'Although I am not going to be a member of the stock exchange council, I will keep very close contact with other council members,' he said.

'I will not change my commitment to serve the broking community.' Last week, Mr Fung was elected unopposed in a by-election to replace jailed former legislator Chim Pui-chung to represent the Legco financial services functional constituency.

Mr Fung was also one of three candidates for two vacancies in the group A category of brokers - the top 14 brokers in the exchange - in the stock exchange council election.

His unexpected withdrawal leaves the way clear for the other two candidates - David Roberts of ABN Amro Asia Securities (Hong Kong) and Patrick Sun of Jardine Fleming - to win seats on the council.

Mr Fung said he was also concerned that the exchange would allow each broker to have only one representative on the council.

Tai Tak-hing, deputy general manager of Bank of China Hong Kong branch, is an appointed independent council member.

It is understood either Mr Fung or Mr Tai would have had to step down, had Mr Fung been elected.

'I think it is good enough to have Mr Tai to represent Bank of China's opinion in the council,' Mr Fung said.

'My withdrawal from the council election will also allow me to concentrate on preparation of Legco work.' He said he would continue his work in Bank of China Securities even though he would be spending a lot of time in Legco.

'I am the Legco representative for brokers - of course I have to work in a brokerage firm,' he said.

Other brokers said Mr Fung's move might help him to avoid conflicts of interest.

'I think he is going to be the legislator for stockbrokers, futures trading and bullion dealers,' one broker said.

Mr Fung is a former stock exchange vice-chairman.