Proposal to Reduce Fees & Charges On Certain Securities, Derivative Products and Provision of Market Data

Introduction

HKEx proposes to reduce the fees and charges of SEHK and HKFE in respect of certain securities, derivative products and the provision of market data with the view to enhance its competitiveness and to increase the attractiveness of Hong Kong to both local and international issuers and investors. This proposal of further reducing fees is in line with various recent initiatives on fees and charges as well as streamlining the securities and futures market.

Proposal Outline

The proposed reduction of fees and charges will be in the following areas:-

1. Listing fees for derivative warrants;
2. Listing fees for debt securities;
3. Transaction costs for one-month and three-month HIBOR futures contracts; and
4. Fees for the provision of market data.

Listing Fees for Derivative Warrants

It is proposed to reduce the fees for the listing of derivative warrants on SEHK from the current level of HK$80,000 for each issue to HK$60,000 for the first issue of a derivative warrant relating to the same underlying company or instrument from the same issuer, and a further reduction to HK$40,000 for each subsequent issue relating to the same underlying company or instrument from the same issuer. This represents a reduction of 25% to 50% of the existing listing fees. This proposed fee schedule for the listing of derivative warrants will continue to be monitored and reviewed.

Listing Fees for Debt Securities

It is also proposed that the fees for the listing of general debt securities with an issue size exceeding HK$100 million will be reduced varying from about 10% to 35% depending on the actual issue size and the term to maturity. Further, fees for the listing of debt issuance programmes, also with an issue size exceeding HK$100 million will similarly be reduced varying from about 20% to 55% depending likewise on the actual issue size and term to maturity. A comparison between the current and proposed fees is set out below:-

The above proposed revised fee structure for listing of debt securities and debt issuance programmes in Hong Kong is competitive with a major debt listing exchange in Europe.

Transaction costs for one-month and three-month HIBOR futures contracts

The transaction costs for one-month and three-month HIBOR futures contracts are proposed to be reduced by 50% by varying contract sizes and corresponding fees payable to HKFE as follows: -

Fees for the provision of market data

It is proposed that charges for those subscribing for both the options and the futures market data, will in the future, receive the options market data for free. Current subscribers will be able to receive data from both options and futures markets so long as they continue to subscribe for the futures market data, and will thereby enjoy a 50% reduction in subscription fees.

Further, a new market data package based upon usage duration suitable to all those users who may access market depth data on an occasional basis will also be introduced. It is proposed to charge such occasional users at a base rate of HK$0.1 per minute for a continuous stream of real time data, subject to a minimum aggregate usage charge of HK$50 per month. Also, all subscribers for per quote or per unit time data will have their aggregate usage charge capped at HK$250 per month.

Conditions on the Proposal

Implementation of the above proposed new fee schedules will be subject to the approval by the Securities and Futures Commission of the amendments to the relevant rules of SEHK and HKFE.