General Public

 

About FDRC

1. What is FDRC?
   

   FDRC stands for Financial Dispute Resolution Centre (FDRC), which is an independent, non-profit making organisation set up to assist financial institutions resolve financial disputes with their customers by way of mediation and/or arbitration under the Financial Dispute Resolution Scheme (FDRS).

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2. Will FDRC conduct investigations and make findings on any case?
   

   FDRC is an independent and impartial entity to provide timely, accessible and user friendly services to resolve monetary financial disputes and will not conduct any investigations nor make findings on your case.

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3. How do I contact the FDRC?
   

   You can contact us at:-

   • Hotline telephone number : (852) 3199 5199
   • Email : fdrc@fdrc.org.hk
   • Office : Room 408-409, 4/F, West Wing, Justice Place,
     11 Ice House Street, Central, Hong Kong
     

   Our opening hours are Monday to Friday from 9 am to 5.30 pm (except public holidays).

   (Please make appointment for in-person enquiry.)

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4. Who are eligible to use services under Financial Dispute Resolution Scheme (FDRS)?
   

   All scheme members, who are the financial institutions (FI) as defined under the FDRS, and its customers, who are Eligible Claimants, can use our services.

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5. Who are Eligible Claimants (EC)?
   

   Eligible Claimants are individuals, sole proprietors or small enterprises (SE)* who:

   • already had/having customer relationship with the FI; or
   • had been provided with any financial services, including financial product, service or advice about a financial product or service provided by or via the FI.

   ^* SE means a limited company or a partnership, and in accordance with its latest financial year end statement has:

   1. an annual turnover not exceeding HK$50 million;
   2. gross assets not exceeding HK$50 million; and
   3. not more than 50 employees in Hong Kong.
   
   If a limited company is a subsidiary company or a holding company (in accordance with the definitions used in the Companies Ordinance (Cap. 622)) within a group, the group’s consolidated figures will be used. For overseas incorporated enterprises, same criteria apply.
   The implementation of the terms in relation to Small Enterprises (SE) is effective from 1 July 2018.

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6. Who are scheme members or the financial institutions (FI)?
   

   Under the licensing conditions imposed on financial institutions authorized by the HKMA, or the Code of Conduct for Persons Licensed by or Registered with the SFC, FIs (excludes those financial institutions which only carry on Type 10 regulated activity (i.e. provision of credit rating services) under the Securities and Futures Ordinance (Chapter 571)) are to be members of the FDRS operated by the FDRC.

   The FIs agree to abide by these Terms of Reference and to follow the procedures and processes prescribed by the FDRC for the FDRS. The FIs will enter into Mediation and/or Arbitration with the aim to resolving an Eligible Dispute.

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7. When can I make an application to the FDRC?
   

   If you are an EC, before filing an application to the FDRC, you have filed a written complaint to the relevant FI and either

   • you have received a final written reply from the relevant FI; or
   • have not received any final written reply from the relevant FI after 60 days from the date you made the written complaint to the relevant FI.

   Under the Terms of Reference (Jan 2018), if you are an FI, you can make an application to the FDRC after you have obtained your customer’s consent (in the form set out at Annex X).

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8. How much is the maximum claimable amount that FDRC will accept?
   

   The FDRC provides an independent and accessible alternative to court proceedings to help FI and their customers* settle monetary disputes with a maximum claimable amount:

   	Date of 1st knowledge of loss	Maximum Claimable Amount (inclusive of interest)	Type of Dispute
   1	before 1 Jan 2018	HK$500,000	Eligible Dispute
   2	on or after 1 January 2018	HK$1,000,000	Standard Eligible Dispute*
   3	on or after 1 January 2018	Over HK$1,000,000	Extended Eligible Dispute*

   *The implementation of the terms in relation to SE in effective from 1 July 2018.

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9. Why is the maximum claimable amount under the FDRS set at HK$1,000,000?
   

   It is estimated that quite a number of the financial disputes falls within this claimable amount. That’s why HK$1,000,000 was set as the maximum claimable amount under the Terms of Reference (Jan 2018).

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10. What are FDRC’s fees?
    

    An application fee of HK$200 is payable upon filing of the FDRS Application Form for the FDRC to decide if your case will be accepted for mediation.

    With reference to the Terms of Reference (Jan 2018), for a claim involving less than HK$200,000, an EC has to pay a HK$1,000 and an FI has to pay a HK$5,000 mediation fee for the specified mediation time of up to 4 hours. For a claim between HK$ 200,000 and HK$1,000,000, an EC has to pay a HK$ 2,000 and an FI has to pay a HK$10,000 mediation fee for the specified mediation time of up to 4 hours. If there is extended mediation time for a claim less than HK$ 200,000, an additional fee of HK$750 per hour or part thereof is payable by each party. If there is extended mediation time for a claim between HK$200,000 and HK$1,000,000, an additional fee of HK$1,500 per hour or part thereof is payable by each party.

    For amount of claim over HK$1,000,000, please refer to Schedule of Fees, Terms of Reference (Jan 2018).

    (HK$)		Applicant/ EC	FI
    Making enquiries		Nil	Not Applicable
    Filing an Application Form*		$200	Not Applicable
    Mediation
    Specified Mediation Time (4 hours)	Amount of claim	Per case	Per case
    	less than $200,000 between $200,000 and $1,000,000	$1,000 $2,000	$5,000 $10,000
    Extended Mediation Time	Amount of claim
    	Less than $200,000 Between $200,000 and $1,000,000	$750 / hour or part thereof $1,500 / hour or part thereof	$750 / hour or part thereof $1,500 / hour or part thereof

    For claims in which the date of first knowledge of loss by the EC falls before 1 January 2018, please refer to Schedule of Fees, Terms of Reference (Feb 2014).

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11. What kind of documents do I have to submit in order to make an application for FDRC services?
    

    With reference to the Terms of Reference (Jan 2018), if you are an EC, you must　first make a written complaint to the FI about your monetary loss. Once you receive a final written reply from the FI or there is no final written reply from the FI after 60 days from the time you made a written complaint, you may come to the FDRC. You may submit an Application Form and a copy of all your supporting documents including:-

    Documents showing that you are an EC (e.g. account statements);

    Documents showing the provision of financial services (e.g. transaction records, written complaint filed with the FI, final written reply from the FI); and

    Documents supporting your monetary claim (e.g. promotional flyer of the FI).

    For limited companies, please also provide the following latest financial year end statement:

    1. certified true copy of Business Registration Certificate and NAR1 form of the Company Registry;
    2. certified true copy of MPF or employee insurance statement;
    3. audited financial statement; and
    4. other information as deemed appropriate by the Applicant.

    For partnerships, please also provide the following latest financial year end statement:

    1. certified true copy of Business Registration Certificate and Business Registration Form of the Inland Revenue Department;
    2. certified true copy of MPF or employee insurance statement;
    3. audited or certified financial statement; and
    4. other information as deemed appropriate by the Applicant.

    For overseas companies and other variations, documents of equivalent effect and/or professional certifications to prove the meeting of the criteria are required to be submitted.

    If you are an FI, you must submit an Application Form together with the consent from your customer and a copy of all your supporting documents.

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12. Is there any time limitation for applying services under the FDRS?
    

    The claim is made within the following calendar months from the date of the purchase of the Financial Services, or the date on which the EC first had knowledge that he suffered monetary loss arising out of the Financial Services, whichever is the later:

    	Date of 1st knowledge of loss	Limitation Period	Type of Dispute
    1	before 1 January 2018	12 Calender months	Eligible Dispute
    2	on or after 1 January 2018	24 calendar months	Standard Eligible Dispute*
    3	on or after 1 January 2018	Over 24 calendar months	Extended Eligible Dispute*

    *The implementation of terms in relation to SE is effective from 1 July 2018.

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13. Why the claim is set to be made within 24 calendar months from the date of the purchase of the Financial Services, or the date on which the EC first had knowledge that he suffered monetary loss arising out of the Financial Services, whichever is the later, under the FDRS on or after 1 January 2018?
    

    The 24 months was set as a reasonable time limit as both parties would be likely to have a better memory of their disputes and their documentary proofs would be more easily identifiable. Under the current securities regulations, contract notes as well as other records and documents are required to be kept for a period of 24 months.

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About Mediation

14. What is mediation?
    

    Mediation is an alternative dispute resolution (ADR) method employed in many places in the world to resolve differences, conflicts and disputes. It is a structured process comprising one or more sessions in which one or more impartial mediators without adjudicating a dispute, assist the parties to do any or all of the following—
    

    1. identify the issues in dispute;
    2. explore and generate options;
    3. communicate with one another;
    4. reach an agreement regarding the resolution of the whole, or part, of the dispute.

    Any negotiated outcome reached during mediation should be acceptable to both (or all) parties and recorded as a mediated settlement agreement which is binding as a contract. The FDRC provides a standard process of appointing a mediator for the parties and will provide administrative support in the mediation process.

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15. What areas of disputes will mediation be useful?
    

    In general, mediation is useful for most kinds of disputes including workplace, healthcare, family, commerce and finance, land redevelopment, school, contractual and personal injury disputes.

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16. What are the advantages of mediation?
    

    As mediation is confidential, parties in dispute, through the assistance of a mediator can resolve their differences more cost effectively and in a timely manner. The process of mediation is flexible and can be structured to cater for the interests and needs of the parties. The parties are able to decide the terms of their settlement.

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17. Will a mediator impose terms of settlement for the parties in dispute?
    

    No. A mediator is impartial and will facilitate the parties to negotiate. A mediator will not impose any terms of settlement on the parties. The mediator will identify the interests and concerns of each party and facilitate the parties' negotiation of a settlement agreement that addresses their interests.

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18. How can I be sure the mediator assigned to me is suitable?
    

    The mediators on the FDRC List of Mediators have undergone a series of training and assessments. All of them on the List are expected to have the required knowledge and experience in financial matters, and are able to mediate financial disputes.

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19. Can the EC appoint a mediator himself? Why?
    

    The appointed mediator must be selected from the FDRC List of Mediators according to the FDRC Terms of Reference. These mediators will have undergone a series of specialized trainings and assessments and have the required experience to conduct mediations. As they are also bound by the Ethics Code for FDRC Mediators, it will provide some assurance for the EC that the mediation will be conducted in an ethical way.

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20. How long does it take for the FDRC to arrange for mediation?
    

    After parties have signed the Agreement to Mediate and exchanged relevant information, the appointed mediator will commence the mediation session within 21 days from the date of his appointment.

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21. Can I bring a lawyer to the mediation?
    

    Unless it is an Extended Eligible Dispute or it is a claim under court proceedings, no legal representative, including in-house lawyer, is allowed to act on behalf of either Party in the Mediation. You can seek legal advice, whenever necessary.　

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22. What are the criteria in extending the specified mediation time?
    

    The specified mediation time is 4 hours. The mediator has to evaluate if there is a need for it to be extended. For example, he may consider if the case is likely to be settled after the extension of mediation time. The willingness of both parties to extend the mediation time will also be considered.

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About Arbitration

23. How to initiate arbitration under FDRS?
    

    You may wish to proceed with the FDRC’s “documents-only” arbitration if there is an unresolved Eligible Dispute. The arbitrator may conduct an in-person hearing if the arbitrator decides that it is necessary for deciding the claim.

    Any dispute, controversy or claim arising out of or relating to an Eligible Dispute shall, upon written request from the Claimant, be resolved by Arbitration administered by the FDRC via “Mediation First, Arbitration Next” or “Arbitration Only” in accordance with the FDRS Mediation and Arbitration Rules

    For “Mediation First, Arbitration Next”, you will need to file a written Notice to Arbitrate within 60 days from the date of the Mediation Certificate.

    "Arbitration only" applies to Extended Eligible Disputes with parties' consent under Terms of Reference (Jan 2018)

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24. What is arbitration?
    

    Arbitration is a private and confidential dispute resolution process where the parties submit their dispute to be adjudicated by an arbitrator under the FDRS. The arbitrator will issue an Arbitral Award which is final and binding.

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25. What are the advantages of arbitration?
    

    Arbitration is conducted in private and is confidential. Arbitration procedure is less formal than court proceedings and therefore relatively faster and less expensive. Arbitral awards can be enforced internationally and is final and binding on the parties.

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26. How can I be sure that the arbitrator assigned to me is suitable?
    

    The arbitrators on the FDRC List of Arbitrators have undergone a series of training and assessments. All of them on the List are expected to have the required knowledge and experience in financial matters, and are able to arbitrate financial disputes.

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27. What kind of documents do I need to submit in order to apply for arbitration?
    

    You have to submit a written Notice to Arbitrate, written submissions and copies of documentary evidence to support your case.

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28. What are the fees for arbitration?
    

    With reference to the Terms of Reference (Jan 2018), for the amount of claim is up to HK$1,000,000, an EC has to pay HK$5,000 and an FI has to pay HK$20,000 arbitration fee for documents-only arbitration and if there is an in-person hearing, each party has to pay an additional fee of HK$12,500. All fees paid are not refundable.

    For amount of claim over HK$1,000,000, please refer to Schedule of Fees, Terms of Reference (Jan 2018).

    (HK$)		Applicant/ EC	FI
    Making enquiries		Nil	Not Applicable
    Filing an Application Form		$200	Not Applicable
    Arbitration (amount of claim up to $1,000,000)		Per case	Per case
    - Documents-only		$5,000	$20,000
    - In-person hearing (in addition to the fees payable for document-only Arbitration)		$12,500	$12,500

    For claims in which the date of first knowledge of loss by the EC falls before 1 January 2018, please refer to Schedule of Fees, Terms of Reference (Feb 2014).

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29. Can I appeal the decision of the arbitrator?
    

    The decision of the arbitrator is final and binding on you and the FI and is not subject to review on the merits. You can only lodge an appeal against the Arbitral Award on a point of law to the court.

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