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The Securities and Futures (Levy) (Amendment) Order 2014, which seeks to provide for a 10 per cent reduction of the levy payable in respect of any trading in securities and futures/options contracts, was gazetted today (June 6).
"Our proposal has taken into account the need for the Securities and Futures Commission (SFC) to maintain a healthy financial position on the one hand, and the benefit that the reduction will bring to the general investing public and the financial industry on the other," said a spokesman for the Financial Services and the Treasury Bureau.
Under the Order, the levy payable by a seller or a purchaser in respect of a transaction of securities will be reduced from 0.0030 per cent to 0.0027 per cent. The levy payable in respect of a transaction of a futures contract will be reduced from $0.60 to $0.54; the levy payable in respect of a transaction of a Mini-Hang Seng Index Futures Contract, a Mini-Hang Seng Index Options Contract, a Mini-Hang Seng China Enterprises Index Futures Contract, a stock futures contract or an option for such a contract will be reduced from $0.12 to $0.108.
Based on an estimated average daily turnover of $65 billion and daily turnover of futures/options contracts of 270 000 contracts, it is estimated that the proposed levy reduction will reduce the transaction cost to the market by about $105 million a year.
According to section 396 of the Securities and Futures Ordinance, the SFC may, after consultation with the Financial Secretary, recommend to the Chief Executive in Council that the rate or amount of a levy be reduced if the reserves of the SFC are more than twice its estimated operating expenses for that financial year.
The SFC effected a levy reduction of 20 per cent in December 2006 and a further 25 per cent in October 2010.
The Order will be tabled in the Legislative Council (LegCo) for negative vetting on June 11, 2014. Subject to scrutiny by LegCo, the Order will be effective from November 1 this year.
Ends/Friday, June 6, 2014
Issued at HKT 11:08
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