Legislators on Monday cast doubts on the securities regulator’s decision to allow the Hong Kong Mercantile Exchange to surrender its licence, instead of immediately suspending it, after it emerged that the firm had insufficient capital.
The HKMEx, a commodity trader, chaired by Executive Councillor Barry Cheung Chun-yuen, last week handed back its trading licence and suspended operations after it became clear it could no longer meet the requirement that it have sufficient cash to cover nine months of operations.
The decision by the Hong Kong Securities and Futures Commission to allow such an arrangement has raised concern among legislators.
Christopher Cheung Wah-fung, legislator for the financial services sector, said on Monday the SFC’s handling of HKMEx’s case was unusually lenient.
Cheung said insufficient cash was a serious problem that usually led to immediate licence suspension.
“If this happened with brokers, I believe the SFC would take very serious actions,” Christopher Cheung said.
