Brokers' groups unite to form panel in compensation drive
The three bodies represent ing stockbrokers have formed a joint working group to give them a unified voice in negotiations over the Government's radical market reform plans.
The group will negotiate terms and conditions with the Government, whose controversial reforms will demutualise and merge the stock and futures exchanges with their three associated clearing houses.
The Hong Kong Stockbrokers Association, the Institute of Securities Dealers and the Hong Kong Securities Professionals Alumni Association represent nearly all the SAR's 500 brokerages.
The working group has 11 members drawn from representatives of the three organisations, including Dannis Lee Jor-hung, Choi Chen Po-sum, Christopher Cheung Wah-fung and Yue Wai-keung.
'Currently stock brokers have many different opinions on the proposed market reforms,' a member of the group said.
'The joint working group aims at gathering the various concerns of all the 500 brokers, and then will unify them into some simple and strong key points.
'This will be a more effective way to negotiate with the Government rather than allowing 500 brokers to give 500 different statements.' Under the Government's proposals, the combined exchange would be listed on the stock market in September next year.
To go ahead, the reforms need the support of 75 per cent of both the 500 stock brokers and the 130 futures brokers in a vote to be held in August.
The working group hopes to seek a solution to divisions between brokers and the Government, especially on the issue of compensation.
Brokers have demanded the Government offer cash or other forms of compensation for potential losses they will suffer due to the moves.
The reforms will separate trading rights from membership. As a result, exchange membership - which is valued at $5 million - will become worthless.
The reforms will also remove a cap of the number of local brokerages, sparking fears that an influx of big brokerages will force small players out of business.
The Securities and Futures Commission has refused to offer any compensation to brokers for the loss of value of the membership.