- USM requirements to apply to new issuers from early 2026; other prescribed securities to transition to USM in batches between 2026 and 2030 with transitional arrangements
- Exchange welcomes drafting comments on consequential changes to the Listing Rules by 30 June 2025
- USM implementation details and reference materials available on the HKEX website
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to provide updated reference materials for market participants and issuers in preparation for the implementation of the Uncertificated Securities Market (USM) regime in 2026.
USM will apply to prescribed securities1 listed or to be listed on the Stock Exchange of Hong Kong Limited (the Exchange), reducing the need for paper and manual processes, facilitating straight-through-processing and elevating Hong Kong's financial market infrastructure.
Following the completion of relevant legislative processes, USM will become effective in early 2026 (USM Implementation Date), subject to market readiness. HKEX has been working closely with the Securities and Futures Commission (SFC) and the Federation of Share Registrars Limited to support operational readiness for the implementation of USM.
Upon the full implementation of USM, nearly all Hong Kong-listed securities will be held in uncertificated form. This advancement aligns with global best practices and enhances market efficiency, providing investors with shorter processing times and the convenience of managing their portfolios electronically. Other market participants, including issuers and intermediaries, will also benefit from increased efficiencies through streamlined and automated processes.
The actions required and corresponding deadlines for new applicants to listing and listed issuers are summarised in the table below.2
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ACTION REQUIRED
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DEADLINE
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New Applicants
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Appoint an ASR3
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Prior to their date of listing, if that date falls after the USM Implementation Date
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Amend their constitutional documents (and/or terms of issue of the relevant securities) to align with applicable USM legal and regulatory requirements
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Provide information on their USM participation in their listing document
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Listed Issuers
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Appoint an ASR2
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By USM Implementation Date
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Amend their constitutional documents (and/or terms of issue of the relevant securities) to align with applicable USM legal and regulatory requirements
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Within one year of USM Implementation Date
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Announce the latest date by which their Prescribed Securities will become Participating Securities4 (referred to as Specified Date)
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As soon as reasonably practicable and no later than one business day after being notified of their Specified Date
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Announce their plan for their Prescribed Securities to become Participating Securities, including a link to a dedicated webpage on their website providing information on its plan
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As soon as reasonably practicable following the finalisation of their plan for their Prescribed Securities to become Participating Securities
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Announce a reminder that their securities will shortly become Participating Securities
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No later than 21 business days prior to their securities becoming Participating Securities
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To facilitate issuers in their preparation for USM implementation, the Exchange has published an Information Paper outlining the relevant changes to the Listing Rules. The Exchange welcomes drafting comments on the proposed changes to the Listing Rules, which has been prepared with reference to the Consultation Conclusions on Proposed Subsidiary Legislation, Code and Guidelines for Implementing an Uncertificated Securities Market In Hong Kong published by the SFC in July 2024, and other related USM legislative amendments. Any written comments are welcome by 30 June 2025 via e-mail to response@hkex.com.hk.
In addition, the Exchange will introduce new operational procedures for the transfer of participating securities to and from HKSCC Nominees Limited. There will also be a transition period where special arrangements will be in place with respect to the deposit, dematerialization and withdrawal of physical certificates prior to the relevant prescribed securities becoming participating securities. Investors and market participants should take note of the USM operational model and make appropriate preparations for the transition. Details of the transitional arrangements will be announced in due course.
More information and other reference materials about USM implementation will be updated regularly and available on the HKEX website.
Notes:
- Prescribed securities means:
(a) shares, other than shares that constitute interests in a collective investment scheme authorized by the SFC under section 104 of the SFO (authorized CIS);
(b) depositary receipts;
(c) stapled securities;
(d) interests in an authorized CIS which, under the terms of issue of the authorized CIS, may be withdrawn from a clearing and settlement system operated by, or on behalf of, HKSCC;
(e) subscription warrants issued for capital fund raising purposes that entitle the holder to subscribe for securities (whether issued or unissued) that fall within a class or description of securities specified in sub-paragraphs (a), (b), (c) or (d) above; or
(f) rights under a rights issue to subscribe for securities that fall within a class or description of securities specified in sub-paragraphs (a), (b), (c) or (d) above; and that are listed or to be listed on the Exchange.
- Further details will be included in guidance the Listing Division will publish in due course.
- “Approved securities registrar” or ASR means:
An approved securities registrar, i.e., a person approved by the SFC to provide securities registrar services under new section 101AAG of the SFO introduced under section 7 of the Securities and Futures and Companies Legislation (Amendment) Ordinance 2021.
The requirement to appoint an ASR by the USM Implementation Date applies to all issuers of prescribed securities, regardless of whether their Prescribed Securities become Participating Securities (please see footnote 4 for definition).
- “Participating securities” has the same meaning as in rule 4 of the Securities and Futures (Uncertificated Securities Market) Rules.
About HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code: 388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange.
As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.
HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.
www.hkexgroup.com
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