Wednesday, October 16, 2019
 
Columnist
Martin Hennecke

Small brokers feel the heat
 
09/10/2019
 
Small to medium-sized security brokers are facing severe difficulties such as high rents and regulatory costs, as stock market turnover shrinks due to political unrest and the trade war, the Hong Kong Securities Association said yesterday. Chairman Gordon Tsui Luen-on said 22 brokers suspended operations in the first three quarters of the year, representing a 38 percent increase year-on-year, while 30 new brokers launched operations. He said that the situation had not deteriorated further, though some firms were laying off staff, but the gloomy environment is expected to persist into the fourth quarter. Tsui suggested that the Securities and Futures Commission lower or waive related license fees for individual brokers and firms. The SFC implemented new guidelines to cap securities margin financing last week. Tsui said he hopes the regulator will provide buffers to the brokers, such as exercising discretion in dealing with deviations from a benchmark. Meanwhile, Bright Smart Securities & Commodities (1428) expects its net profit for the six months from April to September to fall 11.6 percent year-on-year to HK$213 million.
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