Stock exchange council members and the Hong Kong Stockbrokers Association have called for the Government to review the exempted-dealer system. They claimed yesterday it created unequal treatment of banks and brokers. At present, banks trading in securities are exempted dealers in that they do not need licences from the Securities and Futures Commission (SFC) as stockbrokers do. Brokers have complained the system is unfair, and their discontent has escalated with Tracker Fund sales. Stock exchange council member Christopher Cheung Wah-fung said banks were not required to follow the SFC's 0.25 minimum commission rule. Therefore, banks could rebate all of their 2.5 per cent commission to Tracker Fund investors, while stockbrokers could only rebate up to 2.25 per cent as they needed to follow the 0.25 per cent minimum commission rate. 'It allows the bank to be able to offer better terms to the clients than the stockbrokers,' Mr Cheung said. Hong Kong Stockbrokers Association chairman Paul Fan Chor-ho urged the Government to abolish the exempted-dealer category. 'The exempted-dealer category shouldn't have existed,' Mr Fan said. 'We [stockbrokers and exempted dealers] are in the same business, therefore we should be subjected to the same set of regulations.' A Finance Services Bureau spokesman defended exempted dealers, claiming they were regulated by the Hong Kong Monetary Authority (HKMA), which applied the same rules as the SFC imposed on brokers. She said if banks were required to report to the SFC, it would duplicate regulation, involving both the SFC and the HKMA. Legislator Fung Chi-kin said the Tracker Fund issue was only 'an individual incident', and claimed there was nothing wrong with the exempted-dealer system.