Dear Sir, I read with great interest the article in today's Business Post (July 26) in which Jardine Fleming chairman Alan Smith derided the SFC for its attempts to ban the practice of unit trust funds collecting kickbacks from brokers. At one point, the article states that ''Mr Smith complained that the banning of rebate commissions was not called for by investors on the street''. I would like to let Mr Smith know that as one investor on the street, and a JF customer, I am calling for this practice to be stopped. In fact, I was extremely annoyed to learn that rebates which should be going back into the funds are instead being siphoned off into JF's own coffers. What they are doing amounts to little more than padding the expense accounts charged to the investment fund. The fund managers pay commissions to the brokers they use and then charge that amount to the fund as an operating expense. They then collect a kickback from the broker, which goes into their own pockets - not back into the fund. Since the value of an individual investor's holdings is based on the money in the fund, they are basically ripping off the consumer. I fail to understand how Mr Smith can defend such a practice, and think it is ridiculous for him to assert that banning it would hurt Hong Kong's competitive position among Asian markets. Imagine if I went to a restaurant, struck a deal with the manager that I would bring clients there on business lunches, pay full price for all my meals but then get some cash back under the table, keep that kickback money and submit bills for the full amount on my company expense accounts. Do you think I could justify this to my boss, or to the ICAC (Independent Commission against Corruption) for that matter? I can tell you one thing: if I were found to be doing this, I'd be hard-pressed to defend the practice, and certainly wouldn't have the chutzpah to assert that telling me to stop doing it would hurt my competitive position as a salesman. I think if the fund is getting a rebate on its expenses, that money should go back into the fund - not JF's own pockets. Mr Smith says that eliminating this practice would raise unit trust fees. Actually, consumers are already paying higher fees, the only difference is that the costs are hidden from the consumer. If the commissions JF charges are not high enough, they should raise them. That way at least the consumer will know how much he is paying. NEAL MCGRATH Business Post welcomes letters from readers. Correspondence should be addressed to The Business Editor, South China Morning Post, Tong Chong Street, Quarry Bay, Hong Kong.