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Chairman’s Report (2015 - 2016) by Mr Oliver Ng

Date : 2016-09-22

I am pleased to present my report on The Hong Kong Association of Online Brokers Limited (“HKAOB”) for the period of 2015 to 2016. During the period, I represented BOCI Securities Limited and served as Chairman of HKAOB.

Our industry went through an exceptional difficult period of turbulent market environment, which saw the Daily Turnover on the Hong Kong Exchange fell from a high of HK$150m in April and May 2015 to a low of HK$65m Daily Turnover throughout the period to the present day. The excitement of growth was short lived and the whole industry was left facing a weakening market and an even weaker investor sentiment.

In the face of the weakening market, price competition became the focal point for Brokers as the only mean to maintain their market share.  In addition, the emergence of a breed of pure online Brokers to the industry has intensified the competitive landscape.  Cut throat offering of zero commission to attract new business became a common practice among these new entrants to the industry.

On the other hand, the industry is faced with an escalating cost of compliance as a result of Anti Money Laundering regulations, FATCA requirements, system security concerns as well as a whole host of other requirements from the Regulators.

Faced with these challenges, HKAOB has been working closely with different industry sectors to explore opportunities beyond the traditional means for the Online Brokers industry, with a special focus of embracing Fintech as a key to the future development and growth of the Financial Services industry.  Most notably, I have become a member of the eID Committee of Smart City Consortium, with a view of bringing in new online technology and new processes to facilitate new investors to enter the Hong Kong securities market.  Smart City Consortium (SCC) is formed by a group of professionals from different corporations and organizations to provide opinions and suggestions to the Government for formulating related policies and standards in the development of Hong Kong as a world-class smart city. The consortium is encouraged to collaborate with different stakeholders to create the right ecosystem which fosters innovation and sustainable economic growth for Hong Kong.

Also, as Chairman of HKAOB, I participated in an IT Delegation for a visit to Beijing for meetings with Ministry of Industry and Information Technology and China Internet Development Foundation.  Through the association with SCC and visit to Beijing, I was able to connect with eIDLink Information Technology Company which has been granted a license by PRC Ministry of Public Security to commercialize eID Card for PRC Citizens.  After seeing demonstration of eID Technology by eIDLink and Certizen, a unit of Hong Kong Post, I am fairly positive that the introduction of such certification service will greatly enhance the non Face to Face account opening process that will meet the KYC compliance requirements of the SFC.

With these viewpoints in mind, HKAOB will aim to continue working with the Regulators to bring in new technology and processes into our business and to enhance securities regulations that are conducive to the business development in Hong Kong.

During the period 2015/2016, HKAOB has continued to participate in benevolent events organized and supported by other securities and precious metals associations.  HKAOB conducted the following activities to fulfill the objectives of the Association:

1.      Meeting with Herman Lam, Cyberport CEO to express views on Fintech start-ups which have setup office at Cyberport.

2.      Meeting with Chris Cheung, Hong Kong Legislative Council Member(Financial Services Sector) to express views on nonface to face account opening. 

3.      Meeting with Anthony Ng, CEO of Financial Dispute Resolution Centre to express views on its functions. 

4.      Acting as Mentor to Cyberport University Partnership Programme ( CUPP ) to give a presentation on the local retail online brokerage industry to local university students participating in the Cyberport University Partnership Programme ( CUPP ) . 

5.      Joining Smart City Consortium Delegation to Beijing

6.      Seminar hosted by Smart City & Smart Identity under Belt and Road Initiative: Innovative Progress in PKI and Authentication Symposium

7.      Attended Presentation on eID Certification of PRC Citizens

8.      Responded to various market consultations and discussions issued by HKEx, SFC, Financial Services and the Treasury Bureau

9.      Submission of Proposal to SFC on non Face to Face account opening

10. Submission of Response to  HKEx and SFC relating to Joint Consultation Paper on Proposed Enhancements to The Stock Exchange of Hong Kong Limited’s Decision-Making and Governance Structure for Listing Regulation

In closing, I would like to express my deepest gratitude to all the members for their unwavering support and guidance in contributing to the success of HKAOB.

 

Oliver Ng

Chairman

 

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