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Abstract
This study provides an assessment of the online securities trading landscape in Hong Kong, tracing its development from infancy to maturity. The introduction of advanced electronic trading systems, such as the AMS/3.8, significantly enhanced market infrastructure and capacity, facilitating the growth of remote order placement. This technological shift has contributed to a continued upward trend in online trading's contribution to overall market turnover, which reached 29% of online brokers' total turnover value by 2013/14. While the Hong Kong market shows high market acceptance and high penetration rates for online platforms among retail investors (73% of all stock traders in 2014), the industry faces saturation and thinning profit margins due to intense competition and commission deregulation. Crucially, the paper highlights a key regulatory challenge: the divergent compliance standards for client opening procedures, particularly regarding Anti-Money Laundering (AML) requirements, between the U.S. Securities and Exchange Commission and the Hong Kong Securities and Futures Commission. This conflict, combined with the market's maturity and low profitability, is projected to lead to the exit and consolidation of some online brokerage firms operating in Hong Kong.
Keywords. Online Securities Trading; Market Maturity; Anti-Money Laundering (AML); Brokerage Consolidation; Hong Kong Financial Market.
JEL. C38; I19; L52.
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