- Hong Kong’s securities and derivatives markets, including Stock Connect, derivatives holiday trading, and after-hours trading, will be open during severe weather conditions
- Brokerage and banking services should be provided through electronic channels during severe weather conditions to ensure safety
- Severe Weather Trading will take effect from 23 September 2024, with certain special arrangements to be offered to Participants requiring assistance, until the end of 2024
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce the finalisation of the operational model and arrangements to allow Hong Kong's securities and derivatives markets to remain open during severe weather conditions. HKEX plans to implement Severe Weather Trading (SWT) from 23 September 2024, subject to regulatory approval.
HKEX is today (Tuesday) publishing the conclusions from a consultation paper on the Proposal on Severe Weather Trading of Hong Kong Securities and Derivatives Markets. The consultation exercise received 133 responses from a wide range of market participants that showed strong support on the implementation of SWT in Hong Kong.
HKEX will proceed with the proposals to maintain trading, post-trade and listing arrangements in its securities and derivatives markets, including Stock Connect, derivatives holiday trading, and after-hours trading, during a severe weather event1.
To ensure safety, remote working and the use of online services are strongly encouraged on a SWT day, and no public-facing physical outlets will provide services. Some minor adjustments will be made to ensure the market’s operational resilience, as certain services provided only via physical outlets will be unavailable.
HKEX Chief Executive Officer, Bonnie Y Chan, said: “Hong Kong’s markets will remain open and operational during severe weather conditions. This is an important step that will make Hong Kong's markets always available to regional and international investors during trading hours, whatever the weather, and underscores HKEX’s commitment to supporting the resilience and competitiveness of Hong Kong as a world-class financial centre.”
"Personnel safety remains a key priority: remote working capabilities and online banking and trading services will allow our markets to operate robustly and resiliently during severe weather conditions. HKEX would like to thank the HKSAR Government, financial regulators, market participants and other stakeholders for their staunch support and valuable feedback to help us deliver this crucial market enhancement. We look forward to continue working closely with our entire stakeholder community to facilitate safe, secure and reliable market operations during severe weather events,” added Ms Chan.
The Hong Kong Association of Banks and the Hong Kong Interbank Clearing Limited have confirmed that, during severe weather conditions, banking services, such as electronic money transfer channels, will be available from designated banks and settlement banks of relevant clearing houses of HKEX, to fully support Clearing Participants’ operations and money settlement requirements.
To allow small-and-medium-sized brokers adequate preparation time, HKEX plans to offer special arrangements to eligible participants requiring assistance, for example by temporarily fulfilling margin payment or settlement obligations for these participants on a SWT day. These participants will be subject to trading restrictions on the SWT Day and will need to complete their unfulfilled obligations after the severe weather signals are lowered. The above special arrangements will be in place from the SWT effective date until the end of 2024. More information and application details of this programme will be announced in due course. HKEX will continue to provide necessary support and follow-up for participants to ensure their readiness following the conclusion of this special arrangement period.
HKEX's trading, clearing, settlement and market data systems will be fully accessible via remote networks during severe weather conditions. HKEX has made enhancements to its infrastructure and operational arrangements to reduce the need for physical access among participants, and will arrange testing sessions before the launch of SWT to ensure readiness of market participants and other relevant industry stakeholders. Investors are also advised to consult their brokers and banks about the availability of services during SWT.
In consultation with the HKSAR Government, HKEX has recommended best practices on severe weather work arrangements for employers and their employees. Certain clarifications have also been made in the conclusions paper in relation to market operations such as listing, trading, clearing and settlement arrangements during a SWT day.
HKEX, along with the Securities and Futures Commission and the Hong Kong Monetary Authority, and with the support of the HKSAR Government, formed a Severe Weather Trading Task Force (Task Force) in 2023 to seek industry views on trading under severe weather conditions and to engage in discussions beyond trading arrangements. The Task Force consisted of a broad group of stakeholders, including financial institutions and market participants, who provided vital input to the development of the SWT operational model.
Consultation Conclusions and respondents’ feedback are available on the HKEX website.
Note:
- Before the implementation of SWT, an issuance of Typhoon Signal No.8 or above, or a Black Rainstorm Warning by the Hong Kong Observatory, or an announcement of "Extreme Conditions" by the HKSAR Government, could lead to delayed market opening or suspension of trading, clearing and settlement services.
