Regulators, brokers and fund managers are working feverishly to prepare for the soon-to-be implemented new law aimed at tightening Hong Kong's securities regulations. The Securities and Futures Ordinance, to become effective from April 1, is the most important piece of financial legislation in the history of Hong Kong. It replaces the 10 existing securities laws. A major part of the new law is to introduce regulations and licences covering brokers, fund managers and banks' securities business. Securities and Futures Commission (SFC) executive director Alexa Lam said the commission would implement many measures this month to help brokers, fund managers, financial advisers and investors prepare for the new regulations. 'There are a lot of changes in the new legislation and we would like to help the market avoid chaos,' she said. 'All intermediaries will need to apply for new licences and some will need to increase their financial positions to meet the capital requirement. This cannot be done overnight and the market should prepare early.' Mrs Lam said the SFC would hold a large-scale question and answer session, at a place to be determined, to allow interested parties to express their concerns. The commission has already held 50 seminars on the new law, with 11,245 people attending. In the next few days, the SFC will issue a 200-page guideline on transitional arrangements covering the new regulation. It will also issue a new regulatory handbook next month and will have relevant information on its Web site. Separate guidelines on the new fee structure imposed on brokers and fund managers will also be issued. Under the new law, brokerage houses will be required to have two responsible officers to ensure the companies are complying with all regulations. Brokers will need to have a single licence to replace their existing multi-licences, for which they have two years to apply. 'The new licences will not incur additional fees during the transitional period,' she said. Mrs Lam also said non-bank exempt dealers, who were custodians or trustees, need to be licensed with the SFC under the new law. At present, these institutions and banks are exempt dealers and are not regulated by the SFC. The exemptions status will be abolished with the introduction of the new law. Bank securities staff will be regulated by the Hong Kong Monetary Authority in the same way the SFC regulates brokers. The HKMA issued guidelines to banks last Friday relating to the new law. Banks will all need to register their securities staff with the HKMA this month. The HKMA circular said banks also need to register staff selling investment-linked insurance products as well as those giving investment advice on the Mandatory Provident Fund. The Hong Kong Investment Funds Association executive director Sally Wong said the fund industry had been actively preparing for the new law. 'We are working closely with the SFC on a number of issues to ensure smooth implementation as there are areas that need clarification and adjustment,' she said. 'We would hope that the unique characteristics of the fund-management business can be fully taken into account, since most funds are domiciled offshore and invested globally.' Hong Kong Stockbrokers Association chairman Wilfred Wong Wai-sum said brokers were concerned about the operating requirements of the new law, and hoped the SFC would be flexible during the introduction period.