Lawmakers criticise proposed pay increases for regulators

Plans to reward financial regulators with higher salaries have attracted the ire of lawmakers, who complain their performance in the minibond fiasco does not warrant the increases.

The Hong Kong Monetary Authority plans to give staff an average 4.5 per cent pay rise from April 1 while the Securities and Futures Commission budget submitted to the lawmakers earlier this week shows it is preparing to give its staff an average 5 per cent pay rise this year.

The HKMA will also give variable pay, similar to a bonus in the private sector, averaging 2.6 months of salary according to staff performance.

'I think both the HKMA and the SFC pay increases are too high,' said Democratic Party legislator Kam Nai-wai. 'I do not think the staff of the HKMA or the SFC are doing a good job, particularly the way they handled the Lehman minibond fiasco. According to their performance, I do not think they deserve a pay rise.'

More than 30,000 investors suffered losses after they were allegedly misled by banks or brokers' staff to buy so-called minibonds, or structured products issued or guaranteed by Lehman Brothers. When the US investment bank collapsed in 2008, the products became worthless.

Legislator Chim Pui-chung, for the financial services sector, also criticised the pay increases. 'Both the HKMA and the SFC have been very highly paid, and they have no strong need to have a pay rise matching inflation as they are not low-income earners,' Chim said. 'Many investors are not happy with the Lehman minibond fiasco and this shows both HKMA and the SFC have failed in their duties.'