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HKEX to Implement VCM 2nd Phase Enhancement on 29 March

Market Operations
05 Mar 2021

Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce that it will implement the second phase enhancement of the Volatility Control Mechanism (VCM) in its securities market on 29 March 2021.

The first phase enhancements were successfully launched in May 2020, and currently only one trigger per applicable security is allowed in each trading session. The second phase enhancement will allow multiple triggers of the VCM per applicable security in the same trading session.

"We are pleased the first phase of the Volatility Control Mechanism enhancements have been well received by the market. In view of the orderly market operations since the launch of the first phase, we will implement Phase 2 as planned to further strengthen our market integrity,” said HKEX’s Head of Markets Wilfred Yiu.

HKEX's VCM is designed to prevent extreme price volatility amongst individual stocks and was first introduced to the securities market in August 2016.

HKEX proposed the VCM enhancements in a consultation paper in 2019. This followed guidance issued by the International Organisation of Securities Commissions asking regulated markets to review and adjust their volatility controls to ensure that they stay relevant with respect to the latest market developments.

Further details of the VCM can be found on HKEX website.

 

 

About HKEX

Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets.  HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.

HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited.  This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange (QME), in China, in 2018.

HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.

www.hkexgroup.com

 

Ends

Updated 05 Mar 2021