Thanks to the support of listed issuers and their efforts in adapting to the new arrangements, the Hong Kong securities market entered into a new era of electronic disclosure on 25 June 2007. The commencement of the Electronic Disclosure Project (EDP) allowed straight-through publication of issuer documents on the HKEx website. Furthermore, it made publishing full paid announcements in local newspapers optional for issuers.
In the first week of EDP operations (25-29 June; five business days), 1,410 announcements and other documents were successfully submitted to HKEx by 518 issuers (including 473 equity issuers) through the designated electronic submission system (ESS) for publication on the HKEx websites. The size of majority of documents uploaded by issuers was 500 KB or less and the average processing time for document uploading was two seconds, excluding the Internet transmission time which is beyond HKEx’s control. HKEx did not receive any reports of system-related problems from ESS users or concerns about system performance.
The HKEx website, which is now the primary channel of issuer news dissemination, recorded over 19 million page views (excluding access to IPO allotment result announcements) over the first five business days of EDP operations. HKEx did not observe nor did it receive any complaints about online traffic congestion affecting investors’ access to issuer documents through the HKEx website.
The HKEx service that provides email or SMS alerts on the latest issuer-related news published on the HKEx website transmitted 265,116 alerts between 25 and 29 June. The service was recently enhanced by doubling the maximum number of stocks a subscriber may select from 10 to 20, and by reducing the interval between the dissemination of alerts from one hour to 30 minutes. HKEx also conducted a promotion campaign for the alert service in June and as of 30 June had registered 29,809 users.
Both access to issuer documents through the HKEx website and the email/SMS alert service are provided by HKEx free of charge*.
“We would like to thank all listed issuers and their representatives for participating in our seminars, workshops and system rehearsals to prepare for the rollout of the electronic disclosure project. Their participation was essential and their cooperation has led to the successful launch of EDP,” said Richard Williams, HKEx’s Head of Listing. “Our support to issuers on the use of the ESS and guidance on compliance with the relevant Listing Rules will continue. Issuers can call the ESS support hotline for assistance on using the system and comprehensive EDP reference information is available on the HKEx website.”
Prior to the launch of EDP, issuers were invited to attend seminars and to participate in workshops and rehearsals to help them become familiar with EDP operations and procedures. They were also asked to submit written confirmation of their operational readiness for the 25 June EDP launch date. Over 99 per cent of all issuers indicated that they were ready for the launch of EDP.
There were a few isolated incidents where issuers had mistakenly stated incorrect trading resumption times in their announcements or attached an incorrect version of a document for publication. The mistakes were rectified by subsequent correction announcements and remedial actions. None of the incidents were related to technical problems of the ESS or any other HKEx systems, and none of them resulted in a misinformed or disorderly market.
“Listed companies must comply with the new rules and procedures so we are reminding them to allow sufficient time to meet the deadlines for submitting announcements and to take due care in approving submissions for publication. Initial experience suggests that issuers should also consider building some flexibility into the wording of their draft announcements before presenting them for board approval to provide sufficient time for their staff to prepare and submit the final announcements in an appropriate form,” said Mr Williams. “I would encourage issuers to call their respective case officers in the Listing Division if they have questions about the EDP related Listing Rules. We are happy to provide assistance, especially during this early stage of the transition to the electronic environment.”
All issuers are now required to submit their announcements to HKEx for publication on its websites. During the six-month transitional period that began with the launch of EDP and runs through 24 December, a Main Board issuer is required to publish a notification in local newspapers whenever it publishes an announcement on the HKEx website and its own website, while Main Board issuers without their own websites are required to publish full paid announcements in local newspapers when their announcements are published on the HKEx website. Main Board issuers that do not have their own websites after 25 December will still be required to publish full paid announcements in local newspapers when their announcements are published on the HKEx website. From 25 June 2008 onwards, every issuer must have its own website where the public is able to access its Listing Rules-related documents free of charge.
* Providers of mobile phone service may impose charges on recipients of SMS messages.