Does the SFC really need 841 staff, each earning an average HK$1.3m annual salary?

Bloated payrolls and mission drift at Hong Kong’s securities regulator suggest an overhaul is due

PUBLISHED : Wednesday, 13 July, 2016, 8:45am
UPDATED : Wednesday, 13 July, 2016, 11:02pm

The Securities and Futures Commission (SFC) today published its Annual Report 2015-16.

SFC announcement, June 22

Ho-hum, say you. Ho-hum, say I. Why bother when it’s just a long slog of text with pictures of smiling people to tell you how good an d kind our SFC is, and caring of the environment, too.

But an annual report also has to contain some numbers. Here is the news and the theme continues to be one of profligacy. This extra-judicial government agency now employs 841 people and pays them an average of more than HK$1.3 million a year each.

That’s one million and three hundred thousand dollars a year.


Averaged cross 841 staff members!

Actually about a quarter of them are support staff who are probably paid more than their counterparts in other offices but still much less than the 650 so-called professionals.

Which suggests that these so-called professionals are probably paid more than HK$1.5 million a year.


And if you wonder why I use the term “so-called” of them then explain to me what all these people do. Our government generally believes in overstaffing its agencies but at the SFC it is getting ridiculous.

Our Securities and Futures Ordinance badly needs rewriting to bring the SFC back in line

To put it into further perspective, the first chart shows you that average pay at the SFC now runs at three times the average for professionals in Hong Kong, more yet if you adjust the figures to take in only the professional element of the SFC staff. In percentage terms pay increases at the SFC consistently ring the bell at the top of the scale.

Yes, I know that the only honest survey ever done of civil service pay also showed that it ran at about three times the private sector equivalent and the civil service then made sure that no honest survey was ever done again. This is not just a survey, however. This is an audited set of accounts.

With these kinds of costs it should not surprise you to learn that, despite dunning investors for HK$1.47 billion through a stock exchange levy to cover its costs, the SFC could register a surplus of only HK$36 million for the year to March 31.

The second chart shows that even this surplus was achieved only because turnover on the market was a record of HK$24.9 trillion for the year.

And the stippled line shows you where turnover is headed this year judging by the first three months. It would be no more than HK$15 trillion and that will result in an SFC deficit well up into three figures to the left of the decimal.

But it is not just cost indiscipline that characterises this bunch. The conceit of these people has grown so huge that recently they fined Moody’s for publishing a negative opinion on some mainland stocks because they didn’t like the argument.

Unable to restrain their self-awarded pay or staff numbers, lacking any respect for freedom of speech in their quest for ever more power, here we have Hong Kong’s single greatest threat to civil liberties.

Our Securities and Futures Ordinance badly needs rewriting to bring the SFC back in line.