| 1. |
Review of the derivative warrant market |
HKEx reviewed the derivative warrant market and published its views in October last year. It continues to work closely with the Securities and Futures Commission (SFC) and the industry to further develop specific market enhancement proposals.
To further expand the disclosure and dissemination on the HKEx website of information about derivative warrants, the warrant market and related educational materials, HKEx is proposing to develop a Derivative Warrant Resource Centre.
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HKEx submitted comments on 27 January to the SFC on the Commission’s report on the derivative warrant market in Hong Kong.
On 31 March, the SFC published an update on its Six-Point Plan for Hong Kong's derivative warrant market. HKEx looks forward to working closely with the SFC and the industry to finalise and implement those initiatives deemed appropriate for further improving the derivative warrant market in Hong Kong. |
| 2. |
Amendments to the Listing Rules to require Main Board issuers to publish short announcements in newspapers instead of full announcements |
HKEx published an exposure paper in mid-November last year with regard to its proposal to abolish the requirement for Main Board issuers to publish paid announcements in the newspapers and related matters, and had been seeking market views by 13 January. HKEx plans to implement the proposal in the third quarter of the year.
Work for the enhancement of electronic submission service and Issuer Information System will commence in the first quarter.
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Responses to the exposure paper have been posted on the HKEx website. A draft exposure conclusions paper and proposed final rule amendments will be considered by the Listing Committee in the near future.
Work on the enhancement of HKEx’s electronic systems for the submission and dissemination of regulatory information and associated disaster recovery measures is underway. |
| 3. |
Review the composition and structure of the Listing Committees |
HKEx will amend the Listing Rules regarding the composition of the Listing Nominating Committee and the Listing Committee. An announcement on the matter is scheduled to be released shortly. |
In February, HKEx published the way forward on the structure for listing decision-making. The revamp will be addressed in two phases. Changes in the first phase include expanding the Listing Committee to a minimum of 28 members, at least eight of whom will be investor representatives. Another change is that the Listing Nominating Committee now comprises three non-executive directors of HKEx, and the chairman and two executive directors of the SFC.
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| 4. |
Review of the Growth Enterprise Market (GEM) |
HKEx has conducted over 40 interviews with stakeholders, board members and Listing Committee members to ascertain their views on GEM, and carried out research on alternative markets in other jurisdictions. HKEx is preparing a paper to seek market views and will release it soon.
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The deadline for submissions on the discussion paper is 30 April. HKEx will consider the comments received and, if appropriate, formulate specific proposals and initiatives for GEM which will be the subject of a consultation paper at a later date. |
| 5. |
Phase 2 Reductions of Minimum Securities Trading Spreads |
Not included in this issue. |
The HKEx Board has approved the Phase 2 proposal for the reduction of minimum trading spreads, which applies to securities trading between $0.25 and $20. Subject to the approval of the necessary rule changes by the SFC, the Phase 2 proposal is expected to be implemented in July. Market participants will be informed of the implementation details as soon as they are available.
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| 6. |
Exploration of new financial products / services and review of existing products / services |
Callable Bull/Bear Contracts (CBBC)
The CBBC market model and related rule changes were approved by the SFC on 21 November last year. The market will be developed with the requisite market education measures and HKEx plans to introduce the product in the first half of the year.
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HKEx plans to introduce a market for CBBC in June. The market will be developed with the requisite market education measures. |
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Long-dated Index Options
The Derivatives Market Consultative Panel and active institutional investors have extended their support to this product concept. HKEx is planning to introduce longer dated contract months in Hang Seng Index Options and H-shares Index Options covering maturities up to 3.5 years and 2.5 years respectively, subject to the SFC’s approval.
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The SFC has approved HKEx’s proposed introduction of three long-dated contract months in H-shares Index Options and three additional long-dated contract months in Hang Seng Index Options. The six long-dated contract months were rolled out on 31 March. |
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Introduce new Combo orders
HKEx is studying introduction of tailor-made Combo orders in the derivatives market, and it is studying the feasibility of the introduction of Standard Combination Order Books for selected Hang Seng Index Option strategies in the derivatives market. |
HKEx is studying the feasibility of the introduction of tailor-made Combo orders in the derivatives market. In mid-March, HKEx introduced Standard Combination Order Books for selected Hang Seng Index Option strategies in the derivatives market. HKEx will assess the market demand as well as the capacity impact on the trading system following the March rollout.
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| 7. |
Review of market maker model for derivatives market |
Not included in this issue. |
HKEx plans to discontinue registration of Registered Traders, who are not Exchange Participants, and to register and hold responsible Exchange Participants as market makers for Futures Exchange products.
The new model is aimed at strengthening the roles of Exchange Participants and enhancing the quality of market makers as there will be prescribed minimum qualifications for third parties who participate in market-making activities.
HKEx will seek preliminary approval from the SFC on the particulars of the model.
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| 8. |
Harmonisation of collateral policies for the three clearing houses |
The first part of the HKCC and SEOCH collateral policy changes was implemented in August last year. Remaining changes will be implemented in the first half of this year; following that HKCC and SEOCH will accept euro-denominated government debt securities issued by Germany as non-cash collateral for margin obligations, and SEOCH will accept US treasury bills and notes as non-cash collateral.
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HKEx is preparing amendments to the rules and procedures of the respective clearing houses in relation to the admission of the new types of non-cash collateral. |
| 9. |
Network consolidation for major market systems on a new network (SDNet) |
Following the migration of Participants’ links for HKATS, DCASS and PRS to SDNet, the second phase of the network consolidation, the migration of the CCASS network to SDNet, will be implemented in the second quarter of this year.
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Installation of fibre circuits and routers for CCASS/3 for Participants has been completed. Market rehearsals and production readiness tests are being planned. Migration of the CCASS/3 network to SDNet is scheduled for June. |
| 10. |
Market systems capacity upgrade |
The AMS/3 capacity upgrade was completed in late December last year. HKEx is upgrading the capacity of HKATS, DCASS and PRS in January or February this year. The software used for the HKATS Network Gateways will also be upgraded in the second and third quarter of this year.
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The HKATS, DCASS and PRS capacity upgrade was successfully implemented and completed by phases in January and February. |
| 11. |
AMS/3 Open Gateway (OG)/Multi-Workstation System (MWS) upgrade |
Not included in this issue. |
Due to technology obsolescence, all AMS/3 OGs/MWSs installed in Participants’ premises will be upgraded. The pilot run is planned for June and the mass rollout will commence in the second half of this year.
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| 12. |
HKATS / DCASS Network Gateway (NG) upgrade to Windows 2003 |
Not included in this issue. |
Due to technology obsolescence, all HKATS/DCASS NGs installed in Participants’ premises are in the progress of being upgraded from Windows NT to Windows 2003. HKEx plans to complete the upgrade by the third quarter of this year.
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| 13. |
Renovation of the Trading Hall |
The first phase of the renovation project was completed and the trading area and media booths in the Trading Hall were opened for use on 16 January. HKEx plans to complete the second phase of the renovation project and officially open the Trading Hall and its connected public gallery in April. |
The opening of the Exchange Exhibition Hall has been scheduled for late April. The opening of the Exhibition Hall will mark the completion of the renovation project. |