Hong Kong's Online Brokers Urge Exchange To Reduce Costs

by Mary Swire, Tax-news.com, Hong Kong

22 May 2001

According to reports in the Hong Kong press, online brokers are calling for Hong Kong Exchanges and Clearing (HKEx) to reduce its fees for providing customers with stock quotation information and to support their request, they have plans to commission a university study to compare HKEx's fees with up to seven other stock markets.

Peter Wong Shiu-hoi, managing director of Tai Fook Securities and member of the Hong Kong Online Brokers Association, told the South China Morning Post: 'The study is supposed to compare Hong Kong and other exchanges [in terms of information charges] and suggest what should be done on the existing pricing structure.'

The recent increase in online broking services in Hong Kong has see the exchange's income from stock quotation information services grow by more than 50 per cent. Currently, the HKEx charges online brokers for each of their customers and the brokers have the option to adopt one of three pricing regimes depending on the amount of information requested.

For HK$200 per month, clients are offered a streaming stock quote and an order queue. HK$120 per month offers less information, and the least expensive option requires clients to click on the stock-price update link each time they need information. This is charged at 7 HK cents per click. The online brokers have expressed concerns that as online trading is expected to increase considerably, so too will their costs.

According to the South China Morning Post, one of the first steps to be taken by the newly-formed Online Brokers Association in Hong Kong was to conduct a precursory study which concluded that Hong Kong's fees were the highest out of eight markets examined. Karen Buck, managing director of Canada-based TD Waterhouse Hong Hong and member of the Online Brokers Association, told the newspaper: 'It could be beneficial for the industry if the exchange looks at a pricing scheme for institutional investors and retail investors differently. For institutional investors, HK$200 a month is a fair price because they are living in the trading there . . . but for retail investors it is a bit much.'

HKEx has already released a statement saying it does not have any current plans to fundamentally change its fees and charges.

Recommended