SFC announces temporary break in annual licensing fees

The SFC announced on 26 March 2012 that annual licensing fees will be waived for two years from 1 April 2012 for all licensed corporations and registered institutions (i.e. banks). The waiver will cover fees payable for firms as well as their licensed individuals. The waiver applies to annual licensing fees but not to licensing application fees or transfer fees.

According to the SFC, the objective is to relieve the regulatory cost burden on the securities and futures industry because market conditions are considered difficult.

Based on figures submitted to the Legislative Council Panel on Financial Affairs relating to the SFC’s 2011-12 budget, the SFC’s reserves increased by 40% from HK$4,820 million as at December 2008 to HK$6,743 million as at December 2010. The public voiced various ideas as to what the SFC should do to reduce the surplus. The SFC subsequently announced it is considering purchasing its own premises, a move taken by the Hong Kong Monetary Authority several years ago.

The SFC previously granted a one-year waiver of annual licensing fees in February 2009 and mentioned difficult market conditions as one of the reasons at the time. With the 2009 waiver, there was some confusion in the market as to how the fees would be pro-rated. For the current scheme, all annual licensing fees that become payable between 1 April 2012 and 31 March 2014 will be waived and fees payable before or after these dates will not be waived. There are no pro-rating arrangements.