THE Hongkong Futures Exchange is trying to stop spiralling prices of its seats after reports that a foreign brokerage has been forced to pay $1.2 million to start trading - a price more than double that paid just three months ago. Futures exchange chief executive Gary Knight said yesterday that too many of the seats were inactive and the exchange wanted to use its powers to ''free up'' these seats. Mr Knight said the exchange did not know the price of the last seat to change hands, but he was worried that rising prices would discourage new entrants. Sources said the foreign brokerage bought the seat from an inactive member or one in liquidation a few weeks ago, and that other foreign brokerages were in the market. Bob Nagel, regional chief operating officer for Salomon Brothers, said his company bought a seat in early March at ''less than half'' the $1.2 million believed to be the last price paid. ''At this level you're still not talking about a lot of money if you convert it into [US] dollar terms,'' he said. ''But if it keeps on escalating, it could be difficult.'' Some of Salomon's US rivals were not convinced of the viability of the territory's futures exchange, and would be discouraged by a big price tag. A seat on the exchange gives direct access to the market and is effectively a share in the company that runs the exchange. The exchange has 192 shareholders holding 228 shares between them. However, 29 holdings are classed as suspended, for reasons such as the holder having gone out of business. There are 68 inactive shareholders, leaving 95 actively trading. Mr Knight said the exchange wanted to find ways to ease the supply of seats, although it had not decided how to do so. If the $1.2 million deal goes through, seat prices in the futures exchange will be rising faster than those on the stock exchange. Seats on the stock exchange have tripled in value in the past 12 months. In 1973, at the biggest growth time of Hongkong's biggest speculative bubble, a seat on one of the territory's four stock exchanges changed hands for $2 million - equivalent to about $30 million at current prices.