FIRST, we agree the rebate debate is about Hong Kong's competitiveness.
It's about a free and open market where managers negotiate fair fees with clients, and then collect only those fees, not adding unlimited kickbacks from vendors with whom managers are spending the clients' money.
It's about the sun setting on the days of a clubby but small market, where colonial cartels dictated anti-competitive practices not tolerated in their home markets.
In short, anyone committed to Hong Kong agrees that this market's size, international reputation and the money-making opportunities it offers, have all soared with the Securities and Futures Commission's and the exchange's efforts to bring Hong Kong's practices more in line with global standards.
Second, managers generally charge clients a standard disclosed fee to manage unit trusts. They charge this whether or not they take rebates on top of the disclosed fee.
So we are baffled by suggestions that investors would pay more if rebates were banned. In fact, they'll likely pay less, and this is what worries some managers.
Third, Jardine's veiled threat of fund managers leaving Hong Kong if kickbacks are banned is silly. Where will they flee? The shortlist of jurisdictions tolerating kickbacks, and managers who accept them, shrinks further each year.