| 1. |
Review of the derivative warrant market |
Not included in this issue. |
HKEx is reviewing the derivative warrant market, aiming at further raising the market's transparency. HKEx will also increase its efforts in market education on derivative warrants.
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| 2. |
Amendments to the Listing Rules to require Main Board issuers to publish short announcements in newspapers instead of full announcements |
HKEx proposes to require Main Board issuers to publish a short announcement in newspapers to inform the market of the publication of a full version of the announcement on the HKEx website and the issuer's website. The proposed requirement would be an interim measure to facilitate an orderly transition to a purely web-based news dissemination regime. The proposal is subject to system and operational readiness and the necessary final approvals.
HKEx will announce further details of its proposals in due course.
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HKEx will establish an enhanced dissemination infrastructure for listed issuer information and will improve the security features and user-friendliness of the eSubmission system.
HKEx plans to publish an exposure paper by the end of this year to seek public views on the transitional arrangements, proposed rule changes and requirements for listed issuers to establish their own websites and/or for third party websites.
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| 3. |
Review the composition and structure of the Listing Committees |
HKEx is considering the comments made in response to the consultation paper. It anticipates publishing consultation conclusions and final Listing Rule amendments that will implement those conclusions in the second half of this year. |
HKEx is finalising the consultation conclusions and rule amendments with the Securities and Futures Commission (SFC), the HKEx Board and the Listing Committee. The consultation conclusions and recommended amendments to the Listing Rules for implementing the conclusions will be published around the end of this year.
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| 4. |
Review of the Growth Enterprise Market (GEM) |
HKEx is reviewing GEM, which is now in its sixth year of operation, with a view toward publishing a consultation paper on proposed changes to reflect developments in the financial markets since the first GEM listing in late 1999. HKEx plans to consult market participants informally as part of its review for the preparation of the consultation paper.
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HKEx has established an internal working group to coordinate studies and develop proposals for the comprehensive review of GEM. Informal views are being sought from investors, issuers, professional bodies, market participants and other stakeholders. HKEx plans to publish a formal consultation paper by the end of this year or early next year.
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| 5. |
Exploration of new financial products and review of existing products |
Callable Bull/Bear Contracts (CBBCs)
HKEx is planning to set up the market infrastructure for CBBCs, subject to the SFC's approval.
Revamp stock options market
Two new stock options, Denway Motors and Esprit options, were introduced on 11 July.
Nine Exchange Participants joined HKEx to launch a six-month joint education programme. There were 44 seminars and Continuous Professional Training, or CPT, courses conducted, and total attendance was approximately 6,000.
Long-dated Index Options
Not included in this issue.
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HKEx's discussion with the SFC on the regulatory approval of CBBCs has reached the final stage. HKEx hopes that the market infrastructure for the introduction of the product will be ready early next year, subject to the SFC's approval and depending on the progress of investor and market education.
Futures and options on Bank of Communications, China Netcom and Ping An Insurance will be introduced on 7 November.
The second round of marketing calls/visits on stock options has been started. It covers broking agents and 42 Options Trading Exchange Participants.
HKEx is reviewing the market-maker obligations in stock options with a view to further enhance the stock options market's liquidity.
HKEx plans to introduce additional contract months in long-dated Hang Seng Index Options contracts and long-dated H-shares Index Options contracts early next year, subject to the SFC's approval.
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| 6. |
Review position limits for stock options, Hang Seng Index products and H-shares Index products
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Under discussion with the SFC. |
HKEx is seeking approval of the SFC to revise the position limit and reporting level for stock options. Further discussion with the SFC is necessary for index product changes. |
| 7. |
Scripless market (as recommended in the 1999 report by the Steering Committee on the Enhancement of the Financial Infrastructure) |
The SFC is working with the Government to prepare for the public consultation on the draft Bill on the enabling legislation.
HKEx has prepared drafts on the business requirements and interface specifications of the operational arrangements between Hong Kong Securities Clearing Company, or HKSCC, and the share registrars to support uncertificated shareholdings of CCASS. The documents are being reviewed by the Federation of Share Registrars (FSR).
Further discussions on the various options for the scripless transfer model are held between FSR and HKEx to address the market concerns and to come up with a viable model for the long term scripless securities market operations.
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HKEx has finalised with the FSR the operational arrangements and system changes for the implementation of the initial phase of the scripless initiative, dematerialisation of physical scrip in the Central Clearing and Settlement System Depository.
The SFC and the Financial Services and the Treasury Bureau are still in the process of finalising the legislative changes for the implementation of a scripless market. The commencement of the initial phase of dematerialisation is subject to the enactment of the enabling legislation.
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| 8. |
Network consolidation for major market systems on a new network (SDNet) |
User Acceptance Test to accept the SDNet from PCCW is in good progress and will be completed by the end of July 2005.
Participant circuit installation activities for HKATS/DCASS/PRS network will be substantively completed in July 2005.
Market Rehearsal Test for HKATS/DCASS/PRS will be conducted between August and September 2005.
HKATS/DCASS/PRS network will be migrated to the SDNet in the fourth quarter of 2005 as planned.
The rental of Participant circuits for HKATS/DCASS/PRS will be reduced by 20 per cent upon migration to the SDNet.
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The construction and implementation of the SDNet has been completed according to plan. Following the successful completion of various tests, including market rehearsals, and approval of the required rule changes by the SFC, SDNet is ready for production use. The migration of Participants' links for HKATS, DCASS and PRS to SDNet is being performed in four batches over four weekends in October. The first batch of Participants' links started to operate on SDNet on 10 October. The HKATS/DCASS/PRS line rentals will be reduced by 20 per cent. |
| 9. |
Market systems capacity upgrade |
Not included in this issue. |
The AMS/3 capacity upgrade exercise has commenced and HKEx plans to complete it in the fourth quarter this year. The capacity planning for HKATS, DCASS and PRS has also been formulated and HKEx plans to implement it by the end of this year.
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| 10. |
Renovation of the Trading Hall |
The renovation is being conducted and will be completed in three phases:
- Relocation in the Trading Hall of some Exchange Participants and partial sealing off of the hall for Phase 1 renovation: July 2005
- Completion of the new trading area: December 2005
- Completion of the exhibition area and other contiguous areas: Second quarter of 2006
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The renovation of the Trading Hall is in progress. Since early August, part of the hall has been sealed off for the construction of the new trading facilities. The renovation of the sealed-off area is expected to be completed in late December and floor traders will be able to move in to their new booths in January next year. The design of the facilities in the new non-trading area is ongoing and construction work on this area will begin in January next year.
New trading booths will be provided at a monthly fee of $2,800 per trading booth for a binding three-year period.
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