Futu Securities International (Hong Kong) Ltd., a locally-licensed brokerage partly backed by China’s Tencent Holdings Ltd., has been accused of breaking some rules as it facilitated the opening of cross-border stock trading accounts for investors in Shenzhen, the Hong Kong Economic Journal reported.
The broker is providing a two-year commission waiver to lure clients, following a relaxation in the Shanghai-Hong Kong Stock Connect program and some incentives offered by rival brokerage GuoKing (HK) Securities and Futures Co. Ltd., the report said.
GuoKing Securities revealed last month that it will permanently waive commission for southbound investors betting on Hong Kong-listed stocks through the stock link.
The practices of zero-commission and new cross-border stock trading accounts have drawn the attention of regulators and lawmakers in Hong Kong.
Christopher Cheung Wah-fung, a legislator representing the financial services constituency, said authorities should step in and stop unhealthy competitive practices in the sector.
According to the code of conduct issued by the Securities and Futures Commission, local brokers can open accounts for non-resident clients only under mandate of authorized persons licensed by the watchdog, Justice of the Peace, or professionals such as branch managers of Hong Kong banks, lawyers or chartered accountants.
Translation by Vey Wong
[Chinese version 中文版]
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