“Rich traders don’t need $2k”: Hong Kong finance professionals slam subsidy scheme

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“Rich traders don’t need $2k”: Hong Kong finance professionals slam subsidy scheme

Wealthy securities and futures professionals do not need the paltry HK$2k payment that the Hong Kong government is giving them in response to Covid-19.

Under the ‘subsidy scheme for the securities industry’, which is part of the government’s anti-epidemic fund, all responsible officers or representatives of the Securities and Futures Commission (SFC) can apply for the handout. Many have already pocketed their money, according to industry sources, while others have until 30 September to apply.

For well-rewarded people who take daily bets on financial markets, HK$2k (a mere US$268) is about enough to cover a nice client lunch in Lan Kwai Fong. Even small-time retail traders would barely see the benefits.

However, in total the subsidy scheme is expensive: it is likely to cost the government about HK$130m. Although some of this will be spent on HK$5k payments to small and medium-sized brokerage firms, there are still thousands of potential individual applicants. Any person carrying on regulated activities in the securities and futures markets must be licensed or registered with the SFC. For example, there are 352 people dealing in securities whose surname starts with the letter A, according to the SFC website.

“There are a lot of SFC-registered people. And why they think that rich people need HK$2k is beyond me – it’s ridiculous,” says a trader-turned headhunter. “I was talking to some hedge fund managers about this recently, and they were in stitches about the whole thing,” he adds.

“I don’t think this has been well thought through. Giving HK$2k to ‘poor downtrodden brokers’ is hardly sending the right message,” says Benjamin Quinlan, a former UBS banker who now runs a Hong Kong finance consultancy. “A lot of other people much more in need could have benefited from that money,” he adds.

Hongkongers on the SFC Register, along with all other permanent residents aged over 18, are also eligible for a cash handout of HK$10k under a separate programme announced by the government earlier this month. The HK$2k subsidy is therefore 20% over and above the payment to the general public.

Have a confidential story, tip, or comment you’d like to share? Email: smortlock@efinancialcareers.com or Telegram: @simonmortlock. You can also follow me on LinkedIn.

Photo by Twitter: @jankolario on Unsplash

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