Response from the Hong Kong Securities and Futures Professionals Association Regarding the SFC's Decision to Reinstate Annual License Fee Collection
Release Date: 2025-03-14
March 14, 2025
The Hong Kong Securities and Futures Professionals Association expresses profound disappointment and grave concern over the Securities and Futures Commission's (SFC) decision to reinstate the collection of annual license fees starting April 1, 2025. This decision, given Hong Kong's current fragile economy, a financial sector that has yet to rebound, and ongoing corporate layoffs, places an additional strain on the industry.
While the SFC references Section 138 of the Securities and Futures Ordinance to justify this action, it is essential to recognize that the ordinance's enforcement should reflect the current industry conditions. Financial institutions are currently grappling with challenges such as declining profits, escalating costs, and a loss of talent. The imposition of annual fees will further burden small and medium-sized intermediaries and licensed professionals, potentially pushing some to downsize or exit the market, thereby weakening the industry's vitality.
Compounding the issue is the SFC's public disclosure in November 2023 of its robust financial standing, including property acquisitions and recent salary increases for employees. If the regulatory body enjoys financial stability yet chooses to resume fee collection during challenging times for the industry, this decision not only shows a lack of empathy but also contradicts the public duty of "weathering the storm with the industry."
HKSFPA urges the SFC to reconsider this policy and proposes the following actions:
1. Postpone Implementation: The reinstatement of annual fee collection should be postponed until a clear economic recovery is evident, or at least a transitional exemption should be offered to small and medium-sized institutions.
2. Transparency in Financial Use: Clearly articulate how the license fees will be used to ensure they genuinely contribute to enhancing regulatory efficiency and supporting industry development, rather than covering unnecessary expenses.
We reiterate that regulatory bodies should focus on supporting the industry and maintaining market confidence. If the SFC proceeds with this plan, it may provoke backlash from the industry, which could harm Hong Kong's long-term competitiveness as a global financial hub. We call on the authorities to heed the industry's concerns, demonstrate flexibility and responsibility, and collaboratively create conditions conducive to market recovery.
Mofiz Chan
Chairman
Hong Kong Securities and Futures Professionals Association
The Hong Kong Securities and Futures Professionals Association expresses profound disappointment and grave concern over the Securities and Futures Commission's (SFC) decision to reinstate the collection of annual license fees starting April 1, 2025. This decision, given Hong Kong's current fragile economy, a financial sector that has yet to rebound, and ongoing corporate layoffs, places an additional strain on the industry.
While the SFC references Section 138 of the Securities and Futures Ordinance to justify this action, it is essential to recognize that the ordinance's enforcement should reflect the current industry conditions. Financial institutions are currently grappling with challenges such as declining profits, escalating costs, and a loss of talent. The imposition of annual fees will further burden small and medium-sized intermediaries and licensed professionals, potentially pushing some to downsize or exit the market, thereby weakening the industry's vitality.
Compounding the issue is the SFC's public disclosure in November 2023 of its robust financial standing, including property acquisitions and recent salary increases for employees. If the regulatory body enjoys financial stability yet chooses to resume fee collection during challenging times for the industry, this decision not only shows a lack of empathy but also contradicts the public duty of "weathering the storm with the industry."
HKSFPA urges the SFC to reconsider this policy and proposes the following actions:
1. Postpone Implementation: The reinstatement of annual fee collection should be postponed until a clear economic recovery is evident, or at least a transitional exemption should be offered to small and medium-sized institutions.
2. Transparency in Financial Use: Clearly articulate how the license fees will be used to ensure they genuinely contribute to enhancing regulatory efficiency and supporting industry development, rather than covering unnecessary expenses.
We reiterate that regulatory bodies should focus on supporting the industry and maintaining market confidence. If the SFC proceeds with this plan, it may provoke backlash from the industry, which could harm Hong Kong's long-term competitiveness as a global financial hub. We call on the authorities to heed the industry's concerns, demonstrate flexibility and responsibility, and collaboratively create conditions conducive to market recovery.
Mofiz Chan
Chairman
Hong Kong Securities and Futures Professionals Association