HKEx Confirms Abolition Of Minimum Commissions From April 1

Hong Kong Exchanges and Clearing Limited (HKEx) today confirmed its earlier decision to abolish minimum brokerage commissions from 1 April this year. From that date, commissions will be freely negotiated between brokers and their clients. A tripartite forum, consisting of

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Hong Kong Exchanges and Clearing Limited (HKEx) today confirmed its earlier decision to abolish minimum brokerage commissions from 1 April this year. From that date, commissions will be freely negotiated between brokers and their clients.

A tripartite forum, consisting of the Financial Services and the Treasury Bureau, the Securities and Futures Commission (SFC) and HKEx, will examine how best to protect smaller brokers from the effects of the competition which will now ensue.

Currently, brokers are required to charge a minimum brokerage commission of 0.25% of a stock transaction’s value, whilst brokers at the futures exchange are required to charge fixed sums, depending on the type of futures contract. The minimum brokerage commission system has been in place since the first Hong Kong stock exchange was established – and the 0.25% minimum commission was set in 1969.

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