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HKEx and LSE to develop listing programme and consult on trading collaboration

Corporate
23 May 2002

Hong Kong Exchanges and Clearing Limited (HKEx) and the London Stock Exchange (LSE) are working together to make it easier for companies to list in both Hong Kong and the UK. In addition, the exchanges plan to introduce the trading of HKEx stocks on the London Stock Exchange's SETS trading system and LSE stocks on the Hong Kong's trading system AMS/3.

Discussions on these projects started earlier this year. Both exchanges will now meet with their market participants to seek their views on the proposed trading arrangements.

A listing facilitation programme is being developed to enable companies listed on one exchange to list on the other through a streamlined process. The programme is designed to attract companies seeking greater access to the capital markets in Europe and Asia.

The trading collaboration will aim to provide HKEx and LSE customers with the opportunity to trade liquid securities from both markets on local electronic systems in local trading hours. Securities transactions would be cleared in the local market and settled in the securities settlement system in either Hong Kong or the UK.

The exchanges will now begin discussions with market participants on the optimal terms for the proposed trading collaboration and potential market demand. If a sufficiently attractive business case can be developed, the exchanges would seek to introduce the trading collaboration in 2003. These proposals will be subject to regulatory approval.

Clara Furse, Chief Executive of the LSE, said, "Both exchanges have a global outlook and strong liquid markets. Both play a leading role in their regions. So it is natural for us to explore ways to extend our reach across time zones. I believe by pooling the strengths of Hong Kong and London, investors and issuers will find the two marketplaces an essential part of their global financial map."

K C Kwong, Chief Executive of HKEx, described the business relationship with the LSE as an important step in HKEx's strategic plan to become the Asian hub of the global financial markets. He said, "This collaboration will be beneficial to both exchanges, our market participants and shareholders. It will broaden our customer base, diversify our product range and provide additional value-added services to customers across a broader geographical area. Ultimately, these proposals will contribute to the long-term business growth of both marketplaces."

About the London Stock Exchange (LSE)

The London Stock Exchange is one of the world's leading equity exchanges and a leading provider of services that facilitate the raising of capital and the trading of shares.

The London Stock Exchange is the most international equities exchange by trading in the world and Europe's largest pool of liquidity. By the end of 2001, the market capitalisation of UK and international companies on its markets amounted to £4.1 trillion, with over £5.6 trillion of business transacted over the year.

The London Stock Exchange is a Recognised Investment Exchange (RIE) under the Financial Services and Markets Act 2000 and is supervised by the Financial Services Authority.

About Hong Kong Exchanges and Clearing Limited (HKEx)

HKEx is the publicly listed holding company of the Hong Kong stock and futures exchanges and their related clearing houses. As of the end of April 2002, it has a market capitalisation of US$1.85 billion. It is the authority for listing of securities in Hong Kong.

HKEx is second only to Tokyo Stock Exchange in Asia as an international stock exchange, in terms of market capitalisation; and is ninth largest in the world.

HKEx operates a wholly electronic automatic order matching and execution trading system, and a linked electronic central clearing and settlement system. Settlement is on the second day following a transaction (T+2).

Futures and options are also traded on a wholly electronic trading system and all transactions are guaranteed and cleared through a linked electronic system.


Updated 23 May 2002