White Collar | Hong Kong Exchange and Clearing should consider fund platform

While brokers have strongly demand the Hong Kong stock exchange launch a platform to trade fund products, that is obviously not a priority for the local bourse.

In fact, the exchange should really consider this new platform in light of the strong growth of the fund industry in the city.

Hong Kong Securities Association gave the proposal about half a year ago for the stock exchange to introduce a platform for investors to subscribe and trade fund products like stocks. The investors can trade the fund products with the 500 stockbrokers in the city.

This, according to stock brokers, is a win-win as brokers can get extra commission income while investors have a new channel to buy fund products.

Data from the Securities and Futures Commission showed 78 per cent of the fund products are sold through banks, while brokers now only represent 3 per cent and the rest is via internet and direct sales by fund houses.

The SFC chairman Carlson Tong Ka-shing late last year also voiced support to such an idea as a way to expand the local fund industry.

However, when Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia presented the three year strategic plan for the exchange last month, we did not see him put this item on the list.