Stockbrokers yesterday called for the government to abandon its plan to scrap the minimum brokerage commission. The call came as the heads of the four stockbroker industry bodies and legislator Henry Wu King-cheong met Hong Kong Exchanges and Clearing chairman Charles Lee Yeh-kwong. Previously, brokers had said the plan should be delayed until market turnover improved. Hong Kong Stockbrokers Association chairman Wilfred Wong Wai-sum said the minimum commission should be kept to provide security for the industry and a further one-year delay was not good enough. 'The minimum brokerage commission is the safety net to prevent a price war among brokers which would cause the smallest players to collapse,' he said. Mr Wong said as long as the exchange still had plans to abolish the minimum commission, brokers would not have the confidence to continue their operations and would opt to shut up shop. Apart from Mr Wong, the other industry leaders at yesterday's meeting were Hong Kong Institute of Securities Dealers chairman Chen Po-sum, Hong Kong Securities Professionals Association chairman Trini Tsang Chi-suen and Hong Kong Securities and Futures Industry Staff Union president David Wong Kwok-on. Wilfred Wong also gave the message to deputy secretary for Financial Services and the Treasury Au King-chi at another meeting yesterday. In the first nine months of this year, 51 brokers and investment advisers closed their doors, while a further 35 told the Securities and Futures Commission that they planned to quit. 'To save the industry and to rescue people's jobs, the government and the exchange should completely give up the plan to scrap the minimum brokerage commission,' Mr Wong said. HKEx chairman Mr Lee told the brokers he would report their concerns to the board of the exchange and the government for consideration. Mr Wong reported that Ms Au had also said the government would consider the brokers' concerns. Last December, the government delayed the planned scrapping for a year, putting it off to April 1 next year because of fears the move would lead to job losses. Brokers have warned that the removal of the 0.25 per cent minimum stock trading commission would bring about the collapse of more than 200 brokerages. They said this meant 7,500 people could lose their jobs and be forced to leave the industry. Mr Tsang said banks should also comply with the 0.25 per cent minimum brokerage commission. As the banks are not members of HKEx, they do not need to comply with the rule. The brokers also called yesterday for banks to be covered by the same regulator as themselves. At the moment the banks' securities business is regulated by the Hong Kong Monetary Authority and not the SFC, which regulates brokers.
