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Development of the Exchange Traded Funds (ETF) market
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- HKEx has been exploring opportunities to list and trade more local and regional ETF; and
- HKEx plans to list and trade fixed-income ETF.
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Market making has been introduced for ETF listed without IPO to improve liquidity. China Tracker ETF was listed without IPO in the fourth quarter last year. As of 25 March 2002, all the ETF now listed or traded on the Stock Exchange will be exempt from the Tick Rule. Other market infrastructure enhancements are being developed.
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Development and trading of Equity Linked Notes (ELN)
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HKEx continues to explore the introduction of ELN on the Stock Exchange.
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Market model is being developed for listing and trading of ELN. Listing rules are likely to be published in the second quarter of this year.
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Derivative warrants market
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Amendments to Listing Rules became effective on 10 December 2001 to require derivative warrant issuers to appoint a Stock Exchange Participant as liquidity provider for newly issued derivative warrants.
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New derivative warrants started to list on the Stock Exchange from 28 January. HKEx will closely monitor the market response and conduct a review in June.
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Further development of the bond market
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HKEx is exploring the further development of its bond market.
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HKEx is working with the SFC on simplification of the procedures for retail bond issues.
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Dow Jones Industrial Average Index Futures
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HKEx plans to introduce Dow Jones Industrial Average (DJIA) Futures for trading during Asian market hours.
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Draft contract specifications have been completed. Introduction date is likely to be announced in the second quarter of this year.
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Review of Rolling Forex market
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Not included in the report.
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Review is ongoing with a view toward possible changes.
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Review of HIBOR Futures market *
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Not included in the report.
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*Review is ongoing with a view toward reducing transaction cost by increasing contract sizes.
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Review on Pilot Program for Block Trade Facility
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Not included in the report.
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Review is ongoing with a view toward establishment of a standing Block Trade Facility
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Review on the corporate governance requirements under the Listing Rules
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HKEx plans to consult the market in the first quarter of 2002.
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Consultation Paper on Proposed Amendments to the Listing Rules relating to Corporate Governance Issues was published on 21 January. The consultation period ends on 22 April.
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Review of practices on dissemination of listed issuers' announcements
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Not included in the report.
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Consultation Paper was published on 12 March. The consultation period ends on 2 April.
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Integration of derivatives clearing
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HKEx plans to integrate derivatives clearing on the new Derivatives Clearing and Settlement System, or DCASS.
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General and technical briefings for Participants will be held in March. Implementation is scheduled for the fourth quarter this year.
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Upgrade of Central Clearing and Settlement System (CCASS/3)
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Not included in the report.
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Market rehearsals will be held in March and April this year. Implementation will be in stages following the successful completion of the rehearsals.
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Third party clearing
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Not included in the report.
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Third party clearing entails the transfer of clearing obligations from a trade-executing Exchange Participant to a Clearing Participant. Market participants are being consulted informally.
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Use of Bulletin Board for Stock Options
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Not included in the report
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Pending approval of rules and procedures changes by HKEx Executive Committee and SFC.
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