This section gives you an overview of the investor protection measures in Hong Kong, particularly for retail investors, in case financial intermediaries such as banks or brokerages default.
To enhance transparency, intermediaries are required to disclose to you their own interests in selling a particular product. If you intend to invest in a derivative product but do not have a good level of knowledge about how they work, your intermediary must explain the relevant risks, as well as advising on the suitability of the investment.
This section also introduces the investor compensation scheme, eligibility criteria for the scheme and the claims process. Serving as a safety net, the Investor Compensation Fund is based on a per-investor compensation limit of HK$150,000 for trading securities and futures contracts respectively. Under the terms of the Fund, you are eligible for compensation should you sustain a loss because of default by an intermediary in relation to specified securities and futures contracts, or related assets.
In the unfortunate case of a monetary dispute with a financial institution, instead of taking your complaint to the court, an alternative is to use the mediation and arbitration services at the Financial Dispute Resolution Centre ("FDRC"). This is a non-profit organisation, which administers a Financial Dispute Resolution Scheme ("FDRS") in an independent and impartial manner to resolve financial disputes between individual customers and financial institutions.