INRODUCTION
1. The Consumer Council welcomes the Securities and Futures Commission (SFC) taking initiatives to rectify operational deficiencies in the securities and futures markets to ensure investors get timely and meaningful information about transactions, so as to protect their own interests.
COUNCIL RESPONSE
Extend time for providing contract notes
2. Para 10(g) of the consultation document - Given that the issuance of contracts notes are computerized, the Council queries the rationale behind the extension of time for providing a contract note to a client from one to two business days. Unless there are justified reasons, for example, trading in different time zones, it would not seem acceptable for a delay as clients would not have timely information about their trading.
Issue of contract notes
3. Para 12 - The Council supports the requirement that one set of contract notes is enough where a transaction involves two intermediaries. However, the SFC should ensure that one set of contract notes actually passes to clients. In other words that execution brokers should be clearly required to issue contract notes.
Average pricing
4. Para 16 - The Council supports the requirement that average price could be used if a client so prefers and any change of preference could be made afterwards.
Delivery of contract notes to clients
5. Para 24 - The SFC invites comments on how to differentiate sophisticated or professional investors from others. The Council believes it may not be possible to make a clear distinction between various types of investors. Though some general benchmark, such as the size of their investments and their investment patterns may serve to characterize each class of investors, the distinction is not mutually exclusive: a professional investor could sometimes be a retail investor and vice versa.
6. However, in the context of this consultation document, the Council thinks it would be more important to allow investors, whether retail or professional, to have a choice as to whether or not they prefer to receive a monthly statements of accounts.
Link to the consultation document by Securities and Futures Commission
