- Significant progress in current Strategic Plan and strong market performance, thanks to groundwork in previous years
- Strive to fill "gaps" in products and services, with FIC and international focus, in next few years
- 2018 focus: reform listing regime, launch new trading systems in securities and derivatives markets, strengthen risk management, explore market structure enhancements
Hong Kong Exchanges and Clearing Limited (HKEX) plans to implement Hong Kong’s biggest listing regime reform in 25 years to provide issuers and investors with a wider range of choices, enhance its market infrastructure with major trading system changes, and work to bolster its risk management at lower overall costs to the market, said Chief Executive Charles Li as he highlighted key plans for this year at HKEX’s annual media luncheon.
These initiatives will build on the significant progress already in HKEX’s Strategic Plan 2016-2018, helping further boost competitiveness at a time of vast opportunity in the new global economy.
“The goals of our strategic plan are to make our IPO market more relevant, our equity market more connected, and our derivatives market more competitive,” said Mr Li.
On the IPO front, a major breakthrough was made when the market reached a clear consensus on broadening HKEX’s listing regime, paving the way for more companies from innovative sectors to list on the Main Board, as well as revised requirements for secondary listings.
“Completing the listing reform is one of our top priorities, in order to secure our relevance as a premier global capital formation centre,” Mr Li said. “We have already received some enquiries about listing under the new regime, and we plan to consult the market on proposed rule changes before the end of this quarter.”
Meanwhile, on the push to make the equity market more connected and the derivatives market more competitive, efforts so far have included the launch of:
- Shenzhen-Hong Kong Stock Connect in December 2016 and a series of enhancements to the Stock Connect scheme;
- Bond Connect in July 2017;
- Various products, including Renminbi Options (USD-CNH* Options), Gold Futures and Iron Ore Futures;
- Enhancements to stock option position limit regime; and
- Extension of after-hours derivatives trading hours
To seize the immense opportunities that lie ahead, HKEX will continue to strengthen its market structure by:
- Launching the Orion Trading Platform for securities in the first quarter;
- Inclusion of equity index option contracts to after-hours derivatives trading in the second quarter;
- Introducing an investor identification regime for Northbound trading under Stock Connect in the third quarter;
- Upgrading the trading and clearing systems for derivatives in the fourth quarter; and
- Working with the regulator and market participants on the implementation of a new margining model that will deliver stronger protection and lower costs to the market
HKEX will continue to improve its current Connect programmes by adding more products such as Exchange Traded Funds and seek to further develop mutual market access. It will also explore A-share derivatives and other measures to strengthen its derivatives market’s competitiveness. All these are subject to discussions with regulators and their approval.
“We had a fantastic 2017, but many of the accomplishments were the result of our hard work a few years ago,” said Mr Li. “As we reap the rewards from our earlier efforts, we have to plant for future harvests.”
As global financial markets grow increasingly competitive, HKEX needs to bridge the remaining gaps in its products and services, Mr Li noted. “We will strive to fill those gaps through our next strategic plan, which will include initiatives to reinforce Hong Kong’s position as the wealth management centre for Mainland Chinese and the offshore hub for Renminbi internationalisation,” he said.
“Our efforts and persistence over the last few years have prepared us to make the most of the compelling opportunities ahead, and we are confident that we can continue to build on our unique leadership position in connecting Chinese and international markets,” Mr Li added.
* Offshore Renminbi