ADDING fuel to the latest debate on stock futures, the Hong Kong Stockbrokers Association has called on the Government to abort the introduction of the derivative product proposed by the Hong Kong Futures Exchange.
The association, which represents 400 stock exchange members, sent a letter to the Financial Secretary yesterday expressing concern, after calling a special council meeting on Wednesday.
Chairman Chu Chung-tin said the association had received many complaints from members. But it would not take further action until it had received a reply from the administration.
Echoing the criticism by legislative councillor Chim Pui-chung, Mr Chu said the current issue would not only affect the local securities industry, but it would cast adverse impact on the terrtory's status as an international financial centre.
The association also queried the Securities and Futures Commission's decision to approve stock futures without consultation at a time when the securities watchdog is studying measures to monitor and check the risks associated with derivatives.
'It is doubtful whether stock futures will become a hedging instrument because, as European-styled derivative products, they were settled in cash, without stocks as underlying assets,' he said.
Because of price fluctuations of the futures, it would bring unnecessary risks to the spot market, he added.