HKEx Invites Market’s Comments on the Introduction of a Price Control Mechanism in its Securities Market’s Closing Auction Session
Market Operations
28 Nov 2008
Hong Kong Exchanges and Clearing Limited (HKEx) invites market’s comments on the introduction of a price control mechanism during the Closing Auction Session (CAS) in the securities market to restrict excessive price changes.
Three different approaches for setting the price control limit are presented in a consultation paper published today (Friday):
| (ii) |
a price control limit based on a pre-set number of trading spreads from nominal prices at 4 pm; and
|
| (iii) |
a price control limit based on the day high and day low prices at 4 pm plus and minus a pre-set number of trading spreads.
|
HKEx also solicits market’s views on whether HKEx should suspend the CAS and consider re-introducing it when there is a market consensus on the enhancement measures.
The CAS was introduced to the HKEx securities market on 26 May this year following a public consultation in 2007. The consultation paper released today is the result of HKEx’s plan to consult market participants on possible enhancements to the existing closing auction mechanism based on experience with the CAS.
HKEx has an open mind on the way forward for the CAS and welcomes comments from all market participants.
The consultation paper and the questionnaire for response can be downloaded from the HKEx website (www.hkex.com.hk). After the consultation period ends on 31 December 2008, HKEx will review the submissions and publish consultation conclusions, including a summary of the main points made by respondents and a way forward based on market response.