Transaction Costs 
23/10/2013 
 

General

The following fees apply to each security transaction1
     

 

Brokerage2

Effective 1 April 2003, the brokerage of security transactions becomes freely negotiable between brokers and their clients.
 

Transaction Levy

Effective 1 October 2010 , a Transaction Levy of 0.003% (rounded to the nearest cent) is charged per side of the consideration of a transaction, and the amount is collected for the SFC.  There is no Transaction Levy on Securities Market Maker (SMM) transactions.  

To simplify operations with a unified basis for fee calculation for transactions in non-Hong Kong dollar currencies, the Exchange will adopt the same exchange rates as for stamp duty calculation purpose for calculating Transaction Levy if applicable. 
  

Investor Compensation Levy

Effective 19 December 2005, the payment of Investor Compensation Levy (i.e. 0.002% per side of the consideration of a transaction, rounded to the nearest cent) has been suspended by the SFC as the net asset value of the compensation fund exceeds $1.4 billion, as per the Securities and Futures (Investor Compensation – Levy) (Amendment) Rules 2005. 

To simplify operations with a unified basis for fee calculation for transactions in non-Hong Kong dollar currencies, the Exchange will adopt the same exchange rates as for stamp duty calculation purpose for calculating Investor Compensation Levy if applicable.  
  

Trading Fee

A Trading Fee of 0.005% per side of the consideration of a transaction (rounded to the nearest cent) is payable to the Exchange.  There is no Trading Fee on SMM transactions.

To simplify operations with a unified basis for fee calculation for transactions in non-Hong Kong dollar currencies, the Exchange will adopt the same exchange rates as for stamp duty calculation purpose for calculating Trading Fee if applicable.  
    

Trading Tariff

A trading tariff of HK$0.50 is payable to the Exchange on each and every purchase or sale transaction.  The decision on whether or not to pass the trading tariff on to investors is at the discretion of brokers.
 

Stamp Duty on Stock Transaction

Unless stated otherwise, all securities listed on the Exchange are subject to a stamp duty at a rate of 0.1% (rounded up to the nearest dollar) on the value of the transaction, on both the buyer and the seller.  Please click here for a full list showing securities not subject to Hong Kong Stamp Duty.  Stamp Duty remissions apply to all Options Market Maker jobbing transactions and SMM transactions.  

To facilitate the calculation of stamp duty to be paid through the Exchange for transactions in non-Hong Kong dollar currencies on any trading day, the exchange rates of Hong Kong dollars against renminbi and US dollars will be published on the HKEx website. Please click here to access the exchange rate information.  
 

 

Transfer Deed Stamp Duty 

Independent of the quantity of shares traded, the Government levies a transfer deed stamp duty of HK$5.00, payable by the registered holder of the pertaining share certificate(s), i.e. the seller, on each new transfer deed.
 

Transfer Fee

Independent of the quantity of shares traded, the registrar of each listed company levies a transfer fee of HK$2.50 per share certificate from the registered holder, i.e. the buyer, for each new certificate issued.
 

Initial Public Offer Shares

Of the transaction costs discussed above, brokerage, transaction levy and trading fee are applicable to initial public offer share.  For ease of reference, below please find a simple illustration of how some of the above transaction costs are involved and calculated in an application for new shares offered by a new listing issuer.  Contents of the below illustration are agreed following consultation among the Exchange, the SFC and the Hong Kong Association of Banks and the demonstration is mainly for the benefit of the public in understanding the method of calculating a correct amount in application for new shares.

Formula for Amount Payable for Initial Public Offer Shares

1.

The amount payable for initial public offer shares (“Amount Payable”) comprises four elements, namely:

 

(i)     Application Money - the offer price of the number of the shares applied for;

(ii)    Brokerage Fees2 - 1% of the Application Money;

(iii)   SFC Transaction Levy3 - 0.003% of the Application Money; and

 

(iv)   the Exchange Trading Fee4 - 0.005% of the Application Money

2.

Each component in (1) above should be calculated separately to arrive at a sub-total.  Where applicable, the relevant sub-total should be rounded to the nearest cent i.e. if the third digit after the decimal point is 0.005 or above, it should be rounded up; otherwise it should be rounded down.   The four sub-totals should then be added together to arrive at the Amount Payable.
 

3.

For example:

 

No. of Public Offer Shares Applied

: 2,000 shares

 

  • Issue Price

: HK$5.23

 

  • Brokerage

: 1%

 

  • SFC Transaction Levy

: 0.003% 

 

  • The Exchange Trading Fee

: 0.005%

Component

Sub-total
(Before rounding)

Sub-total
(After rounding)

Application Money
[2,000 x $5.23]

N/A

$10,460.00

Brokerage
[$10,460 x 1%]

N/A

$104.60

SFC Transaction Levy
[$10,460 x 0.003%]

$0.3138

$0.31

the Exchange Trading Fee
[$10,460 x 0.005%]

$0.523

$0.52

Amount Payable for Public Offer Shares

$10,565.43

 

Italian Financial Transaction Tax (“IFTT”) Specifics

Relevant transactions conducted on or reported to the SEHK on shares issued by Italian based companies (e.g. Prada, stock code: 1913) and their derivatives (e.g. derivative warrants with Prada shares as the underlying) may be subject to the IFTT. As of 23 October 2013, the following list of securities are in scope for IFTT:
 

 

Name of securities

Stock code

1

Prada

1913

2

JPPRADA@EC1509A

18065

3

BPPRADA@EC1510A

19526

4

BPPRADA@EC1511A

22233

The IFTT is to be charged and collected by financial intermediary involved in the relevant transaction.  For more details, please refer to the FAQ.

    

1

Brokers or custodians have to pay HKSCC service fees for use of the clearing, settlement, custody and nominee services offered by CCASS.  Investors may be charged by their brokers or custodians for such CCASS services unless investors settle with brokers or custodians outside CCASS.  The decision on whether and how to pass these CCASS related service fees on to investors will be totally at the discretion of the brokers or custodians.  For details of CCASS service fees, please click here.

2

The brokerage of IPO transactions is currently set at 1% of the application money (Paragraph 7 of Appendix 8 to the Rules Governing the Listing of Securities ('Main Board Listing Rules') and Paragraph 6 of Appendix 9 to the Rules Governing the Listing of Securities on the Growth Enterprise Market ('GEM Listing Rules')).

3

Treatment as mandated in Paragraph 5 of Appendix 8 to the Main Board Listing Rules - Transaction Levy on New Issues states that the Transaction Levy together with the Investor Compensation Levy shall be calculated on an aggregated basis (rounded to the nearest cent) by applying the percentage rates as specified from time to time in the Securities and Futures (Levy) Order and the Securities and Futures (Investor Compensation - Levy) Rules to the total consideration payable to the issuer by investors.  Similar reference can also be found in Paragraph 3 of Appendix 9 to the GEM Listing Rules.  Due to the suspension of payment of the Investor Compensation Levy, investors are not required to pay Investor Compensation Levies in respect of sales and purchases of securities and futures contracts with effect from 19 December 2005 until terminated by a termination notice published by the SFC.  Effective 1 December 2006 , the Transaction Levy was reduced from 0.005% to 0.004% of the consideration for each purchase or sale of securities pursuant to the Securities and Futures (Reduction of Levy) Order 2006.  Effective 1 October 2010, the Transaction Levy payable by a buyer or a seller for a securities transaction was further lowered from 0.004% to 0.003% pursuant to the Securities and Futures (Levy) (Amendment) Order 2010. 

4

Treatment as mandated in Paragraph 6 of Appendix 8 to the Main Board Listing Rules - Trading Fee on New Issues (see also Paragraph 4 of Appendix 9 to the GEM Listing Rules).