HKEx Releases Strategic Plan for 2007-2009

Corporate

07 Dec 2006

Hong Kong Exchanges and Clearing Limited (HKEx) today (Thursday) released its Strategic Plan for 2007-2009. The plan is aimed at securing the continuing development of Hong Kong’s financial markets by further enhancing HKEx’s performance while improving overall market quality.

By capitalising on HKEx’s core strengths, the plan seeks to advance HKEx’s mission to be a leading international marketplace for securities and derivatives products focused on Hong Kong, Mainland China and the rest of Asia.

The plan, designed to make the most of opportunities and address challenges in an increasingly competitive environment, provides a roadmap for HKEx in the next three years along the following strategic themes:

Reinforcing HKEx’s position vis-à-vis the Mainland;
Further expanding business; and
Improving service delivery and quality.

It also identifies the attached 16 key initiatives which are likely to be implemented during the period.

To view HKEx’s Strategic Plan 2007-2009, please visit About HKEx under the Corporate section of the HKEx website at www.hkex.com.hk.

A presentation on the plan by HKEx Chief Executive Paul Chow at the roundtable luncheon of the Hong Kong Securities Institute today is available at the Speech section under the Press Room of the HKEx website.

Key Initiatives

The Strategic Plan will be brought into effect by initiatives. These initiatives will be confirmed through the annual budget and operating plan exercises to be conducted over the three-year period. Nonetheless, at the outset, 16 key initiatives are identified which are likely to play a major part in attaining the objectives of the Strategic Plan.

	Key initiatives
Listing	1.	Complete GEM review and related market development – The review of GEM will be taken forward and the proposals subjected to market consultation and subsequently implemented, as appropriate.
	2.	Implement ‘statutory backing’ – The Stock Exchange will prepare for the embodiment of certain key Listing Rules into statute by the Government, including proposals on any necessary realignment of the Listing function and modifications to the existing operational arrangements.
	3.	Open the equity listing regime to issuers from overseas jurisdictions – HKEx will facilitate the listing of issuers from a broader range of jurisdictions than at present, and promote this in overseas markets.
Trading	4.	Improve trading rights regime – A review will be conducted to bring the regime more into line with international practice and better facilitate access to HKEx’s markets.
	5.	Address barriers to Cash Market trading – A review will be conducted and efforts made to address existing barriers to expansion of the Cash Market.
	6.	Address barriers to Derivatives Market trading – A review will be conducted and efforts made to address existing barriers to expansion of the Derivatives Market.
	7.	Introduce further Mainland-related and renminbi-denominated products – HKEx will seek to develop and promote derivative products, including RMB futures contracts, that capture local and global interest in Mainland China. In the Cash Market, HKEx will endeavour to facilitate intermediaries’ product development efforts by providing an appropriate and flexible market structure.
	8.	Explore new product and service areas in order to diversify the product range and develop an Asian focus. Consultants will be engaged as appropriate to study the feasibility and potential for trading commodity futures and climate-related products in Hong Kong.
Clearing	9.	Facilitate overseas-based Clearing Participants – A review will be conducted and appropriate mechanisms will be considered to facilitate access by firms based overseas. The facility will be promoted in overseas markets.
Clearing	10.	Improve Investor Participant Account Service and Stock Segregated Account Service – To better protect investor assets and facilitate the further development of the brokerage industry, the HKEx will seek to further improve its Investor Participant Account Service and Stock Segregated Account with Statement Service.
Corporate	11.	Strengthen the accountability regime within HKEx – The conclusions of the consultancy review conducted in mid-2006 will be implemented and a regime established that links management rewards more directly to the achievement of business results. An improved succession plan for senior positions will be implemented progressively. Appropriate resources will be allocated for staff development and training to build talent.
	12.	Review HKEx organisation structure and deployment of resources – In order to support the strategic themes of the plan, a review will be conducted to realign the structure and human resources towards business expansion and customer service.
	13.	Further develop HKEx Management Information System (MIS) – To support improved and profitable service provision, HKEx’s customer-related MIS and finance MIS will be further developed.
	14.	Work towards consolidation of HKEx offices and data centres – A review will be conducted, and steps taken to consolidate the various offices and data centres to the extent feasible.
	15.	Review fee structure – HKEx will review its fees and charges so as to achieve better alignment with value added and international practice.
IT	16.	Review HKEx IT systems and services for possible efficiency improvement – While maintaining existing high levels of system reliability and security, a review will be conducted to seek further improvements in the efficiency of applications, IT service offerings and the time-to-market of IT-enabled functions, and the findings implemented as appropriate.

Updated 07 Dec 2006