PAYMENTS between fund management companies and brokerages will come under scrutiny as part of a new code of conduct being prepared by the Securities and Futures Commission. The SFC will look at rebates and so-called ''soft dollar'' payments between the management companies and broking houses acting for the companies. Authorities are concerned the payments could be seen as hidden charges on funds. Under the payment system, a fund management company may accept a rebate on a commission which it pays to a broking house. Authorities will look into whether the commission rate is pumped up to allow for a rebate and whether the fund has to stump up the cash for the commission. Soft dollar payments are paid in services rather than money and is a more difficult area to regulate, according to the SFC. A consultation document will be sent to interested parties within three months. It is aimed at management companies operating Hong Kong-authorised funds. The code will be one of the final steps taken by the SFC to formalise its codes of ethics among Hong Kong's financial practitioners in the wake of a comprehensive review in the late 1980s. The Securities Review Committee report was published in 1988 in response to the closure of the Stock Exchange in the October crash of the previous year and corruption trials involving members of the exchange. The review made more than 240 recommendations including a series of codes of conduct to cover the securities market. According to Wesley McDand, of the SFC, the codes of conduct are a method of formalising the SFC work. ''Obviously we have been closely watching and regulating the markets; making sure people are fit and proper to run a financial operation. The codes have just formalised the whole process,'' he said. The review in the 1980s provided Hong Kong regulatory authorities with a blueprint for reform. ''Most of the codes are fairly standard. There is nothing new in many of them,'' he said. The SFC late last week released its code of conduct for securities and futures dealers and advisers.