Opposition to the Proposed Increase in Stamp Duty on Stock Transactions
Release Date: 2021-01-13
Ordinary Mail Delivery and Email
Email: fso@fso.gov.hk
Financial Secretary
Government of the Hong Kong Special Administrative Region of the People's Republic of China
25th Floor, Government Headquarters, 2 Tim Mei Avenue, Tamar, Hong Kong
January 13, 2021
To: Mr. Paul Chan Mo-po, Financial Secretary, GBS, MH, JP
Opposition to the Proposed Increase in Stamp Duty on Stock Transactions
Dear Mr. Chan,
We are writing to express our association's strong opposition to the recent proposal discussed in media interviews regarding the increase of stamp duty on stock transactions.
We wish to remind you that during Mr. Tung Chee-hwa's administration as Chief Executive, the minimum commission structure for stock trading was eliminated, allowing brokers to set their commission rates below 0.25% freely, alongside a commitment to reduce stamp duty. Unfortunately, this commitment was never fulfilled. The current proposal to increase stamp duty will significantly hinder stock trading volumes and adversely affect the earnings of securities brokers and professionals. Since the removal of the minimum commission, many in the industry have experienced substantial income declines or have been forced out of business. This proposed increase would undoubtedly lead to job losses and erode brokers' confidence in investing in Hong Kong.
The volume of market transactions is crucial for maintaining a robust financial environment. A healthy trading volume is essential for stocks to effectively raise capital, while high transaction density encourages active buying. Conversely, low trading volumes can negatively influence financing capabilities. An increase in stamp duty would inevitably impact investors globally, including those based in Hong Kong, compromising the dynamism of our stock market and threatening Hong Kong's status as an international financial hub.
Should you have any questions regarding this correspondence, please do not hesitate to reach out to Mr. Chan Chi-wah, Industry Liaison Officer, at 6102-9568.
Wishing you a peaceful winter season.
Sincerely,
The Council of Hong Kong Securities and Futures Professionals Association
Email: fso@fso.gov.hk
Financial Secretary
Government of the Hong Kong Special Administrative Region of the People's Republic of China
25th Floor, Government Headquarters, 2 Tim Mei Avenue, Tamar, Hong Kong
January 13, 2021
To: Mr. Paul Chan Mo-po, Financial Secretary, GBS, MH, JP
Opposition to the Proposed Increase in Stamp Duty on Stock Transactions
Dear Mr. Chan,
We are writing to express our association's strong opposition to the recent proposal discussed in media interviews regarding the increase of stamp duty on stock transactions.
We wish to remind you that during Mr. Tung Chee-hwa's administration as Chief Executive, the minimum commission structure for stock trading was eliminated, allowing brokers to set their commission rates below 0.25% freely, alongside a commitment to reduce stamp duty. Unfortunately, this commitment was never fulfilled. The current proposal to increase stamp duty will significantly hinder stock trading volumes and adversely affect the earnings of securities brokers and professionals. Since the removal of the minimum commission, many in the industry have experienced substantial income declines or have been forced out of business. This proposed increase would undoubtedly lead to job losses and erode brokers' confidence in investing in Hong Kong.
The volume of market transactions is crucial for maintaining a robust financial environment. A healthy trading volume is essential for stocks to effectively raise capital, while high transaction density encourages active buying. Conversely, low trading volumes can negatively influence financing capabilities. An increase in stamp duty would inevitably impact investors globally, including those based in Hong Kong, compromising the dynamism of our stock market and threatening Hong Kong's status as an international financial hub.
Should you have any questions regarding this correspondence, please do not hesitate to reach out to Mr. Chan Chi-wah, Industry Liaison Officer, at 6102-9568.
Wishing you a peaceful winter season.
Sincerely,
The Council of Hong Kong Securities and Futures Professionals Association