HKEx Publishes Consultation Conclusions On The Proposed Introduction Of A Closing Auction Session For Its Securities Market

Hong Kong Exchanges and Clearing Limited (HKEx) published today (Thursday) its consultation conclusions on the proposed introduction of a closing auction session for its securities market and said there were tentative plans to implement the session in February 2008.

The report presents the results of a public consultation held earlier this year on the proposal to introduce a closing auction that would be held after the continuous trading session.  HKEx received a total of 23 sets of market comments.  The respondents comprised members of the brokerage community, investment management and advisory firms, and representatives from the banking and legal sectors.  Most of them expressed strong support for the proposed closing auction session. 

"We are pleased that the market supports the proposal," said HKEx Chief Operating Officer Gerald Greiner.  "The respondents generally recognised that the closing auction is an internationally proven mechanism that aims to provide a fair and market-driven method of closing a trading session and determining closing prices.  Implementing the closing auction session is part of HKEx's commitment to continuously enhance its trading infrastructure based on market demand."

The consultation conclusions report and copies of submissions are available on the HKEx website at http://www.hkex.com.hk/consul/conclusion/consultcon.htm and http://www.hkex.com.hk/consul/response/responses1.htm.

In view of the broad support received, HKEx will implement the closing auction model substantially as originally proposed.  The only changes are extensions of the order input period and the pre-order matching period from 5 minutes to 8 minutes and from 1 minute to 2 minutes respectively in response to market feedback.

The effective trading hours of the securities and derivatives (only for stock index futures/options) markets will be extended with the introduction of the closing auction session.  Details are shown in the tables overleaf and elaborated in the consultation conclusions report (in paragraphs 25, 33 and Appendix V).

Subject to the approval of the necessary rule amendments by the Securities and Futures Commission, implementation of the closing auction session is tentatively scheduled to take place in February 2008.  HKEx will make further announcements in due course.

Table 1 - Closing Time of the Securities Market

Table 2 - Closing Time of Derivatives Markets except on the Last Trading Day

Table 3 - Closing Time of Derivatives Markets on the Last Trading Day