FAQ

Part A – Overview of services in the Central Clearing and Settlement System (“CCASS”)

1.     What are the services of CCASS in its capacity as a central counterparty (“CCP”)?

Hong Kong Securities Clearing Company Limited (“HKSCC”) acts as a CCP and provides clearing services to transactions in securities that are accepted as eligible securities by HKSCC (“Eligible Securities”) via CCASS under the continuous net settlement (“CNS”) system.

CCASS clearing services determine the stock and money obligations of participants in CCASS (“Participants”) to a securities transaction to deliver or receive either cash or securities.

CCASS provides settlement services under which securities are credited or debited to the Participants' CCASS stock accounts and funds are recorded in the Participants' money ledgers on settlement day.

You may refer to the brief introductions to CCASS clearing and settlement below for more details.

[Overview of CCASS Clearing]

[Clearing Service – Securities]

[Settlement - Securities]

 

2.     What are the services of CCASS, in its capacity as a central securities depository (“CSD”)?

HKSCC accepts deposits of physical share certificates of Eligible Securities from Participants for settlement and safe custody. HKSCC also provides nominee and similar services to Participants in respect of Eligible Securities held by them in CCASS. It exercises shareholder rights in respect of the securities held in CCASS, and acts on instructions received from Participants.

You may refer to brief introductions to CCASS depository and nominee services below for more details.

[Depository]

[Common Nominee Services]

[Securities Admission into CCASS]

 

Part B – CCASS Shareholding Structure

3.     What is the shareholding structure within CCASS?

Please refer to the webpage of “Securities Admission into CCASS”

 

Part C - CCASS Admission Criteria

4.     What are the criteria for admission to CCASS?

When considering the eligibility of a security for acceptance in CCASS, HKSCC takes into account the type of security, its trading currency, fungibility, transferability as well as other operational issues. Please refer to the Section “Criteria for Admission” in the webpage of “Securities Admission into CCASS” and Questions 5 to 8 in the FAQs for further elaboration on type of securities, trading currency, fungibility and transferability.

 

5.     What are the types of securities eligible to be admitted into CCASS?

Eligible Securities admitted for clearing and settlement in CCASS refer to securities listed and/or admitted to trading on the Stock Exchange, which include ordinary shares, preference shares, depositary receipts, registered warrants, provisional allotment letters relating to nil-paid rights, debt securities, Exchange Fund Notes, Government Bonds, Specified Instruments, CMU instruments, Foreign Securities, China Connect Securities, ETFs, REITs, structured products and any other types of securities to be listed or traded on the Stock Exchange.

 

6.     What are the acceptable currencies in which an Eligible Security can be traded and settled?

Currently, Eligible Securities must be traded and settled in Hong Kong dollar, Renminbi or the United States dollar.

 

7.     Why are Eligible Securities deposited in CCASS by different Participants treated as fungible?

An issuer’s Eligible Securities of the same class deposited in CCASS by different Participants are treated as fungible by HKSCC because HKSCC normally does not mark or label any Eligible Securities to a particular Participant or to a particular transaction.

 

8.     What does it mean by the Eligible Security should be freely transferable or deliverable within CCASS? and what should issuers do if they are not?

HKSCC deems securities are not freely transferable or deliverable if registration of their transfer is subject to restrictions. For example, shareholding percentage limitations or nationality restrictions as imposed by the applicable law, constitutional documents of the Issuer and/ or legend specified on the securities certificates. If the shares in CCASS are not freely transferrable, shares with transfer restrictions are required to be withdrawn from CCASS.

Issuers must notify HKSCC if their issues are subject to such restrictions or limitations so that HKSCC can make necessary arrangements to comply with the relevant requirements. Issuers are advised to consult their legal advisers to determine whether their securities are subject to any transferability or shareholding limitations.

 

9.     What are the other major operational requirements that issuer has to comply with in order for its security to be admitted into CCASS as Eligible Security?

a)   Form of securities

Eligible securities have to be issued in registered form (i.e. identities of owners of securities are recorded in a register of members as maintained by an issuer). The number of shares represented by each share certificate or the number of warrants/ amount of exercise monies represented by each warrant certificate has to be stated clearly in the certificates in both words and numbers.

b) Machine imprinted signatures

Issuers are required to include a provision in their constitutional documents to validate mechanically executed share and/ or warrant transfer forms, or to permit HKSCC Nominees Limited (“Nominee”) to use machine imprinted signatures to execute transfers.

c) Appointment of multiple corporate representatives/ proxies

Issuers are required to include in their constitutional documents provisions permitting Nominee to appoint more than one corporate representative/ proxy to attend, vote and act at general meetings as if they were individual members, including the right of speech and the right to vote on show of hands and on poll.

Issuers are required to exempt Nominee, as the registered holder of all Eligible Securities deposited into CCASS, from certain requirements they may have imposed on their corporate members. These exemptions include a requirement for corporate members to submit a certified list of authorised officers, or notarised authorisation, or to produce share/ warrant/ debt securities certificates when a corporate representative/ proxy is appointed to attend and vote at a general meeting.

d) Exemption for disclosure of beneficial owners

HKSCC treats depositing Participants as principals and does not recognise the interests of the Participants’ clients in the Eligible Securities deposited into CCASS.

Issuers are required to exempt Nominee from any requirement to make declaration, representations and/or provide information on the nationality or identity of the beneficial owner of the securities.

e) Notification on defective/ lost certificates

Issuers are required to procure their registrars to notify HKSCC immediately details of certificates subject to transferability restrictions by order of the Court/ tribunal/ regulatory authority or certificates reported lost, cancelled and the new certificates issued and forward to HKSCC a copy of the relevant notification which the Issuers have submitted to the Stock Exchange or other authority.

In case of refusal to register certificates for reason of dispute in title, Issuers should procure their registrars to notify HKSCC immediately including details of the certificates.

Issuers should procure the registrars to follow the lost certificate replacement procedures as set out in the relevant subsection(s) of Sections 162-169 of the Companies Ordinance of the laws of Hong Kong in respect of application for replacement of lost certificates.

f) Last share registration date

Issuers are required to fix a last share registration date to determine shareholders’ and/ or warrantholders’ voting rights for each shareholders’ and/ or warrant holders’ meeting. Such last share registration date must be at least four business days before the meeting date and clearly stated in the notice of meeting to shareholders and/ or warrant holders. This will enable HKSCC and/ or the Nominee to communicate with CCASS participants for the purpose of recognizing their rights to take part in corporate actions.

g) Shareholdings in banking institutions or Stored Value Facilities (“SVF”) Licensee

There are statutory limitations on shareholdings in banking institutions and Stored Value Facilities (“SVF”) Licensee.  HKSCC will apply to the Hong Kong authorities, and if necessary overseas authorities, for waiver from these limitations.

Issuers are required to exempt the Nominee from any requirement, contained in their constitutional documents, to provide any evidence of such waiver.

h) Corporate communications

Issuers are required to submit the prescribed electronic forms through HKEx-EPS relating to different corporate communications (including benefit entitlements and meeting of holders of issuers’ securities) for publication on the official website of Hong Kong Exchanges and Clearing Limited. The electronic forms shall be submitted through HKEx-EPS in such time and manner as HKSCC may from time to time prescribe.

i) Provision of International Securities Identification Number (“ISIN”)

Issuers are required to contact the corresponding numbering agency according to the issuer’s place of incorporation to obtain an ISIN for the securities to be issued and allotted as a result of a new listing and inform HKSCC of the ISIN at least 3 business days before commencement of dealings of such securities; and to the extent there is any subsequent change to the ISIN (whether or not as a result of corporate action of the issuer), the issuer shall inform HKSCC of the new ISIN as soon as practicable after the change.

j) Listing Document Issuance

Issuers are required to submit the listing document (as defined in the Listing Rules of The Stock Exchange of Hong Kong Limited from time to time) of a new listing through HKEx-EPS for publication on the official website of Hong Kong Exchanges and Clearing Limited at or before 8:30 am on a business day at least three business days before commencement of dealings of the Company’s securities.

10.     What if an issuer fails to comply with the eligibility criteria?

Failure to comply with the eligibility criteria by issuers may lead to the refusal of acceptance of securities in CCASS or the discontinuation of eligibility for securities  accepted in CCASS. In such case, HKSCC will cease to provide its CCASS services to its Participants with regard to such security. The issuer’s securities may not be able to be cleared and settled in CCASS.  Upon the discontinuation of eligibility, CCASS Participants are required to withdraw the securities from the CCASS Depository. 

Please be advised that eligibility criteria may be revised and varied by HKSCC from time to time.  HKSCC also has the power to impose additional eligibility requirements on Eligible Securities accepted or to be accepted in CCASS when deemed necessary.

 

11.     Do issuers have other obligations after listing of the shares on the SEHK?

Issuers have continuing obligations to HKSCC and should ensure that any future issuance of securities would be in full compliance with the eligibility requirements of HKSCC in effect from time to time.  Issuers should notify HKSCC of any subsequent changes of name, ISIN, registered office and in constitutional documents, any future issuance of securities and activities of any nature that may affect the corporate structure or likely to have an impact on the shareholding and transferability of the Eligible Securities.