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Enoch Yiu

The Securities and Futures Commission will consult the market this year on a review of the HK$8 million threshold that defines a professional investor, according to chief executive Martin Wheatley.
The Securities and Futures Ordinance defines 'professional investors' as those with a portfolio worth more than HK$8 million and at least  two years of investment experience.
'The definition of professional investors has been used for five years and there are calls for a review of the definition,' Mr Wheatley told legislators in the monthly financial  affairs meeting.
Legislators have called for a revision after receiving complaints about the so-called 'accumulators'  or high-risk derivatives products targeting professional investors that  do not require  SFC approval.
Some investors said their bankers considered them professional investors and sold them the accumulators just because their portfolios  totalled HK$8 million, even though they had no investment experience.
Legislator Chim Pui-chung, who represents brokers, said the threshold should be doubled to HK$16 million and that 'the SFC should pre-vet the products even if they are sold to professional investors'.
Meanwhile, Mr Wheatley, whose contract   will expire at the end of September, said he had not yet decided   whether to stay. The government has yet  to announce if it  will renew his  contract.
Mr Wheatley also said the SFC had approved relaxing the short-selling tick rule and its implementation was up to the stock exchange.
A spokesman at  Hong Kong Exchanges and Clearing said it needed to work with the commission and consultinvestors on the timetable for the tick rule's relaxation.
'The SFC has approved the relaxation of the short-selling rule with a condition that it can reinstate the   rule whenever the commission  thinks it is dictated by market condition. We need to work out a mechanism  for reinstating the tick  rule before we can implement the rule change,' the HKEx spokesman said.
The tick rule  bans traders from short-selling below the best current asking price, a restriction that effectively bans short-selling during a falling market. The tick-rule restriction was imposed in August 1998 during the Asian financial crisis,  as part of government efforts to keep the market from crumbling under the pressure of hedge-fund speculators.



SFC to consult market in review of 'professional investor' definition