The Securities and Futures Commission has proposed tightening regulations on brokers' handling of clients' money in a bid to enhance investor protection.
In a consultation paper released yesterday, the SFC suggested the time allowed for brokers to deposit clients' money in a trust account be reduced from four days to one day after the client's money is received.
'The shortened time limit can significantly reduce the exposure of clients' money that is not segregated,' the SFC paper said.
The SFC said some brokers are concerned one day would be insufficient time to segregate the money but the SFC disagrees.
'Having considered that only client money received in Hong Kong will be subject to this segregation requirement, the SFC thinks one day should be enough for transferring receipts from a non-designated account to a trust account,' the SFC said.
The SFC also proposed only clients' money received or held in Hong Kong be deposited into a trust account. At present, client money received or held outside Hong Kong is also required to be put into trust accounts.
