Securities and Futures Commission deputy chairman Laura Cha Shih May-lung has added fuel to the controversy about Tracker Fund commissions by indicating a minimum commission for brokers on share transactions might not be necessary. In a discussion with reporters yesterday, Mrs Cha said changes might be needed in the stock exchange's minimum-commission rule, in response to a question of whether such a commission should exist. 'After the merger of the two exchanges [in January], some rules and regulations . . . such as for a minimum commission . . . may need to be changed.' At present, brokers receive a minimum commission of 0.25 per cent on each share transaction. The Government has long wanted to abolish the minimum-commission rule to lower the costs of securities transactions and so enhance the market's competitiveness. At a listing ceremony yesterday, stock exchange chief executive Alec Tsui Yiu-wa also said the minimum commission rule should be subject to some adjustments 'in the long run'. A stock exchange source added that 'sooner or later, the minimum commission for brokers will be abolished, as they have been facing stiff competition from all fronts'. However, brokers said the minimum commission should not be scuttled, as it was established to protect the earnings of small brokerages. Tong Leung-sang, president of Hong Kong Securities Professionals' Association, said that brokers had already rejected proposals by the Government to relax the minimum-commission requirement. Mr Tong said small brokers would face cutthroat competition without the minimum commission, and some would even be forced to shut down. Brokers also criticised stock exchange and SFC officials for informing investors this week they could ask for rebates from brokers in Tracker Fund transactions. Many brokers have had to cut their commission on their Tracker Fund sales to bring in retail business. The rebate effectively means they have given up not only their 1 per cent brokerage fee from their clients but also a large part of their 1.75 per cent commission from Exchange Fund Investment. 'Brokers use their 2.75 per cent commission minus 0.25 per cent minimum rate, making them give as much as 2.5 per cent to clients,' a broker said. Brokers said the rebates for the Tracker Fund posed a serious threat to the safeguard system created by the minimum commission. 'Now all investors know they can negotiate with brokers for a rebate on share transactions,' a broker said. Some banks and big brokerage houses have said they are offering up to 2.25 per cent to lure investors interest in the Tracker Fund. As a result of this development, some disgruntled small brokers are threatening to boycott the fund. Mr Tong said: 'The Tracker Fund is just changing the rules of the game. 'The consequences could be immense.'