I am very pleased to present to members my maiden report as Chairman of the Association on its first anniversary.  Thanks to the effort of our founding members the Association was officially established on 21 March 2001.  The ensuring opening ceremony was honoured by the presence of Ms Au King Chi, Deputy Secretary for Financial Services, Mr Andrew Sheng, Chairman of Securities and Futures Commission, Mr Lawrence Fok, Deputy Chief Operating Officer of HKEx, together with guests of the industry and a host of media friends from major news agencies, television stations and the press.  I was most impressed by the support given by the Government, regulators and friends alike.  I am indebted to Mr Peter Randall who was instrumental to the successful formation of the Association.  He resigned as Vice Chairman of the Association following closure of 2cube Securities.

In the short period of one year since its establishment, the Association has increasingly been recognized as a representative body for online trade and it has been consulted extensively on issues relating to the securities industry.

I would like to recapitulate the work accomplished by the Association for the period as follows :

1.          Official formation ceremony on 18 October 2001

2.          Review and comment on various consultation papers :

(a)    Draft Guidelines for the Regulation of Automated Trading Services - May 2001 (Securities and Futures Commission)

(b)    Consultation Paper on Proposals for a Scripless Securities Market – April 2002 (Securities and Futures Commission)

(c)    Securities and Futures (Miscellaneous) Rules – July 2002 (Securities and Futures Commission)

(d)    Draft Securities and Futures (Contract Limits and Reportable Positions) Rules – August 2002 (Securities and Futures Commission)

(e)    Consultation Paper on Extension of Trading Hours of Stock and Futures Market – October 2001 (HKEx)

(f)     Consultation Paper on the CCASS/3 Stage 2 Rollout Contingency Plan – August 2002 (HKEx)

(g)    Consultation Paper on Third Party Clearing – August 2002 (HKEx)

3.          Comment on Benchmark Code of Practice – March 2002 (The Consumer Council)

4.          Comment on Penny Stocks Incident – August 2002 (Panel of Inquiry of Penny Stocks Incident)

5.          Comment on Market Monitoring – August 2002 (Securities and Futures Commission)

6.          Clarification on Client Information System

7.          Clarification with Securities and Futures Commission re Guidance Note on the Regulation of Electronic Trading of Securities and Futures

8.          Clarification with Securities and Futures Commission re Client Identification Procedures

9.          Submission of RTQ Revamp Proposal to Securities and Futures Commission in August 2002

10.      Attending APEC Working Group on Electronic Financial Transactions System - 22-23 May 2001

11.      Attending the Internet Project Team Asian Roundtable – 14 June 2002

12.      Meetings with Financial Services Bureau :

(a)    with Financial Secretary and Secretary for Financial Services re de-regulation of minimum commission on 3 November 2001

(b)    Process Review Panel Meeting with Hong Kong Stockbrokers Association, Hong Kong Securities Professionals Association, Institute of Securities Dealers on 14 December 2001

(c)    with Secretary for Financial Services and the Treasury, Secretary for Economic Development and Labour, as well as representatives from financial services industry re “one company one job scheme” on 15 August 2002

It is particularly noteworthy that Securities and Futures Commission finally accepted our recommendation to introduce non-face-to-face account opening.  Such breakthrough amendment will help to facilitate online account opening for overseas clients.  Looking ahead the Association will remain a strong advocate on promoting the healthy development of online trading.  We will strive together with the Government, regulators and market participants to create an online environment inducive to changes and innovations that caters to the needs of the market as a whole.

During the year the Association admitted two new members namely South China Securities and Core Pacific – Yamaichi, making our current membership number to 13.  We will continue our effort to recruit more new members to enhance our representation in the online industry.  It is our belief that online securities trading will increasingly be adopted by the investing public as a convenient and cost efficient means for trade executions.

In closing, I would like to thank my fellow Committee Members for their dedicated effort in the affairs of the Association.  Without their continuous participation and wise counsel, we would not be able to achieve our planned objectives.

Peter S H Wong
Chairman
28 August 2002