Hong Kong Securities and Futures Commission: Proposal to set limits on fees charged by securities registration institutions in the paperless securities market system.

On February 24, the Hong Kong Securities and Futures Commission (SFC) proposed setting limits on the fees that approved securities registration institutions can charge under the upcoming paperless securities market system in Hong Kong. A consultation on this matter was launched today. The fees in question include costs for setting up facilities for investors to hold and manage paperless securities, dematerialization costs, and fees for handling and registering securities transfers. The proposal for these fee limits is aimed at providing investors with a certain level of protection, as they are unable to negotiate these fees. In addition, a unified fee benchmark will help streamline procedures and avoid confusion in the market. When formulating the limits, the SFC has sought to strike a balance on how costs are shared among various stakeholders and to maintain reasonable expenses for investors. This will encourage investors to participate early in the paperless securities market and ensure that the business of approved securities registration institutions is commercially viable. The SFC encourages stakeholders to provide feedback on the proposed measures during the consultation period, which will end on April 23, 2025. Depending on the legislative process of the relevant subsidiary legislation for the paperless securities market and market readiness, the SFC aims to implement the paperless securities market system in early 2026.