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Overview
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| As a self-regulatory market body, the Hong Kong Exchanges and Clearing Limited (HKEx) is
supervised by the Securities and Futures Commission (SFC). While the
HKEx plays the role of maintaining a fair, transparent and efficient
marketplace for capital raising, the SFC has the ultimate responsibility
of striking a balance between investor interest and market viability. |
|
|
| The Markets |
| Hong Kong has
a main board and a secondary board. Stocks, options, warrants, notes,
bonds and unit trusts are the products traded principally on the main
board. |
The Main Board
Over 850 companies with issued capital of over HK$400 billion are listed
on Hong Kong's main board. |
| The Hang Seng Index, which tracks the performance
of 38 blue chips, is Hong Kong's market barometer. Sub-indices are
available to measure industry or sector performance. |
The Growth Enterprise
The Growth Enterprise Market (GEM) was
launched to cater to younger businesses with growth potential. 193 companies are listed
on GEM. |
| |
| Trading Mechanism |
Order Matching
Except for the NASDAQ Pilot Program that trades seven US stocks, Hong
Kong's trading system is order-driven system.
Orders are executed through the Automatic Order Matching and
Execution System (AMS) on the strict basis of price and time priority.
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| AMS supports only limit orders at 20 price
spreads above or below the nominal (market) prices. It accepts a maximum
order size of 3,000 board lots. Each trading terminal accommodates up
to 2,000 in outstanding orders while each order queue carries as many
as 2,000 orders. |
Quotation Rules
Where there has been no first ask of the day, the first bid order must be higher than or equal to 4 spreads below the previous closing price. |
| Where there has been no first bid of the day, the first ask order must be lower than or equal to 4 spreads above the previous close. |
| Any first order must not deviate 9 times
or more from the previous closing price. The same goes
for quotations other than the opening quotes. |
|
Spread
|
| For all securities which the exchange has authorised to trade in accordance with the scale of spreads as follows: |
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Price From (HK$)
|
Spread (HK$)
|
|
0.01
|
0.001
|
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0.25
|
0.005
|
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0.50
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0.010
|
|
10.00
|
0.020
|
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20.00
|
0.050
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|
100.00
|
0.100
|
|
200.00
|
0.200
|
|
500.00
|
0.500
|
|
1,000.00
|
1.000
|
|
2,000.00
|
2.000
|
|
5,000.00 to 9,995.00
|
5.000
|
|
For debt securities:
|
|
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0.50 - 9,999.875
|
0.125
|
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Exchange Fund Notes and HKMC Notes:
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|
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0.50 - 9,999.95
|
0.050
|
|
Investor Protection |
| Investors are protected by the Unified Exchange
Compensation Fund (UECF). Under the Hong Kong Securities Ordinance,
a pool of monies is set aside to compensate investors who suffer losses
due to default by a broker member of the Stock Exchange of Hong Kong
Limited. Exchange members are required to contribute to the fund by
depositing HK$50,000 for each trading right. |
| The UECF is administered by the Securities
Compensation Fund Committee, a statutory body made up of representatives
of both the exchange and the Securities and Futures Commission. |
| Compensation payments are limited to HK$8 million
per broker default. If the assessed claims exceed this amount, the
maximum allowance will be divided on a pro rata basis among the successful
claimants. |
| Investors are entitled to make claims only
against defaulting brokers who are members of the exchange. Those
who deal through banks, which are "exempt dealers", will have to file
claims with the Hong Kong Monetary Authority. |
