UpdateSFC’s quarterly losses widen to HK$50.6 million, as market turnover tumbles
Despite the red ink, commission is still stepping up enforcement efforts to crack down on corporate fraud, says enforcement head Thomas Atkinson
Falling stock market turnover hasn’t just been bad news for brokers, but also for the regulator, judging by its latest set of results.
The Securities and Futures Commission revealed on Thursday it recorded a HK$50.58 million loss for the quarter to the end of September, compared with a loss HK$31.46 million a year earlier.
It blamed the latest loss on a 30 per cent year-on-year decline in fee income, down to HK$263.76 million as market turnover slumped.
The SFC collects transaction fees from investors on shares transactions, so its income is directly linked to market turnover. Average daily turnover in the first nine months was HK$67.8 billion, 42 per cent lower than the same period a year earlier.
The falling market turnover also hurt profits at Hong Kong Exchanges and Clearing (HKEX), the operator of the city’s stock and futures markets, which last month reported a 34 per cent year-on-year net profit decline for the third quarter. Trading fee income, linked to market turnover, is its major income source.
The SFC’s other main income source, fees and charges collected from market participants, was also down 18 per cent year on year to HK$34.01 million for the three months, from HK$41.27 million a year earlier.