Hong Kong Securities And Futures Commission On Track To Launch Uncertificated Securities Market Regime In Early 2026

The Securities and Futures Commission (SFC) welcomes the enactment of all necessary legislation to pave the way for the implementation of the uncertificated securities market initiative (USM) in early 2026 subject to market readiness (Note 1).

During the SFC’s recent consultations and engagement, a broad array of market participants have shown support and enthusiasm for this initiative, which will further increase efficiency in our securities market and also provide investors with better protection and trading convenience.

To help the market better understand and prepare for this new initiative, the SFC also launched a dedicated USM webpage today to provide one-stop access to all useful information. The webpage includes a set of frequently asked questions to help listed issuers and investors better understand their rights and obligations under USM.

Among the key changes under USM:

Newly listed securities will have to be in paperless form from the time of listing, meaning investors will no longer be able to hold these securities in paper form.
For existing securities, investors may continue to hold their paper certificates, which will not be invalidated. Meanwhile, specific deadlines will be set for each issuer to take steps to enable investors to hold and transfer the securities in their own names without paper (Note 2). Thereafter, issuers will no longer be able to issue new paper certificates.

The SFC is working with Hong Kong Exchanges and Clearing Limited (HKEX) and the Federation of Share Registrars Limited (Federation of Share Registrars) on a detailed five-year implementation timetable which will cover issuers from Hong Kong, Mainland China, Bermuda and Cayman Islands.

“Issuers are encouraged to reach out to their share registrars to discuss the possible timing of their participation,” said Mr Rico Leung, the SFC’s Executive Director of Supervision of Markets. “We urge market participants to start making preparation for the implementation of USM.”

In the coming months, the SFC will increase engagement efforts together with HKEX and the Federation of Share Registrars, to help stakeholders understand how the new regime operates, its benefits and impact, as well as next steps for their participation.

Notes:

All USM-related primary law amendments had been enacted by end-2024, and the Legislative Council also completed its negative vetting process for all USM-related subsidiary legislation this week. All legislation has yet to come into effect. The specific implementation date of USM will be announced in due course.
A five-year timetable will be set, with specific deadlines for each issuer, to facilitate more than 2,500 existing issuers’ gradual participation in USM.