The Securities and Futures Commission is working with the Government of Hong Kong on the drafting of amendments to existing law to push up the limit under which wronged investors can claim compensation from a pool of money levied on firms, along with other measures.

The authorities want to raise the compensation limit from HK$150,000 to $500,000 per investor per default, and, consequential to this, to raise the trigger levels for suspending and reinstating the investor compensation fund (ICF) levies from $1.4 billion and $1 billion to $3 billion and $2 billion respectively.  [US$1 = HK$7.84.]

They also want to adjust the coverage of the ICF regime so that it covers the northbound leg of Stock Connect and excludes the southbound leg. The SFC (in exceptional circumstances) once wanted the power to make interim compensation payments out of the ICF if urgent pay-outs were the only way of offsetting systemic risks, but a howl of objections from financial firms put paid to that proposal.

Hong Kong's Legislative Council (LegCo) is to look at the package shortly and to subject it to something that it calls a "negative vetting process." The plan is to bring the measures into force early next year.