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1. |
Electronic Disclosure Project (EDP) |
On 23 March, HKEx announced the initiative for straight-through electronic disclosure and to abolish the requirement for Main Board issuers to publish paid announcements in newspapers (Electronic Disclosure Project) will commence on 25 June, barring unforeseen circumstances.
In preparation for the Electronic Disclosure Project's implementation: the amended Listing Rules have been posted on the HKEx website; registration of users of the electronic submission system is virtually completed; briefing sessions and hands-on familiarisation sessions have been completed; HKEx's public viewing room was opened in February to give investors free access to HKEx's websites, where they can search and view issuers' documents, and the Securities and Futures Commission (SFC) website; HKEx has issued a Communication Paper to inform the market and stakeholders of the impact of the project.
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The Electronic Disclosure Project commenced on 25 June and operations have been smooth overall.
Subscribers for the free Issuer News Alert Service increased by about 50 per cent to nearly 31,000 between mid-April and mid-July. |
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2. |
Review of the Growth Enterprise Market (GEM)
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HKEx is continuing to explore proposals with the SFC. Once proposals are agreed it plans to consult the market. |
HKEx will publish its consultation paper at the end of July. (Note: HKEx published the consultation paper on 27 July.) |
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3. |
Consultation on period financial reporting |
Not included in this issue. |
HKEx plans to publish a consultation paper in the second half of this year on possible amendments to the Listing Rules on period financial reporting.
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4. |
Possible introduction of depositary receipts |
Not included in this issue. |
HKEx is studying the possible introduction of a framework that would allow issuers to list depositary receipts on the Stock Exchange.
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5. |
Proposed introduction of a closing auction session in the securities market |
HKEx has published a consultation paper on the proposed introduction of a single price auction in the securities market after regular trading. The proposal is aimed at improving the determination of closing prices, supporting trading at the market close, bolstering market liquidity and strengthening the securities market.
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The consultation period ended 7 May with a total of 23 sets of market comments having been received. The majority of the respondents were in support of the proposal. (Note: HKEx published a consultation conclusions report on 19 July.) |
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6. |
Exploration of new financial products / services and review of existing products / services in the derivatives market |
HKEx is consulting regulatory authorities on the possible introduction of futures contracts based on US dollar / renminbi (RMB) and Hong Kong dollar / RMB.
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HKEx is conducting further studies on the RMB futures.
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HKEx expects to award a contract by the second half of this year for a study of the feasibility of trading commodities derivatives and emissions-related products in Hong Kong. |
HKEx announced the appointment of consultants on 18 July. McKinsey & Company is appointed to conduct a study on the trading of commodities derivatives, including energy (such as oil, power and gas), base metals and agricultural products. Mallesons Stephen Jaques (with subconsultants Climate Focus BV and International Environmental Trading Group) is appointed to study the trading of emissions-related products. The study is expected to take about four months.
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7. |
Suspension of
the tick rule for short selling |
Not included in this issue. |
HKEx is working closely with the SFC to finalise a proposal on the suspension of the tick rule for short selling in normal business situations; the proposal is targeted to be implemented in the fourth quarter of this year. It is expected that the proposed suspension of the tick rule, when implemented, would further enhance the efficiency of the price discovery process on the Stock Exchange.
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8. |
Introduction of Third Party Clearing (TPC) in the securities market |
Briefing sessions to present the proposed TPC model to CCASS Participants for their better understanding of the TPC proposals were held in March. Seminars are being organised for interested clearing service providers to discuss practical issues and commercial concerns with Exchange Participants (EPs) interested in outsourcing their back office clearing and settlement operations. The TPC model is now being finalised for implementation. The tentative timeframe for the implementation is by end of the year.
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Discussion forums were held for experienced clearing service providers to speak on outsourcing of clearing and settlement operations to EPs. The TPC model has been finalised and an overview of the model will be published on HKEx website in August together with Frequently Asked Questions. Implementation remains scheduled for the fourth quarter of this year. |
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9. |
Harmonisation of collateral policies for the three clearing houses |
HKEx is continuing its efforts to address the legal implications of adding and accepting more foreign government debt securities as non-cash collateral before finalising the necessary amendments to the rules and procedures of the respective clearing houses in relation to the admission of all the new types of non-cash collateral.
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HKEx is continuing with the efforts described in the previous status report. |
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10. |
Network consolidation for major market systems on a new network (SDNet) |
AMS/3 line installation for SDNet is proceeding according to plan.
Briefing sessions for EPs are planned for mid-April. Full scale connectivity tests and market rehearsal will be conducted in May. HKEx plans to do the rollout by batches in June.
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The SDNet was fully completed after the successful migration of all AMS/3 circuits to the network on 16 July. SDNet provides higher bandwidth, improved reliability, and greater operational efficiency and network cost reduction to both HKEx and Participants.
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11. |
AMS/3 Open Gateway (OG) / Multi-Workstation System (MWS) upgrade |
The software upgrade for OGs / MWSs for which the hardware can be retained started in January and the plan is to complete the upgrade by the end of April. |
The AMS/3 OGs and MWSs installed at EPs’ premises were upgraded in April to address the technology obsolescence as well as to prepare for further AMS/3 system capacity expansion.
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12. |
Derivatives market system upgrades
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HKEx has done capacity planning for HKATS, DCASS and PRS due to derivatives market growth and intends to implement the plans by phases in midyear.
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The DCASS and HKATS capacity upgrades were completed in May and July respectively. The PRS capacity upgrade is planned for August. |
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HKEx also plans to upgrade HKATS and DCASS to Release 19.1, which is provided by OMX Technology. The project starts in April and the tentative target for completion is by early next year.
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The HKATS and DCASS upgrade to application software Release 19.1 is in progress. HKEx plans to complete the upgrade by early next year. |
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13. |
Expansion and improvement of CCASS Stock Segregated Account with Statement (SSA) Service |
Following the introduction of new features to the service in January, further enhancements which include electronic voting service, affirmation of share movement and money settlement via CCASS are progressing well and scheduled for implementation in the middle of the year. HKEx will work with CCASS Participants and stock broker associations to actively promote the service to investors. |
Further enhancements, which include electronic voting service, affirmation of share movement and money settlement via CCASS were implemented on 9 July. HKEx is working with stock broker associations to actively promote the service to investors. |