White Collar | Hong Kong’s SFC rejects use of WhatsApp for stock orders
Hong Kong’s Securities and Futures Commission has turned down a request by brokers that they be allowed to use the WhatsApp messaging service to take down orders, a move that raises doubts about the city’s commitment to adopting innovative ideas in the financial services sector.
Many investors already use the instant messenger app on their smartphones to place orders with brokers. But Christopher Cheung Wah-fung, the lawmaker representing brokers, said the practice had been rejected by the SFC.
“The reason used by the SFC is that WhatsApp may be easily hacked and thus is not that secure for stock trading,” Cheung said.
However, the reason given is not very convincing.
The SFC now requires all brokers to use a telephone with a recording device to take orders from clients
In 2011, computer hackers attacked Hong Kong Exchanges and Clearing’s regulatory disclosure website, which is used by all listed companies to announce their results and corporate actions. The cyber attacks crashed the site and forced the suspension of trading in shares of seven firms with a combined market value of HK$1.5 trillion - including banking giant HSBC.
The cyber attacks did not lead the SFC to ban HKEx from using the website or letting companies disclose company news on the site. So why the worry about cyber attacks in banning brokers and investors from using WhatsApp to take stock orders?
