Hong Kong Exchanges and Clearing Limited (HKEx) and the London Stock Exchange are working together to make it easier for companies to list in both Hong Kong and the United Kingdom. In addition, the exchanges plan to introduce the trading of HKEx stocks on the Exchange’s SETS trading system and Exchange stocks on Hong Kong’s trading system AMS/3.
Discussions on these projects started earlier this year. Both exchanges will now meet with their market participants to seek their views on the proposed trading arrangements.
A listing facilitation programme is being developed to enable companies listed on one exchange to list on the other through a streamlined process. The programme is designed to attract companies seeking greater access to the capital markets in Europe and Asia.
The trading collaboration will aim to provide HKEx and Exchange customers with the opportunity to trade liquid securities from both markets on local electronic systems in local trading hours. Securities transactions would be cleared in the local market and settled in the securities settlement system in either Hong Kong or the United Kingdom.
The exchanges will now begin discussions with market participants on the optimal terms for the proposed trading collaboration and potential market demand. If a sufficiently attractive business case can be developed, the exchanges would seek to introduce the trading collaboration in 2003. These proposals will be subject to regulatory approval.
Clara Furse, the Exchange’s Chief Executive, said, “Both exchanges have a global outlook and strong liquid markets. Both play a leading role in their regions. So it is natural for us to explore ways to extend our reach across time zones. I believe by pooling the strengths of Hong Kong and London, investors and issuers will find the two marketplaces an essential part of their global financial map.”
K C Kwong, Chief Executive of the HKEx, described the business relationship with the Exchange as an important step in HKEx’s strategic plan to become the Asian hub of the global financial markets. He said, “This collaboration will be beneficial to both exchanges, our market participants and shareholders. It will broaden our customer base, diversify our product range and provide additional value-added services to customers across a broader geographical area. Ultimately, these proposals will contribute to the long-term business growth of both marketplaces.”