HKEx: Status Report On New Product And Market Development Initiatives(Status As Of 16 October 2009)

1.

Consultation on Periodic Financial Reporting

The Listing Committee proposes to consider this issue further towards the end of this year.

The Listing Committee proposes to consider this issue further at its policy meeting in November this year.

2.

Combined Consultation on Proposed Changes to the Listing Rules

Consultation conclusions for the three remaining issues under assessment will be published in due course. The Listing Committee and Stock Exchange Board have approved the consultation conclusions and rule amendments relating to self-constructed fixed assets will be published shortly, subject to the Securities and Futures Commission's ( SFC ) approval.

The consultation conclusions and rule amendments relating to self-constructed fixed assets and general mandates were published on 31 July and 9 October this year respectively. The consultation conclusions in respect of the one issue that remains under assessment (public float) will be published in due course.

3.

Review of Chapter 18 of the Listing Rules

Market consultation materials were considered on a preliminary basis by the Listing Committee. Now proceeding to the drafting stage.

The Consultation Paper on New Listing Rules for Mineral and Exploration Companies was published on 11 September this year and the deadline for submissions is 11 November.

4. 

Consultation on Proposed Changes to Filing and Checklist Requirements for Listing of Equity Securities

The consultation paper was published on 26 June this year. The deadline for submissions is 31 August. HKEx is streamlining its listing process.

The consultation conclusions were published on 2 October this year and the Rule amendments will come into effect on 2 November.

5.

Consultation on Proposals to Accelerate Rights Issues and Open Offers

Not included in this issue.

The consultation paper was published on 31 July this year and the deadline for submissions was 30 September.

6.

Consultation on Acceptance of Mainland Accounting and Auditing Standards and Mainland Audit Firms for Mainland Incorporated Companies Listed in Hong Kong

Not included in this issue.

The consultation paper was published on 28 August this year and the deadline for submissions is 23 October.

7.

Consultation on Proposed Amendments to the Listing Rules on Connected Transactions

Not included in this issue.

The consultation paper was published on 2 October this year and the deadline for submissions is 2 December.

8.

Exploration of New Financial Products / Services and Review of Existing Products / Services

Options with Flexible Features
HKEx aims to release an information paper on facilitating the execution of options with flexible features through HKATS in the third quarter of this year.

The information paper was published on 22 September this year. HKEx aims to introduce Flexible Index Options early next year, pending regulatory approval.

Emissions Products
The Consultation Paper on Certified Emission Reduction Futures was published on 26 June this year.

HKEx expects to publish its consultation conclusions in the fourth quarter of this year.

Volatility Index-related Products
HKEx is working with index companies to develop a volatility index for its securities market based on stock index options prices with a view to provide a benchmark of volatility for the marketplace.

The project is proceeding but is in an early stage.  HKEx will advise the market of key developments in due course. 

Narrower Strike Intervals for Options on Low-priced Stocks
Not included in this issue.

HKEx plans to narrow strike intervals of stock options under Strike Interval Group B and add a third quarterly expiry month for the 20 most actively traded option classes and Tracker Fund options before year's end, pending regulatory approval.

9. 

Provision of Free Real-time Last Trade Prices on Websites 

The free real-time market data to be available through the designated websites now includes nominal prices in addition to last trade prices. Key service terms have been finalised for the most part with the six short-listed candidates (three from the Hong Kong market, three from the Mainland market). HKEx expects the new service to be soft-launched in the fourth quarter of this year. The official launch is likely to be on 1 January next year.

The Free Prices Website Service was soft-launched on 5 October this year on six designated websites.  The official launch is set for 1 January next year. 

10.

T+2 Finality for Stock Exchange Trades and Settlement Instructions

HKEx is seeking informal feedback from certain banks and clearing house Participants on the proposed T+2 Finality model and plans to consult the market by end of the third quarter this year.

HKEx has completed the soft consultation on the proposed model and plans to issue a consultation paper in the fourth quarter of this year. 

11.

Admission of Share Registrars as CCASS Participants

The SFC has started talks with HKEx and the Federation of Share Registrars ( FSR ) on a model for a scripless securities market and aims to consult the market in the fourth quarter this year. Admission of share registrars as CCASS Participants will only be considered in the context of a scripless market.

The Scripless Securities Market Working Group, led by the SFC with HKEx and the FSR participating, is working on a proposed scripless model for a market consultation tentatively set for the fourth quarter this year.

12.

Automation of Stamp Duty Reporting and Payment

HKEx aims to introduce electronic stamp duty reporting and payment in the first half of next year, subject to market readiness and rule amendments.  

In progress according to plan.

13.  

AMS /3 Technical Revamp

Not included in this issue.

HKEx aims to double AMS /3's capacity from 1,500 to 3,000 orders per second and to increase the stock page update rate from 500 to 700 stock pages per second through the revamp to accommodate further growth and new business in its securities market.

Implementation is scheduled for the first quarter of next year, subject to successful completion of market rehearsals and the readiness of Exchange Participants and information vendor systems.