HKEx Sets Date for Reduction of Minimum Trading Spreads for Shares Trading Above $30 and Changes in AMS/3 Trading Parameters
Hong Kong Exchanges and Clearing Limited (HKEx) will reduce minimum trading spreads for shares trading above $30 and change trading parameters of AMS/3, the Third Generation Automatic Order Matching and Execution System, on Monday, 4 July this year. Spreads for shares priced at or below $30 will remain the same.
The date was set after the successful completion of market rehearsals during the weekends of 18 and 25 June. The Securities and Futures Commission has approved the rule changes required for the reductions. As of 27 June, there were 29 shares priced above $30 (see Attachment 2).
HKEx published a consultation paper on the reduction of minimum trading spreads on 6 August last year. The proposal to reduce minimum spreads was aimed at increasing the competitiveness of HKEx's markets, improving market efficiency and enhancing market liquidity. The proposal was also aimed at making spreads more uniform. The consultation results were considered by the HKEx Board in December last year and the Board decided that minimum trading spreads for shares trading above $30 would be reduced.
To complement the spread reductions, certain AMS/3 trading parameters have been modified (see Attachment 1). Similar to the current arrangements, all securities other than stock options, debt securities and securities authorised to be traded in accordance with the minimum trading spreads for debt securities will have the same minimum trading spreads as shares.
Detailed information on the consultation paper, consultation conclusions and respondents' submissions, as well as the questionnaire on proposed changes in trading parameters and other settings, is available on the HKEx website at http://www.hkex.com.hk.
Attachment 1
Reduction of Minimum Spreads for Shares
Currency unit #
|
0.01 |
0.001 |
No Change |
|
0.25 |
0.005 |
No Change |
|
0.50 |
0.010 |
No Change |
|
2.00 |
0.025 |
No Change |
|
5.00 |
0.050 |
No Change |
|
30.00 |
0.100 |
0.050 |
|
50.00 |
0.250 |
|
100.00 |
0.500 |
0.100 |
|
200.00 |
1.000 |
0.200 |
|
500.00 |
0.500 |
|
1,000.00 |
2.500 |
1.000 |
|
2,000.00 |
2.000 |
|
5,000.00 to 9,995.00 |
5.000 |
# Currency unit refers to Hong Kong dollar and other currencies.
Changes in AMS/3 Trading Parameters
| 1. |
Quotation Rules |
8 spreads |
24 spreads
|
| 2. |
Price warning
- 1st level
- 2nd level (other than warrants)
- 2nd level (warrants only) |
10 spreads
15 spreads
30 spreads
|
20 spreads
30 spreads
No Change
(ie 30 spreads)
|
| 3. |
Maximum number of matchable price queues for Enhanced Limit Orders and Special Limit Orders
|
2 queues |
5 queues |
| 4. |
Maximum outstanding orders per broker ID
|
2,000 |
4,000 |
Attachment 2
List of affected securities as at market close of 27 June 2005
|
1 |
CHEUNG KONG |
Main Board Stock |
76.5 |
|
2 |
CLP HOLDINGS |
Main Board Stock |
44.6 |
|
5 |
HSBC HOLDINGS |
Main Board Stock |
126 |
|
6 |
HK ELECTRIC |
Main Board Stock |
35.2 |
|
11 |
HANG SENG BANK |
Main Board Stock |
106 |
|
12 |
HENDERSON LAND |
Main Board Stock |
36.9 |
|
13 |
HUTCHISON |
Main Board Stock |
70.5 |
|
16 |
SHK PPT |
Main Board Stock |
76.25 |
|
19 |
SWIRE PACIFIC A |
Main Board Stock |
69.25 |
|
26 |
CHINA MOTOR BUS |
Main Board Stock |
63 |
|
44 |
HAECO |
Main Board Stock |
49.9 |
|
53 |
GUOCO GROUP |
Main Board Stock |
80.5 |
|
62 |
K M BUS HOLD |
Main Board Stock |
44.4 |
|
96 |
WING LUNG BANK |
Main Board Stock |
58 |
|
158 |
MELBOURNE ENT |
Main Board Stock |
31.9 |
|
302 |
WING HANG BANK |
Main Board Stock |
51.5 |
|
316 |
OOIL |
Main Board Stock |
33.6 |
|
330 |
ESPRIT HOLDINGS |
Main Board Stock |
54.75 |
|
440 |
DAH SING |
Main Board Stock |
51 |
|
511 |
TVB |
Main Board Stock |
44.2 |
|
522 |
ASM PACIFIC |
Main Board Stock |
36.9 |
|
945 |
MANULIFE |
Main Board Stock |
378 |
|
2888 |
STANCHART |
Main Board Stock |
144.5 |
|
830 |
THE NIPPON FUND |
Unit Trust |
51.5 |
|
2819 |
ABF HK IDX ETF |
Exchange Traded Fund |
100.7 |
|
2823 |
A50 CHINA TRACKER |
Exchange Traded Fund |
41.3 |
|
2828 |
HS H-SHARE ETF |
Exchange Traded Fund |
49.2 |
|
2833 |
HS HSI ETF |
Exchange Traded Fund |
144.5 |
|
2838 |
HS FXI C25 ETF |
Exchange Traded Fund |
83.75 |
- Securities traded at prices above $30 but without a closing price as at 27 Jun 2005 , if any, have been excluded from the above list.