HKEx To Start Closing Auction Session On 26 May 2008

Hong Kong Exchanges and Clearing Limited (HKEx) announced today (Wednesday) a closing auction session for its securities market will commence on 26 May 2008. The target date takes into consideration system preparations by Exchange Participants and the scheduled introduction of five-digit stock codes in April 2008.

The results of a public consultation conducted by HKEx earlier this year indicated broad market support for the introduction of a closing auction session. Based on the results, which were included in the Consultation Conclusions published in July this year, HKEx announced the closing auction session would be introduced subject to formal approval of necessary rule amendments by the Securities and Futures Commission. Such approval was recently granted.

After implementation of the closing auction session, the closing prices of securities will be determined by an auction mechanism, similar to that currently adopted in the Pre-opening Session. The implementation model for the closing auction session has been set out in Part C of the Consultation Conclusions.

"Closing auction is an international practice which aims at providing a fair and market-driven method of closing a trading session and determining closing prices. Our auction mechanism is based on market consultation and would address the need of various market participants," said HKEx Head of Cash Market Eric Yip. "HKEx is committed to continuously enhancing its trading infrastructure based on market demand."

The effective trading hours of the securities and derivatives markets will be extended correspondingly with the implementation of the closing auction session. Certain trading arrangements upon the approach of a typhoon will also be modified. Details are shown in the following tables.

Table 1 - Closing Time of the Securities Market

Normal Day Trading		Half-Day Trading (eg Christmas Eve)
Existing	After Implementation of Closing Auction Session	Existing	After Implementation of Closing Auction Session
4:00 p.m.	4:10 p.m.	12:30 p.m.	12:40 p.m.

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

	Normal Day Trading		Half-Day Trading (eg Christmas Eve)
Market	Existing	After Implementation of Closing Auction Session	Existing	After Implementation of Closing Auction Session
Stock Index Futures/ Options	4:15 p.m.	4:30 p.m.	12:30 p.m.	1:00 p.m.
Stock Futures/ Options	4:00 p.m.	4:00 p.m. (unchanged)	12:30 p.m.	12:30 p.m. (unchanged)

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

Market	Existing	After Implementation of Closing Auction Session
Stock Index Futures/Options	4:00 p.m.	4:00 p.m. (unchanged)
Stock Futures/Options	4:00 p.m.	4:00 p.m. (unchanged)

Table 4 - Trading arrangement for the Securities Market upon the approach of a typhoon, effective 26 May 2008

Normal Day Trading		Half-Day Trading (eg Christmas Eve)
Typhoon Signal No. 8 or above hoisted before 3:45 p.m. during Afternoon Session-		Typhoon Signal No. 8 or above hoisted before 12:15 p.m. during Morning Session-
- -	Trading will be terminated 15 minutes after hoisting of Typhoon Signal No. 8 or above No trading for the rest of the day	- -	Trading will be terminated 15 minutes after hoisting of Typhoon Signal No. 8 or above No trading for the rest of the day
Typhoon Signal No. 8 or above hoisted at or after 3:45 p.m. during Afternoon Session or Closing Auction Session-		Typhoon Signal No. 8 or above hoisted at or after 12:15 p.m. during Morning Session or Closing Auction Session-
-	Trading will continue until end of Closing Auction Session	-	Trading will continue until end of Closing Auction Session

Table 5 - Trading arrangement for Stock Index Futures And Options (SIFO) Contracts, HIBOR Futures Contracts and Exchange Fund Notes (EFN) Futures Contracts upon the approach of a typhoon, effective 26 May 2008

Market	Normal Day Trading		Half-Day Trading (eg Christmas Eve)
SIFO	Typhoon Signal No. 8 or above hoisted during Morning Session or Afternoon Session-		Typhoon Signal No. 8 or above hoisted during Morning Session-
	-	Before 3:45 p.m. , trading will be terminated after 15 minutes	-	Before 12:15 p.m. , trading will be terminated after 15 minutes
	-	At or after 3:45 p.m. but before 4:00 p.m. , trading will be terminated at 4:15 p.m.	-	At or after 12:15 p.m. but before 12:30 p.m. , trading will be terminated at 12:45 p.m.
	-	At or after 4:00 p.m. , trading will be terminated after 15 minutes	-	At or after 12:30 p.m. , trading will be terminated after 15 minutes
HIBOR Futures and EFN Futures	Typhoon Signal No. 8 or above hoisted during Morning Session or Afternoon Session-		Typhoon Signal No. 8 or above hoisted during Morning Session-
	-	Before 3:45 p.m. , trading will be terminated after 15 minutes	-		Trading will be terminated after 15 minutes (unchanged*)
	-	At or after 3:45 p.m. but before 4:00 p.m. , trading will be terminated at 4:15 p.m.
	-	At or after 4:00 p.m. , trading will be terminated after 15 minutes

* No change to HIBOR and EFN futures markets as their morning sessions close at 12:00 p.m.