Arrangements for Market Operation During Severe Weather;
Our association opposes the suggestion of operating the market during severe weather without a comprehensive mechanism to ensure personal safety. Although the market may only need to close for one or two days a year due to severe weather, we are concerned whether it's cost-effective for the Hong Kong Stock Exchange to invest significant resources to address such infrequent events. With the worsening climate issues globally, there is a risk of negative public sentiment if an accident occurs while employees commute during severe weather. Moreover, established investment institutions are already equipped to handle market closures due to adverse weather in Hong Kong. The focus should instead be on ensuring the personal safety of practitioners, which aligns positively with Hong Kong's current talent retention policies.
- Hong Kong Stock Exchange Trading During Black Rainstorm? Industry Questions: Can't Miss a Day of Business? (Now TV | July 20, 2021)
https://youtu.be/TS-eQMOCHLk
- Response by the Hong Kong Securities and Futures Professionals Association to the 2023/24 Budget (February 22, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1482&lan=1
- Hong Kong Stock Exchange Explores Reform: Trading During Typhoons and Black Rainstorms (Oriental Daily | February 23, 2023)
https://shorturl.at/pvY19
- Challenges in Trading During Signal No. 8 and Black Rain: Handling Settlements with Banks Closed, Brokers' Employees Must Work (Ming Pao | February 23, 2023)
https://shorturl.at/vzFGN
- Exploring "Trading As Usual" During Signal No. 8 and Black Rain (Sing Tao Daily | February 23, 2023)
https://shorturl.at/nzGV3
- Bloomberg: HKEX Drafts Proposal Suggesting Continued Trading During Typhoons and Heavy Rain; Frontline Concerns on Practical Implementation (Cable News | May 11, 2023)
https://youtu.be/ZrRb6HQCvi8
- Evening News: Bloomberg Reports Authorities Drafting Proposal for Trading During Severe Weather (RTHK | May 11, 2023)
https://youtu.be/THZzXBEGnD4
6. Over the past decade, the number of employees and job vacancies in the securities industry has decreased. The introduction of the “Top Talent Pass Scheme,” which has no cap and no restrictions on the place of origin, has severely affected local employment.
A recent survey conducted by our association reveals that 63% of professionals express concern regarding the “Top Talent Pass Scheme” scheme's ability to attract foreign talent. Additionally, 78% advocate for the implementation of a diversified sourcing policy for applicants under this scheme. Furthermore, an overwhelming 86% of respondents support the notion of establishing a limit on the number of applicants permitted for each occupation within the “Top Talent Pass Scheme” framework.
According to our opinion poll, 88% of experts believe that the Hong Kong SAR government should refer to the Singapore government and formulate more policies to protect local employment opportunities; 68% of experts believe that the Hong Kong SAR government should refer to the Monetary Authority of Singapore’s licensing guidelines, including: 1. At least 2 directors, at least 1 of whom is a Singapore resident; 2. The chief executive has at least 10 years of experience and is a Singapore resident; 3. At least 2 full-time employees for each regulated activity are Singapore residents, and each Individuals must be appointed under the Singapore Securities and Futures Ordinance.
On May 13, the newspaper quoted the Secretary for Labor and Welfare, Mr. Chris Sun Yuk-han, as saying that as of the end of April, about 27,000 applications had been received, of which 17,000 had been approved; about 5,000 of the approximately 10,000 applicants who had received relevant visas had arrived in Hong Kong. Most of them are engaged in the financial industry. He said that about two-thirds of the applications came from the mainland, and the other third came from overseas. Some of the applications submitted from overseas also had mainland backgrounds.
The number of employed people and job vacancies have both fallen sharply, so why should we promote "talented talents"? At the same time, compared with Singapore's measures, there are no adequate measures to protect local talents. This association believes that the Hong Kong SAR government should strengthen the introduction of "high-talented" measures to protect local talents, otherwise it will be slightly less well-planned.
Meeting with the Acting Secretary for Labour and Welfare (April 4, 2023)
https://www.hksfpa.org/file.aspx?clid=150&atid=1524&lan=1
Expressing Opinions on Labor and Welfare Issues in the Financial Services Industry (May 1, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1538&lan=1
【FTU Hot Topics】Video: The Securities Union Organizes Training to Help Employees Enhance Their Value, Hopes for Government Support to Boost Industry Competitiveness
https://youtu.be/m85HyFSeNQM
7. Authorities should strictly address large-scale internet brokers without licenses, as they do not provide protection for investors.
8. Request a review and relaxation of the SFC's “Guidelines for Securities Margin Financing Activities.”
9. Request Hong Kong securities firms to charge fees for conducting research and reviewing the reinstatement of the minimum commission system;
Request for the Consumer Council to conduct research on the fees charged by Hong Kong securities firms (April 5, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=152
If you have any questions regarding this letter, please feel free to contact me (Phone: / Email: @hksfpa.org) or Mr. Wong Hoi Lok, Director of the Industrial Relations Department (Phone: / Email: ).
Your Sincerely
Mofiz Chan
Chairman
Hong Kong Securities and Futures Professionals Association
Our full name is the "Hong Kong Securities and Futures Professionals Association," which is one of the affiliated associations of the Hong Kong Federation of Trade Unions ("HKFTU"). It was established in Hong Kong in 2001 under the Trade Unions Ordinance (Cap. 332 of the Laws of Hong Kong). Our association is also one of the entities under the financial services sector in the First Sector Group of the Schedule to the Chief Executive Election Ordinance (Cap. 569).
Our association is a trade union for practitioners engaged in regulated activities under the Securities and Futures Commission (SFC) licenses, such as securities, futures, or asset management (hereinafter referred to as "the industry"). We currently have over six thousand members. The founding principle of our association is to safeguard the interests of the industry, provide benefits to industry professionals, and strive to cultivate more professional talent for the local industry. As one of the institutions approved by the Hong Kong SFC to offer continuous education programs, we continuously organize training courses for our members covering various fields and topics. To date, we have conducted over 200 courses, significantly enhancing the competitiveness and professional standards of our members.
Below are our opinions and suggestions regarding the development of the industry, addressed to the Chief Executive, detailed as follows:
1. Request to Abolish the Stock Stamp Duty;
Since rumors of increasing the stock stamp duty began in 2020, our association has been concerned about the impact of this increase. The increase in stock stamp duty has severely affected the trading volume of the Hong Kong securities market and the livelihood of practitioners. Being one of the four major pillars of Hong Kong's economy, the securities industry plays a crucial role in the overall development of Hong Kong. Despite opinions from various concerned groups, including our association, it seems the Financial Secretary has overlooked the relevant impacts. Below are some of the public letters we have previously released, which contain compelling arguments and data. We earnestly hope the Chief Executive will pay attention to the development of the securities industry.
- Opposition to Increasing Stock Transaction Stamp Duty (January 23, 2021)
https://www.hksfpa.org/video.aspx?clid=143&atid=1438&lan=1
- Our Opinions on the 2023-24 Budget (January 27, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1468&lan=1
- Response to the 2023/24 Budget by the Hong Kong Securities and Futures Professionals Association (February 22, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1482&lan=1
- Restore a Future for the Securities Industry (August 2, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1577&lan=1
- President's Response to Recent Misconceptions about Stamp Duty Increase Logic (August 3, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1582&lan=1
2. Request for a Review of the Development and Regulatory Mechanism of the Securities Industry;
Under the national 14th Five-Year Plan, Hong Kong's positioning is very clear. Currently, Hong Kong lacks an authoritative leading body dedicated to promoting industry development. While business is moving towards extreme compliance, innovation and business development are significantly constrained, and there is a lack of balance between the two. This has led to operational difficulties for Chinese, foreign, and local capital alike. We understand that today's predicament may not have arisen from a single cause, but policy regulations need to be appropriately relaxed to allow Hong Kong's securities market to flourish again, encouraging financial activities from around the world to take place in Hong Kong. We hope the government can reform the industry to make Hong Kong shine once more!
- Opinion Paper on the Review and Improvement of the Development and Regulatory Framework of the Securities, Futures, Asset Management, and Virtual Asset Industries (August 1, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1574&lan=1
3. Request for the SFC to Introduce the “Risk Management Guidelines for Licensed Persons Dealing in Futures Contracts” Only Without Compromising Business Opportunities;
Our association is deeply concerned about the SFC's strengthened regulation of risk management in the futures market. Although the SFC has privately indicated to the industry that it will review these measures, any unreasonable tightening of compliance regulations will fundamentally harm the industry. Furthermore, the proposed trigger points are unfair, as they are based on issues within the UK's commodity exchange, and applying these risk management measures to Hong Kong's futures traders is a case of misdirected enforcement.
- SFC Consultation: Opposition to the Consultation Paper on the "Risk Management Guidelines for Licensed Futures Traders" (January 6, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1442&lan=1
- Summary of the Meeting with the SFC on the "Risk Management Guidelines for Licensed Futures Traders" (March 27, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1518&lan=1
4. Request for a Review of the Exchange's "Listing Rules" to Protect Local SMEs' Financing and Economy;
The Hong Kong Stock Exchange conducted a consultation on the "Listing Rules" regarding "backdoor listings" in June 2018 and published the "Consultation Conclusions on Backdoor Listings, Continuing Listing Criteria and Other Rule Amendments" in July 2019. The amendments to the "Listing Rules" took effect on October 1, 2019. However, these rules have frequently been criticized for affecting the development of Hong Kong's securities market and hindering the normal economic development of Hong Kong. We hope the Chief Executive will pay attention to this matter.
- Pros and Cons of Reforming Backdoor Listing Regulations
https://www.hksfpa.org/file.aspx?clid=143&atid=1583&lan=1
5. Request for a Clear Mechanism to Ensure Personal Safety Before Implementing Arrangements for Market Operation During Severe Weather;
Our association opposes the suggestion of operating the market during severe weather without a comprehensive mechanism to ensure personal safety. Although the market may only need to close for one or two days a year due to severe weather, we are concerned whether it's cost-effective for the Hong Kong Stock Exchange to invest significant resources to address such infrequent events. With the worsening climate issues globally, there is a risk of negative public sentiment if an accident occurs while employees commute during severe weather. Moreover, established investment institutions are already equipped to handle market closures due to adverse weather in Hong Kong. The focus should instead be on ensuring the personal safety of practitioners, which aligns positively with Hong Kong's current talent retention policies.
- Hong Kong Stock Exchange Trading During Black Rainstorm? Industry Questions: Can't Miss a Day of Business? (Now TV | July 20, 2021)
https://youtu.be/TS-eQMOCHLk
- Response by the Hong Kong Securities and Futures Professionals Association to the 2023/24 Budget (February 22, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1482&lan=1
- Hong Kong Stock Exchange Explores Reform: Trading During Typhoons and Black Rainstorms (Oriental Daily | February 23, 2023)
https://shorturl.at/pvY19
- Challenges in Trading During Signal No. 8 and Black Rain: Handling Settlements with Banks Closed, Brokers' Employees Must Work (Ming Pao | February 23, 2023)
https://shorturl.at/vzFGN
- Exploring "Trading As Usual" During Signal No. 8 and Black Rain (Sing Tao Daily | February 23, 2023)
https://shorturl.at/nzGV3
- Bloomberg: HKEX Drafts Proposal Suggesting Continued Trading During Typhoons and Heavy Rain; Frontline Concerns on Practical Implementation (Cable News | May 11, 2023)
https://youtu.be/ZrRb6HQCvi8
- Evening News: Bloomberg Reports Authorities Drafting Proposal for Trading During Severe Weather (RTHK | May 11, 2023)
https://youtu.be/THZzXBEGnD4
6. Over the past decade, the number of employees and job vacancies in the securities industry has decreased. The introduction of the “Top Talent Pass Scheme,” which has no cap and no restrictions on the place of origin, has severely affected local employment.
A recent survey conducted by our association reveals that 63% of professionals express concern regarding the “Top Talent Pass Scheme” scheme's ability to attract foreign talent. Additionally, 78% advocate for the implementation of a diversified sourcing policy for applicants under this scheme. Furthermore, an overwhelming 86% of respondents support the notion of establishing a limit on the number of applicants permitted for each occupation within the “Top Talent Pass Scheme” framework.
According to our opinion poll, 88% of experts believe that the Hong Kong SAR government should refer to the Singapore government and formulate more policies to protect local employment opportunities; 68% of experts believe that the Hong Kong SAR government should refer to the Monetary Authority of Singapore’s licensing guidelines, including: 1. At least 2 directors, at least 1 of whom is a Singapore resident; 2. The chief executive has at least 10 years of experience and is a Singapore resident; 3. At least 2 full-time employees for each regulated activity are Singapore residents, and each Individuals must be appointed under the Singapore Securities and Futures Ordinance.
On May 13, the newspaper quoted the Secretary for Labor and Welfare, Mr. Chris Sun Yuk-han, as saying that as of the end of April, about 27,000 applications had been received, of which 17,000 had been approved; about 5,000 of the approximately 10,000 applicants who had received relevant visas had arrived in Hong Kong. Most of them are engaged in the financial industry. He said that about two-thirds of the applications came from the mainland, and the other third came from overseas. Some of the applications submitted from overseas also had mainland backgrounds.
The number of employed people and job vacancies have both fallen sharply, so why should we promote "talented talents"? At the same time, compared with Singapore's measures, there are no adequate measures to protect local talents. This association believes that the Hong Kong SAR government should strengthen the introduction of "high-talented" measures to protect local talents, otherwise it will be slightly less well-planned.
Meeting with the Acting Secretary for Labour and Welfare (April 4, 2023)
https://www.hksfpa.org/file.aspx?clid=150&atid=1524&lan=1
Expressing Opinions on Labor and Welfare Issues in the Financial Services Industry (May 1, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=1538&lan=1
【FTU Hot Topics】Video: The Securities Union Organizes Training to Help Employees Enhance Their Value, Hopes for Government Support to Boost Industry Competitiveness
https://youtu.be/m85HyFSeNQM
7. Authorities should strictly address large-scale internet brokers without licenses, as they do not provide protection for investors.
8. Request a review and relaxation of the SFC's “Guidelines for Securities Margin Financing Activities.”
9. Request Hong Kong securities firms to charge fees for conducting research and reviewing the reinstatement of the minimum commission system;
Request for the Consumer Council to conduct research on the fees charged by Hong Kong securities firms (April 5, 2023)
https://www.hksfpa.org/video.aspx?clid=143&atid=152
If you have any questions regarding this letter, please feel free to contact me (Phone: / Email: @hksfpa.org) or Mr. Wong Hoi Lok, Director of the Industrial Relations Department (Phone: / Email: ).
Your Sincerely
Mofiz Chan
Chairman
Hong Kong Securities and Futures Professionals Association