Hong Kong to revise settlement and servicing model
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Hong Kong to revise settlement and servicing model 28 January 2019Hong Kong Reporter: Jenna Lomax
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The Securities and Futures Commission (SFC), Hong Kong Exchanges and Clearing (HKEX) and the Federation of Share Registrars (FSR) have issued a consultation paper proposing a revised operational model for implementing an uncertificated securities market in Hong Kong.
According to HKEX, in an uncertificated, or paperless, securities market, investors could hold and transfer securities in their own name without share certificates or other paper documents.
The digitisation of securities holdings and elimination of manual processes would enhance post-trade settlement and servicing, said the exchange, making Hong Kong markets more efficient and globally competitive.
The costs of new systems to support the revised model will largely be covered by HKEX and share registrars. The consultation period will last for three months.
HKEX said: “The proposed model strikes a balance between preserving existing efficiencies in the clearing and settlement process and providing options for investors to hold securities in uncertificated form. Implementation would be conducted in phases.”
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