The Board of Hong Kong Exchanges and Clearing Limited (HKEx) today (Friday) approved the implementation of the Phase 2 reduction of minimum securities trading spreads in two phases, with Phase 2A to be implemented in July after completion of a market rehearsal and subject to the approval of the necessary rule changes by the Securities and Futures Commission. 

Phase 2A covers securities trading between $2 and $20.  Phase 2A includes an interim modification to the minimum spread for securities priced between $2 and $5 to $0.01 from $0.005 in the original Phase 2 decision in order to provide better continuity in the spread table pending the introduction of Phase 2B.

During the six months from its implementation, HKEx will monitor the results of Phase 2A and will proceed in the first quarter of 2007 with the remaining part of Phase 2, that is, Phase 2B, subject to no systemic problems having arisen in Phase 2A.  Phase 2B covers securities trading between $0.25 and $2.

The market rehearsal on Phase 2 reduction in minimum trading spreads scheduled to be conducted tomorrow has been postponed. HKEx will inform market participants of the revised rehearsal timetable as soon as possible.

A table with the Phases 2A and 2B minimum spreads and other information is enclosed.  HKEx will inform market participants of the implementation details as soon as they are available.