Occupy Central

Stock exchange aims to ensure Occupy Central will not halt trading

Stock exchange and brokerage houses are working hard to ensure that the local market will not be harmed by the planned protest by Occupy Central

PUBLISHED : Friday, 29 August, 2014, 12:11am
UPDATED : Friday, 29 August, 2014, 9:50am

The city's stock exchange and 450 brokerage houses have been working closely to ensure that retail investors will be able to trade on the local stock market if a planned protest by Occupy Central blocks streets in the central business district.

Occupy Central with Love and Peace plans to gather outside the government headquarters in Tamar on Sunday night, said co-organiser Benny Tai Yiu-ting. After that , "wave after wave of actions" would unroll if Beijing imposed restrictions on the city's 2017 elections that the group feels will restrict universal suffrage.

The group has vowed to block streets in the financial district, where the exchange trading hall, the Hang Seng Indexes company and most brokers work. The biggest challenge for firms will be ensuring staff can work - either at their offices or elsewhere.

Christopher Cheung Wah-fung, legislator for the financial services sector and chairman of Christfund Securities, one of the city's largest local brokers, said his firm and most others had prepared in accordance with the requirements of the Securities and Futures Commission.

"The regulator has asked all brokers to prepare for an emergency," he said.

That means that firms must have backup offices or other arrangements in case brokerage staff cannot reach their offices in Central. Brokers also need to give their mobile and home numbers to their customers to allow investors to make inquiries or place trading orders.

Investors rely on the Hang Seng Index so we have a contingency plan in place

Cheung said most brokers did not want to see a protest occur in case it affected stock market turnover, which averages more than HK$70 billion a day.

"A breakdown of stock market trading will hurt the international reputation of the local stock market, which is actively traded by many international investors. This will also tarnish the image of Hong Kong as an international financial centre.

"It will create inconvenience for investors while the brokers will lose their commission income and break their rice bowl. We oppose any movement that may be a threat to local stock market trading," Cheung said.

Some finance staff have expressed support for the protest. In April, a dozen hedge fund managers and stock brokers sent an open letter to President Xi Jinping demanding universal suffrage, while some pledged to join Occupy Central to paralyse the business district where their offices are based.

More than 200 stockbrokers joined a rally on August 17 to oppose Occupy Central, while thousands have signed a petition against the movement, Cheung said.

Jeffrey Chan Lap-tak, chairman of the Hong Kong Securities Association, said brokers in the city had experience of working during an emergency, citing the Sars outbreak in 2003, with many preparing a second office to keep their businesses going when the epidemic hit.

A spokesman for Hong Kong Exchanges and Clearing said it took contingency planning seriously. "We have long had a specialist team that coordinates group response plans for scenarios that put at risk the continuing operation of the exchange or threaten the wellbeing or safety of our staff," the spokesman said.

Vincent Kwan, the director and general manager of Hang Seng Indexes, which compiles the city's benchmark stock index, said the company had a backup system and backup office in case of a major system breakdown or other sudden events.

"Our company conducts drills regularly to make sure our backup system and emergency plan works well," he said.

"Many investors and products rely on the Hang Seng Index so we have a contingency plan in place to make sure our services will not be broken."

Hong Kong Monetary Authority chief executive Norman Chan Tak-lam has said that the de facto central bank will monitor all banks to see they are sufficiently prepared for a disruption. The HKMA conducted a drill with 55 banks in June.