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Enoch Yiu

HSBC will provide online stock trading services by the end of the year, adding another level of competition for Hong Kong's 500 stockbrokers.

Meanwhile, Charles Schwab, the world's largest online broker, today opens its first walk-in branch in Hong Kong, as it prepares for the start of its online trading operation next month.

Their entrance into the local securities market is set to further erode the market share of traditional stockbrokers.

On Monday, Hong Kong Exchanges and Clearing successfully launched the third generation of its stock trading system, known as Automatic Order Matching and Execution (AMS/3).

In three weeks, the exchange will begin to introduce the system's online function. HSBC and Charles Schwab are among the 40 brokers initially selected to conduct online trading.

In January, 200 brokers will join them in offering trading services via the Internet.

AMS/3 will allow investors to use their personal computers or mobile phones to place orders to the exchange.

This differs from the older AMS/2 system that required investors to telephone orders to brokers, who would then execute the trade manually.

The present online trading platform still needs brokers to input trades by hand.

'AMS/3 will allow us to introduce more automatic Internet trading services. We consider this the right time to launch online trading services for our clients,' said Dorothy Sit Yin-ping, HSBC head of saving and investments, personal financial services.

In August, HSBC launched its Internet banking services which offered online stock trading for select clients.

Ms Sit said 70,000 clients had used the service, with 10,000 actively trading stocks.

HSBC's services are available to any client with a savings account, credit card or personal loan  - at a commission rate of 0.25 per cent.

Ms Sit did not say how many clients the bank has, but it is believed to be in the millions.

Legislator Henry Wu King-cheong, who represents brokers, said HSBC's entry would be a threat to the 200 brokers launching in January.

Mr Wu said the 300 remaining brokers would not be affected as their clients appeared not to use the Internet to conduct trades.



HSBC to launch online trade by year end