The price war among Hong Kong brokers is continuing, even though the abolition of the minimum commission fee has been postponed by a year to next April. The latest shot was fired by Taiwan-based KGI Asia. Vice-president Lisa Tong Yee-shann yesterday announced a one-month scheme offering special concessions for online trading clients. Under the scheme, online customers will enjoy a cash rebate of HK$500 on commissions by referring new clients to trade with the firm's Internet trading service. The new clients will receive a HK$200 rebate. KGI Asia, which charges online clients a commission of 0.15 per cent, was one of the first local brokerages to circumvent Hong Kong Exchanges and Clearing trading rules to charge less than the 0.25 per cent minimum rate. Firms are able to circumvent the rules by using a non-exchange party as an intermediary, which will cover the commissions a client should have paid. KGI Asia is not the cheapest broker in Hong Kong. South China Online claims its Internet brokerage arm SCtrade.com has been offering the cheapest price since last May. Its chief executive, Stewart Shing Shin-cheung, yesterday said the online arm recently extended last month's promotional scheme to the middle of this month. The scheme allows new clients who open an account with SCtrade.com, or existing clients who refer new customers to the firm, to trade with a 0.05 per cent commission for up to three months. 'We believe a low price is always an effective way to attract traders to trade online,' Mr Shing said. Unlike traditional brokerages which needed to hire additional account executives to serve new customers, online brokers could use the same electronic system no matter how many new clients they gained, which gave them more capability to cut prices, he said. SCtrade usually charges online clients a 0.125 per cent commission. Meanwhile, the price battle has extended to traditional brokers. SAR-listed Tai Fook Securities recently offered both online and offline clients a cash rebate of up to HK$1,000 if they established a securities account with the firm by the end of this month. Tai Fook usually charges online customers 0.15 per cent and offline clients 0.25 per cent commission. The price cutting indicates that although the Government has deferred its planned liberalisation of the local commission rate, it has failed to halt the price war among brokers. After strong protests by small brokers, the Government in January decided to postpone by a year the abolition of the fixed-commission fee, which should have ended on Monday. However, a low commission fee is not necessarily a formula for success. For example, Charles Schwab, 2Cube Securities and Hutchison CSFBdirect all tried to lure traders by offering a commission lower than the 0.25 per cent minimum rate. Late last year, Charles Schwab closed its SAR stock-trading operation, while 2Cube was forced to close and sell its customers to E*Trade Hong Kong in December. Meanwhile, Hutchison CSFBdirect announced last month that it had sold its operations to BOC International, the investment banking arm of the Bank of China Group.