The government-funded Financial Dispute Resolution Centre will start operation from Tuesday, using mediation and arbitration for customers seeking claims of up to HK$500,000 against their banks or brokers.
'Mediation or arbitration is much cheaper and quicker for investors to solve their disputes with banks or brokers than taking the cases to the court. This is a win-win situation for both sides,' said barrister and centre chairwoman Teresa Cheng Yeuk-wah.
'We hope to use a better way to solve disputes than putting things to the court. The [centre] now provides a new alternative for investors to seek claims.'
The centre, which needed HK$15 million to set up and will cost HK$55 million a year to run, will be funded by the government, the Securities and Futures Commission and the Hong Kong Monetary Authority for its first three years and by financial institutions thereafter.
Barrister Sou Chiam is the centre's chief executive.
The decision to set up a resolution centre came in the wake of the Lehman Brothers minibond fiasco, in which more than 20,000 investors complained in late 2008 that they had been misled by banks and brokers into buying products linked to Lehman. Their investments became worthless overnight after the US investment bank collapsed in September 2008.
Minibond investors, however, will not be able to take their cases to the centre as it will only handle disputes that occurred within a year of the complaint.