Online brokerage Boom Securities expects to acquire a seat on Hong Kong Exchanges and Clearing before the end of the year as part of a move to raise its profile. 'Most of the [transaction] is in place already,' director of business development Adam Bornstein said of the negotiations. Seats on the exchange can be acquired from other brokers for between HK$2.5 million and HK$4 million. To execute trades, Boom has to pay part of the fees it charges clients to brokers who are members of the exchange. This will end once it acquires a seat. 'Currently we share commissions with the brokers whereas [with a seat] we will keep all the commissions on board,' Mr Bornstein said. Online brokers Charles Schwab and TD Waterhouse have already acquired seats on the exchange. Once a seat is acquired, Boom's clients will be covered by the Unified Exchange Compensation Fund in the event of the brokerage collapsing. Only clients of brokerages with seats on the exchange are entitled to compensation from the fund. However, Boom intends to set up its own insurance scheme for investors to complement the existing one run by the regulators. 'It is a statement to our clients - we want to be able to support them from our own means and not rely on the Government,' Mr Bornstein said. Boom's plan to set up its own compensation fund follows the announcement by Taiwan-based KGI Asia, which does not hold a seat on the exchange, that it was setting up a HK$20 million investor insurance programme. However non-exchange brokers will be covered by the exchange's compensation scheme when the Composite Securities and Futures Bill becomes law, the Secretary for Financial Services Stephen Ip Shu-kwan said in June. The bill is expected to go before the Legislative Council this year. KGI Asia will rely on the regulators' investor protection scheme once it is in place but will examine if it can provide additional insurance, according to one director. 'We will look at the situation and see whether some other form of investor protection can provide additional comfort,' said KGI Asia director Anthony Yung.