FIDELITY Investments, the largest independent fund manager in the world, has placed itself firmly behind plans to ban rebate commission in Hong Kong. Speaking at a company investment seminar yesterday, its chief investment officer for Southeast Asia, William Ebsworth, said: ''We do not take rebates. I am sorry if it sounds strong but this payment . . . is like taking a kick-back.'' Rebate commission involves a fund manager, looking after either a retail or institutional fund, taking a portion of the commission earned by a broker when executing orders for the broker. This payment is in addition to the levy taken by the manager in annual management fees or performance fees. ''We believe in clean fees and that is it,'' said Mr Ebsworth. Rebate commission involved some degree of conflict of interest, he said. A clean fee fund manager is interested only in making as much money as possible for his client as his annual fund management levy is based on such activity. Fund managers accepting rebate commissions also have an incentive to actively trade their portfolios to generate income from the return of commissions incurred by the brokerage in executing orders from the fund managers. Regional marketing director Richard Wastcoat said: ''We are in favour of anything that benefits higher disclosure in the fund management industry.'' In investment terms, Fidelity said it favoured European and Japanese equities overall with a focus on Hong Kong and South Korean equities in the non-Japan Asia region. Total sales at Fidelity in the first half of this year were US$200 million, up 120 per cent. The group is one of the few managers with net sales for the period at US$83 million, compared with an industry net sales total of just $55 million. These figures indicate Fidelity might have for the first time overtaken arch-rival Jardine Fleming in new sales and net sales over the period. In 1990, the group pledged to overtake JF as the lead fund manager in the territory within the decade. In terms of funds under management and total number of clients, JF probably remains the industry leader.