XN000022-1997-01-15 — Page 63

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Transaction levies in trading stocks

Following is a question by the Hon Chim Pui-chung and a written reply by the Secretary for Financial Services, Mr Rafael Hui in the Legislative Council today (Wednesday):

Question:

Will the Government inform this Council:

(a)

(b)

(c)

given that the Government favours the adoption of the user-pay policy, of the reasons for requiring investors to bear the transaction levies in addition to brokerage and to pay stamp duties in trading stocks;

whether the authorities concerned will consider abolishing the transaction levies imposed on investors; if not, why not; and

whether the authorities concerned have considered if the above multiple- tax and multiple-fee policy will affect the territory's status as an international financial centre?

Reply:

(a)

The arrangement whereby the purchaser and the seller of securities recorded on the Stock Exchange of Hong Kong (SEHK) are required to pay a transaction levy is provided under section 52 of the Securities and Futures Commission Ordinance (Cap. 24). The transaction levy now contributes towards the funding of the Securities and Futures Commission (SFC) and the SEHK which are the bodies responsible for the regulation and operation of the securities market. To the extent that the two bodies serve the interests of the investing public, the levy arrangement is in line with the user-pay principle.

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