Compensation Fund only covers
clients of Stock Exchange participants

The Unified Exchange Compensation Fund provides protection only to clients of Exchange Participants of The Stock Exchange of Hong Kong. Exchange Participants were formerly known as Exchange Members.

Exchange Participants are dealers in securities registered with the Securities and Futures Commission under the Securities Ordinance and hold one or more Stock Exchange Trading Rights.

A spokesman for the Exchange said the Exchange has received an increasing number of enquiries from members of the public about investor protection under the Unified Exchange Compensation Fund.

"If an Exchange Participant defaults (as defined in the Securities Ordinance) and causes his or its clients to suffer losses in relation to any money, securities or other property entrusted to or received by that Exchange Participant, the clients can claim compensation from the Unified Exchange Compensation Fund," he said.

"The limit of compensation is currently $8 million per Exchange Participant and may be increased subject to the approval of the Securities and Futures Commission.

"Exchange Participants are required to display in their offices their Exchange Participant Certificate or Branch Certificate, issued by the Exchange."

"Investors should have a signed client's agreement with their Exchange Participants. They should retain all evidence of their dealings in securities, including contract notes, receipts of payment and share certificates, and statements of accounts issued by their Exchange Participants," the spokesman said.

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