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Chairman’s Report (2005-2006) by Mr Steve Chan

Date : 2006-08-31

 

I am pleased to present my report on the Hong Kong Association of Online Brokers during the period I represented South China Securities Limited and took up the Chairmanship from August 2005 to August 2006.

A new company limited by guarantee, The Hong Kong Association of Online Brokers Limited (“HKAOB”), replacing the Hong Kong Association of Online Brokers, was set up and incorporated on 26 August 2005 with 12 First Committee Members. The number was further increased to 14 on 30 September 2005. Decision to incorporate the Association was made on a long-term and strategic perspective. Under a formal legal structure, HKAOB is poised to better serve the financial industry and investors.

On 11 May 2006,the Association held a cocktail party to celebrate its fifth anniversary. The Honorable Frederick Ma J.P., the Secretary of Financial Services and Treasury of the Hong Kong Special Administrative Region, was invited as the keynote speaker and Guest of Honor. During this occasion, HKAOB is proud to reveal that members of HKAOB have collectively amassed a work force of 3,619 staff and 319 years of industry experience. Total net asset value and aggregate value of client assets as at 31 December 2005 amounted to around HK$4.1 billion and HK$76.5 billion respectively. The state-of-the-art online trading platforms of our members inspired confidence of investors and generated about 2.3 million transactions in 2005. While the total value of round trip online brokerage transactions in the Hong Kong Stock Exchange in 2005 added up to HK$180.8 billion, the value of single trip online brokerage transaction via HKAOB members in 2005 amounted to HK$136.6 billion. This figure meant that online brokerage transactions done through HKAOB members in the Hong Kong market in 2005 achieved an aggregate market share of around 38%, a healthy sign of growth in the online brokerage business.

As part the anniversary celebration, ten HKAOB members got together for a joint promotion. Collaboration on business promotion of such magnitude among so many securities firms in Hong Kong was unprecedented.

During the year, two new full members, Peace Town Securities Limited and Prudential Brokerage Limited were recruited on 8 February 2006, and one new associate member, QuotePower International Limited was recruited on 10 May 2006. Charles Schwab withdrew its membership during the year. As a result, the number of members was increased to 17.

As regards to activities in fulfilling the Association's objectives during the period, we have:

  1. Joined "金融服務界關注組", organized by Mr. Chim Pui Chung.
  2. Submitted the following proposals and views to the authorities:
    1. Sent out response letter in February 2006 to the Process Review Panel for the SFC;

    2. Sent out response letter to the SFC on proposed amendments to the Securities and Futures (Levy) Order and the Securities and Futures (Investor Compensation – Levy) Rules in April 2006;

    3. Sent out follow-up letter to the Hong Kong Exchanges and Clearing Limited on the Discussion Paper on Growth Enterprise Market in April 2006.

  3. Joined the Fujian visit led by Mr Frederick Ma of FSTB from 28 – 30 September 2005.
  4. Participated in the 11th Asia Securities Forum in Seoul, Korea from 21 – 23 May 2006.
  5. Joined the table tennis tournament organized by the Hong Kong Securities Professionals Association on 3 September 2005.

 

This has been an important year for the Association as HKAOB members played an instrumental role for the expansion of the online brokerage industry in Hong Kong. With the strong economic and corporate growth in the Mainland, we should see even more opportunities as well as challenges ahead. As such, I hope members would capitalize further on our solidarity and to strive well in this interesting era.

Steve Chan
Chairman
31 August 2006

 

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