Lai See | SFC regulations hindering Hong Kong's fund management industry

We hear of more regulatory madness. A reader writes to say that he has held an account with BlackRock, the world's largest provider of mutual funds and exchange-traded funds, for about 25 years. He rebalances his portfolio about twice a year by switching between various equity sector funds.

Late last year, he sent a switching instruction to BlackRock's Hong Kong office but was told: "Sorry, we don't have your risk profile and our internal regulators cannot allow your transaction." Because it was too troublesome to handle the Securities and Futures Commission's requirements, BlackRock stopped handling direct Hong Kong clients, so their business is now all through local intermediaries, which add to client costs.

Despite his 25-year involvement with BlackRock, he ended up having to transfer his investments from BlackRock Hong Kong. Subsequently, BlackRock issued a notice advising direct clients that they could no long buy or switch, only hold or redeem.

"The SFC is not protecting me, they are creating problems for me," he says. "They should be authorising a standard risk rating for all fund products offered in Hong Kong and investors should be left to make their own decisions." The solution, he says "is to go offshore where regulators and companies treat me as an adult".

So come on John Tsang, wake up and smell the coffee. Our regulators are seriously affecting Hong Kong's fund management business.