Hong Kong Lawmaker Asks HKEX to Lower Market Data Fees

HKEX’s monthly fees for retail investors are higher than other stock exchanges, which may have implications for stockbrokers that serve retail investors, says a new report.

The Research Office of the LegCo Information Services Division has published a new report highlighting high monthly subscriber fees for HKEX (Hong Kong Exchanges and Clearing) market data.

Sales of market data to stockbrokers and investors have become a lucrative business for global stock exchanges, the report says. In Hong Kong, HKEX’s annual revenue from data sales has quadrupled from HKD 229 million in 1999 to HKD 919 million in 2019.

Besides the addition of two more data categories, HKEX has not revised upward its stock market data fees for the past two decades. However, smaller stockbrokers in Hong Kong claim that market data costs are burdensome, and have asked for fee reductions.

The report compares HKEX market data fees against eight other global stock exchanges, and finds that data fees at European stock exchanges are generally higher than those in Hong Kong and the US.

In addition, fees for Level 2 data and full order book data in Hong Kong are generally within the lower half of the eight major stock exchanges included in the comparison.

However, HKEX’s monthly subscriber fees for retail investors are the highest, which may have implications for stockbrokers that serve a large clientele of retail investors, the report says.

“The monthly fee at HKD 120 per user for Level 1 data charged in Hong Kong is the highest, far above HKD 2 – HKD 56 in the other six exchanges. The respective fee of HKD 200 per user for Level 2 data and HKD 400 per user for full order book are likewise the highest.”

The report was prepared as the request of Hong Kong lawmaker Christopher Cheung Wah-fung, who has reportedly met with HKEX interim chief executive Calvin Tai Chi-kin to suggest a lowering or cancellation of fees collected from market data vendors.

According to The Standard, HKEX said any changes on the current mode should undergo prudent and careful studies as the market data segment involves information transparency, depth and fairness.

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