COMPLAINTS of unfairness in the licensed leveraged foreign exchange trade have prompted the Securities and Futures Commission (SFC) to call on five unlicensed trader applicants to comply with new rules.
There are 36 licensed traders, but there are another five trader applicants who have been permitted under transitional arrangements in the relevant ordinance to carry on business pending the result of their applications.
There have been complaints that the applicants, yet to be licensed and governed by the new rules, have adopted lower margin requirements in a bid to lure business, allegedly disadvantaging licensed operators.
SFC acting chairman Michael Wu said the commission wrote to the five yesterday asking them to confirm that they were carrying on business in compliance with all the requirements under law, in order to assist the commission in assessing their applications.
'We are unlikely to be convinced that an applicant is fit and proper to be licensed if it deliberately ignored, or declined to comply, with applicable legislation and rules,' he said.
While the applications were being processed, the regulator was conducting a review of the rules and how licensed traders were running their business under the new regime.