appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Enoch Yiu

Hong Kong will roll out a fully digital, paperless stock market from November 16, a move aimed at boosting efficiency and strengthening the city’s competitiveness, the market regulator said on Monday.
About 2,600 listed companies will transition to the new system in phases over five years after the launch, while firms going public after November 16 would no longer issue physical share certificates, according to the Securities and Futures Commission (SFC).
Investors will still be able to retain their existing paper certificates or opt to convert them into digital records.
Eliminating paper-based and manual processes was expected to improve efficiency for market participants, enable more straight-through processing and support greener operations, in line with global trends, the regulator said.
Plans to digitalise Hong Kong’s stock market were first proposed more than two decades ago. The SFC issued its initial consultation paper in 2002, with progress slowed by a lengthy legal process.
The paperless framework – formally known as the uncertificated securities market regime – is now ready for implementation following system development and testing by bourse operator Hong Kong Exchanges and Clearing (HKEX) and the Federation of Share Registrars Limited (FSR).
Stockbrokers and other market participants would be invited to take part in further testing in the coming months, while detailed rule changes would be published shortly, the SFC said.
A commencement notice will be tabled in the Legislative Council in the second quarter, alongside market briefings to help participants understand the new regime.

“Implementation of the uncertificated securities market regime will further elevate our financial market infrastructure through greater investor choice, more streamlined processes and more opportunities for straight-through processing,” said Rico Leung, the SFC’s executive director of supervision of markets.
“We now have a clear timeline for implementing this important initiative. In the coming months and beyond, we will continue to work with HKEX and the FSR to ensure a smooth launch, and step up efforts to enhance public awareness and understanding of the new regime,” he said.
The existing nominee structure under the Central Clearing and Settlement System would remain in place after the transition, the commission added.
“A paperless market is a predecessor for many other market reforms such as changes to board lot sizes, shortening the settlement cycle to T+1, as well as extending trading hours,” said Kenny Shiu Chi-wai, vice-president of Our Hong Kong Foundation and executive director of Public Policy Institute.
He added that physical share certificates could not be directly integrated with blockchain technology, whereas a scripless system would reduce manual processes and pave the way for tokenisation.
“A majority of major stock markets worldwide, including those in mainland China, the US, the UK and Singapore, have adopted paperless systems,” he said. “The scripless reform in Hong Kong will bring the city in line with international practices and benefit both local and global investors.”
Richard Houng, chairman of FSR said the share registrar industry widely supports the new regime.
“Uncertificated securities allow investors to own shares in their names and transfer shares electronically, shortening transaction times while strengthening corporate governance,” Houng said. “This will significantly enhance operational efficiency for market participants and further bolster Hong Kong’s financial infrastructure, reinforcing the city’s position as an international financial centre.”


How Hong Kong’s new 5-year plan courts global capital with an eye on market dominance

Hong Kong to support rocket, satellite IPOs as SpaceX-led sector takes off

14 key takeaways from John Lee’s policy address, Hong Kong’s first 5-year plan

Tighter scrutiny of Hong Kong IPOs could slow deal flow, analysts say

HKEX

Hong Kong turns the page on paper shares as digital shift kicks off in November

End of an era: the SFC says firms issuing shares after November 16 will no longer issue physical share certificates. Photo: SCMP

Plans to digitalise Hong Kong’s stock market were first proposed more than two decades ago. Photo: Jelly Tse

Hong Kong holds No 3 ranking as global capital hub amid market volatility

Hong Kong maintained a leading position globally across key industry sectors, including banking, insurance and financial services. Photo Jelly Tse

Amid ongoing Middle East tensions, Hong Kong is emerging as a safe haven. Photo: Elson Li

HKEX opens door for diverse innovative firms to list, expand confidential filings, with biggest reforms since 2018

HKEX has carried out many reforms to make it easier for companies to list in Hong Kong. Photo: Reuters

Katherine Ng, right, seen with Kelly Lee, senior vice-president of HKEX, says some companies have expressed interest in listing in Hong Kong “but consider our threshold to be too high”. Photo: Handout

Why HKEX’s board lot reform could pose challenges for HSBC and others

HKEX allows listed companies to determine their own lot size, resulting in about 2,700 listed companies having 44 different lot sizes. Photo: Sun Yeung

HSBC shares trade in lots of 400 shares on the Hong Kong stock exchange. Photo: EPA-EFE

Why China’s path to ‘financial superpower’ status could begin in Hong Kong

Illustration: Lau Ka-kuen

Haoxin Mu, economist for sectoral research in Asia at Natixis Corporate and Investment Banking. Photo: Sun Yeung

Veteran banker Wilson Chan Fung-cheung is now associate director of MBA outreach at City University in Hong Kong. Photo: Handout

People enjoy the Victoria Harbour waterfront in Tsim Sha Tsui on January 24, 2024. Photo: Sam Tsang

Business

Some 2,600 Hong Kong-listed firms will go paperless in stages over five years, with new listings issuing no physical certificates


Some 2,600 Hong Kong-listed firms will go paperless in stages over five years, with new listings issuing no physical certificates.


China

Hong Kong

Our Hong Kong Foundation

Hong Kong turns the page on paper shares as digital shift kicks off in November

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Some 2,600 Hong Kong-listed firms will go paperless in stages over five years, with new listings issuing no physical certificates

Some 2,600 Hong Kong-listed firms will go paperless in stages over five years, with new listings issuing no physical certificates