Hongkong Clearing today (Monday) announced that its Electronic Initial Public Offering (EIPO) service will be used for T S Telecom Technologies Limited's flotation on the Growth Enterprise Market (GEM) starting from tomorrow (Tuesday). This is the first time that the EIPO service has been made available to Hong Kong investors.

Stewart Shing, Chief Executive of Hongkong Clearing, said: "The EIPO service is a significant step forward in respect of subscription of new shares, because it reduces costs and clerical errors, shortens turnaround time and eliminates the risk of lost cheques and share certificates. Since it uses the electronic mechanism of CCASS (Central Clearing And Settlement System), investors will benefit from added convenience and extended subscription hours.

"Listed issuers also benefit from the service because it is capable of handling larger volume of applications as compared to manual processing. Liquidity of the stocks on the first trading day will be further enhanced as the new shares will already be credited to the stock accounts of CCASS Participants (including Investor Participants)," said Mr Shing.

"At present, Hongkong Clearing is also in discussion with several companies that are considering the use of EIPO service for their Main Board or GEM listings," he added.

Simple Operations
Investor Participants in CCASS can call the CCASS Phone Operations Hotline and follow the voice prompts to apply for shares. They are only required to input the stock code and the quantity of the stock they are applying for.

CCASS then creates an Electronic Payment Instruction (EPI), which debits the application monies from Investor Participants' Designated Bank accounts and credits them to the issuer's receiving bank.

CCASS will send details of the applications to the registrar, which checks for multiple applications and makes adjustment for rejected EPIs from the receiving bank. When the registrar has completed the balloting process, share certificates, allotment files and refund instructions are sent to CCASS, which updates successful applicants' stock accounts. New EPIs will be generated to make refunds to Investor Participants whose applications are wholly or partially unsuccessful.

Investors who have not opened Investor Accounts in CCASS can apply for shares through CCASS Participants such as brokers or custodians, who have access to the EIPO service through their CCASS Terminals installed in their offices. Investors can also apply for shares using the existing yellow and white forms.