The discussion regarding the abolish of the minimum stock brokerage commission framework was held at the Financial Affairs Panel of the Legislative Council. [CB(1)1248/02-03(01)] March 28, 2003
Release Date: 2003-01-24
Reference: SC20030124/1023
January 24, 2003
Summary of Written Statement
Financial Services and the Treasury Bureau, Securities and Futures Commission, Hong Kong Stock Exchange Task Force:
The recent decision to abolish the minimum commission was primarily a response to public dissatisfaction, prompting the creation of a task force to explore methods for bolstering the competitiveness of small and medium-sized brokerage firms. The Hong Kong Securities and Futures Workers Union contends that eliminating commissions is not an appropriate strategy to rejuvenate the financial sector at this time. Instead, it could result in market disorder. Large enterprises may not gain significant advantages, whereas smaller firms are likely to face immediate challenges. Recently, there have been layoffs within some securities firms, and brokers are hastily exiting the industry, signaling an impending tumultuous period. Consequently, our union seeks to address several concerns and offer recommendations, urging financial authorities to consider the following:
1. The task force should present concrete data justifying the removal of the minimum commission, confirming that Hong Kong's commission rates surpass those of other markets, thus supporting the official stance.
2. Immediate solutions are needed as many professionals are already struggling with insufficient income, and the removal of commissions will exacerbate this issue. Can the task force ensure a minimum income guarantee for these practitioners?
3. The Hong Kong Securities and Futures Workers Union insists that the task force dedicated to aiding small brokers should include representation from our union to demonstrate genuine commitment from the authorities.
4. Our union advocates that, in the short term, efforts should focus on stabilizing the market and boosting trading activity before addressing medium- to long-term development plans, such as the introduction of new products and other strategic issues.
Acted by Tse Kam Yip
Secretary General
Hong Kong Securities and Futures Staff Union
January 24, 2003
Summary of Written Statement
Financial Services and the Treasury Bureau, Securities and Futures Commission, Hong Kong Stock Exchange Task Force:
The recent decision to abolish the minimum commission was primarily a response to public dissatisfaction, prompting the creation of a task force to explore methods for bolstering the competitiveness of small and medium-sized brokerage firms. The Hong Kong Securities and Futures Workers Union contends that eliminating commissions is not an appropriate strategy to rejuvenate the financial sector at this time. Instead, it could result in market disorder. Large enterprises may not gain significant advantages, whereas smaller firms are likely to face immediate challenges. Recently, there have been layoffs within some securities firms, and brokers are hastily exiting the industry, signaling an impending tumultuous period. Consequently, our union seeks to address several concerns and offer recommendations, urging financial authorities to consider the following:
1. The task force should present concrete data justifying the removal of the minimum commission, confirming that Hong Kong's commission rates surpass those of other markets, thus supporting the official stance.
2. Immediate solutions are needed as many professionals are already struggling with insufficient income, and the removal of commissions will exacerbate this issue. Can the task force ensure a minimum income guarantee for these practitioners?
3. The Hong Kong Securities and Futures Workers Union insists that the task force dedicated to aiding small brokers should include representation from our union to demonstrate genuine commitment from the authorities.
4. Our union advocates that, in the short term, efforts should focus on stabilizing the market and boosting trading activity before addressing medium- to long-term development plans, such as the introduction of new products and other strategic issues.
Acted by Tse Kam Yip
Secretary General
Hong Kong Securities and Futures Staff Union