Christine Wong

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					ExchangE
www.hkex.com.hk   |   JAN 2011




                                                    Head of Legal Services
                                                        and Chief Counsel

                                         Christine Wong
                                               Discusses Challenges and
                                               Opportunities of Her Team

HKEx Leads World Again           Trading Hours to be      Hosting Services at Next
in IPO Funds Raised              Extended in Two Phases   Generation Data Centre
Contents                                         ExchangE
                                                 January 2011



    1   Chief Executive’s Message

    2   HKEx Leads World Again in IPO Funds Raised

    3   HKEx Sees Growth in Listings of International Issuers
        – HKEx Strengthens Investor Awareness of Overseas Listings

    6   Trading Hours to be Extended in Two Phases

    8   Hosting Services to be Offered at Next Generation Data Centre

    9   Upgrades to AMS/3.8 and MDS/3.8 Proceed on Schedule

   10   PRS Plus – A New, Faster Derivatives Market Datafeed – to be
        Launched in Second Quarter

   11   Free Prices Website Service to be Expanded and Repackaged as
        Basic Market Prices Service

   12   New Single Licence Regime Helps HKEx and its Information Vendors

   13   Successful Rollout of Dividend Futures

   15   HKEx and the SFC Seek to Raise Investors’ Awareness of
        Synthetic ETFs
        – What Are Synthetic ETFs?

   16   Update on SPRINTS, the Structured Products Integrated
        Transaction System

   17   HKEx Announces Way Forward on Listing-related Proposals

   19   Consultations Seek Views on Proposals Regarding Listing Matters

   22   Chatroom:
        Head of Legal Services and Chief Counsel Christine Wong
        Discusses Challenges and Opportunities of Her Team

   26   Retail Online Trading for Derivatives Continues to Grow

   34   News Briefs:
        • CSRC Chairman’s Visit to HKEx
        • HKEx’s Results for January – September 2010
        • Awards for HKEx and its 2009 Annual Report
        • Overseas Visits Promote Listing in Hong Kong
        • Asian Financial Forum 2011
        • Newly Listed Companies

   37   Listing Decisions

   39   Compliance Decisions

   44   HKEx Market Surveillance Highlights

   45   Status Report on New Product and Market Development Initiatives
  Chief Executive’s Message

                                                                                  “
Happy New Year!
                                                                                  We hope you enjoy this
We have just completed an incredibly successful 2010, which included              edition of our newsletter.
breaking many of our previous fund raising records and marking a number           Comments and suggestions
of important milestones.                                                          from Exchange readers are
                                                                                  always welcome. They can




                                                                                                        ”
For the second year in a row, our securities market finished first in the world   be emailed to us at:
in terms of IPO funds raised. Last year, $445 billion was raised through 113           info@hkex.com.hk
new listings, a 79 per cent increase from 2009, including AIA, the largest
IPO ever for HKEx, and Agricultural Bank of China, the largest China IPO
for HKEx. We also witnessed increased interest in listing in Hong Kong
from overseas companies, notably Russia’s RUSAL, Canada’s SouthGobi,
France’s L’Occitane and Mongolia’s Mongolian Mining, not to mention
Brazil’s Vale, our first depositary receipts (HDRs) issuer.

In this issue of Exchange, we will take a closer look at the introduction of
HDRs, the first of which debuted on our market in December. We will also
get a progress report on the coming introduction of extended trading hours,
which will be implemented in two phases beginning in March this year.
A number of consultation papers have also been published lately, namely
on ex-entitlement trading and shareholder approval, debt securities, and
proposed changes to property valuation requirements. Background on all            Charles Li
three topics is included in these pages.                                          Chief Executive


A number of other initiatives are also underway for 2011. Among them is
the new Next Generation Data Centre (NGDC), which is being constructed
in Tseung Kwan O. HKEx will offer co-location and hosting services at the
state-of-the-art NGDC, and we have an article detailing these plans in
this issue.

We have also published stories updating our progress on implementing
the AMS3.8/MDS3.8 system upgrades, as well as our successful rollout of
dividend futures and expansion of the Basic Market Prices Service.

Last but not least, in the Chat Room we meet Christine Wong, who has
brought with her over 20 years of experience in the legal and regulatory
field to HKEx as our Head of Legal Services and Chief Counsel. Christine
has some interesting insights to share about the nature of her work at
HKEx and how she and her team can help us move confidently forward.

It is my pleasure to begin a brand new year with you, and I am confident
we can push the bar even higher this year and cement Hong Kong’s –
and HKEx’s – place as one of the world’s premier financial centres. I wish
everyone a peaceful, happy, healthy and prosperous 2011 and Year of the
Rabbit.




1   Exchange • January 2011
      HKEx Leads World Again
      in IPO Funds Raised

HKEx’s securities market led the world for the second consecutive year in funds raised through initial public
offerings (IPOs), as issuers raised a total of $445.0 billion in Hong Kong IPOs. In addition, there were several
records in both the securities market and the derivatives market.

In the securities market, total equity fund-raising rose to an all-time high of $850.1 billion, led by Hong Kong’s
single largest IPO ever. Turnover of Exchange Traded Funds, or ETFs, also reached a record high.

In the derivatives market, turnover of Mini H-shares Index futures and Hang Seng Index (HSI) options was the
highest ever. There were also other turnover records and some products had their highest open interest ever.

    New Records in 2010
    Securities Market                                         Up to 31 December 2010                Pre-2010 Record
    Total equity funds raised                                       $850.1 bil ^                 $642.1 bil (Year 2009)
        • IPO funds raised                                          $445.0 bil ^                 $333.9 bil (Year 2006)
        • Post IPO funds raised                                     $405.1 bil ^                 $393.9 bil (Year 2009)
    Funds raised by Mainland enterprises
      (IPO + Post IPO)                                              $466.0 bil ^                 $384.9 bil (Year 2006)
    Single largest IPO                                              $159.1 bil                   $124.9 bil (Year 2006)
    Total number of shares traded                                34,991.2 bil                  27,104.3 bil (Year 2008)
    Total number of deals                                            193.9 mil                    177.6 mil (Year 2009)
    Number of newly listed derivative warrants                       7,826                           6,312 (Year 2007)
    Trading turnover of Exchange Traded Funds*                      $604.5 bil                   $499.7 bil (Year 2009)

    Derivatives Market                                        Up to 31 December 2010                Pre-2010 Record
                                                                     (Contracts)                       (Contracts)
    Trading Turnover
    Total Futures and Options                                          116,054,377             105,006,736 (Year 2008)
    Total Options                                                       73,047,854              60,284,993 (Year 2008)
Mini H-shares Index Futures                                                 992,224                799,894 (Year 2009)
Hang Seng Index Options                                                   8,515,049              7,480,183 (Year 2007)
Mini-Hang Seng Index Options                                                482,691                286,591 (Year 2009)
H-shares Index Options                                                    2,910,713              1,961,131 (Year 2009)
Stock Options                                                           61,125,647              54,692,865 (Year 2008)
Open Interest
H-shares Index Futures                                            162,527 (27 Oct 2010)            156,841 (26 Mar 2008)
Mini H-shares Index Futures                                          2,728 (28 Dec 2010)             1,969 (29 Apr 2009)
Hang Seng Index Options                                           477,129 (29 Dec 2010)            476,682 (29 Aug 2007)
Mini Hang Seng Index Options                                        15,016 (27 Oct 2010)             9,893 (26 Jun 2009)
Stock Options                                                   8,825,259 (26 Nov 2010)          8,302,290 (28 Nov 2007)

*    Turnover value in non-HKD Exchange Traded Funds was included starting 29 November 2010.
^ Provisional figures



    2    Exchange • January 2011
   HKEx Sees Growth in Listings of
   International Issuers




Hong Kong’s Secretary for Financial Services      Listings of international issuers have become a new driver of growth for
and the Treasury, KC Chan (sixth from left),
joins HKEx Chief Executive Charles Li (third      HKEx in 2010, as Hong Kong continued to attract quality issuers from
from left) and others for a photo during Vale’s   overseas.
listing ceremony.

                                                  This also comes as HKEx increased the number of jurisdictions it considers
                                                  acceptable for an issuer’s incorporation (see table below). Recently, the
                                                  Listing Committee approved the US State of California, Brazil, the Isle
                                                  of Man, Japan and Italy as recognised jurisdictions, bringing the total
                                                  number of recognised overseas jurisdictions to 15. This is in addition to the
                                                  four stipulated in the Listing Rules, namely Hong Kong, Mainland China,
                                                  Bermuda and the Cayman Islands.

                                                  HKEx is glad to have seen a number of overseas companies choosing to
                                                  list in Hong Kong last year. At the start of 2010, United Company RUSAL
                                                  from Russia listed on HKEx, raising $17.39 billion through Hong Kong’s third
                                                  largest IPO of the year. RUSAL is also the first Russian company to list in
                                                  Hong Kong, and its IPO was followed by the Hong Kong listings of other
                                                  international issuers including Canada’s SouthGobi, France’s L’Occitane
                                                  which is incorporated in Luxembourg, the UK’s Prudential and others.

                                                  There has been keen interest from natural resource companies, as HKEx’s
                                                  new Listing Rules for mineral companies became effective on 3 June
                                                  2010. The new rules, which have been welcomed by market and industry
                                                  practitioners, provide clear guidelines for mineral companies and listed
                                                  companies participating in the natural resources industry on information
                                                  that must be provided to investors and shareholders.




3     Exchange • January 2011
HKEx Sees Growth in Listings of International Issuers


                              Among the natural resources companies listed in Hong Kong in 2010,
                              Mongolian Mining Corporation, which is incorporated in the Cayman
                              Islands, raised $5.81 billion through its IPO in October, making it the tenth
                              largest IPO of the year. Mongolian Mining is also the first company from
                              Mongolia to list in Hong Kong.

                              In December, Vale SA, a Brazilian metals and mining company, became the
                              first company from the country to list in Hong Kong and the first company
                              to list in the form of depository receipts (HDRs). Vale SA, which is listed
                              on the stock exchange in Brazil’s Sao Paulo BM&FBOVESPA, debuted on
                              HKEx’s stock exchange on 8 December, making it the fourth secondary
                              listing on HKEx.

                              As more companies with overseas listings list in Hong Kong as well, dual
                              listing has become more common: More than 10 companies newly listed
                              in Hong Kong last year are dually listed on overseas exchanges outside
                              China. They include Z-Obee, Sound Global, Midas, China New Town
                              Development and Novo in addition to RUSAL, SouthGobi, Prudential and
                              Vale SA. Furthermore, there were also companies that delisted their shares
                              from other exchanges, such as Man Wah, West China Cement, China
                              Medical Systems and Sihuan Pharmaceutical, and chose to list them in
                              Hong Kong.

                              HKEx will continue to welcome issuers from overseas that have high
                              standards of investor protection in line with those of Hong Kong and will
                              continue to promote the benefits of listing in Hong Kong to potential listing
                              applicants outside of the territory.

                              HKEx’s Acceptable Places of Incorporation for Listing Applicants
                              Australia                        Isle of Man
                              Bermuda                          Italy
                              Brazil                           Japan
                              British Virgin Islands           Jersey
                              Canada – British Columbia        Luxembourg
                              Canada – Ontario                 Mainland China
                              Cayman Islands                   Singapore
                              Cyprus                           United Kingdom
                              Germany                          United States of America – California
                              Hong Kong
                              Note: Jurisdictions in bold are prescribed for the purpose of eligibility for listing by the Listing Rules.




4   Exchange • January 2011
 HKEx Sees Growth in Listings of International Issuers


HKEx Strengthens Investor Awareness of Overseas Listings
HKEx believes one of the principles of investor protection lies in ensuring investors are aware and familiar with
the instruments they are investing in. In view of the increasing number of overseas listings, HKEx has laid out
certain measures to increase awareness among investors who are investing in overseas companies.

HKEx’s measures include:

1. With effect from 1 December 2010:
   – Stock short names for secondary listings must carry the suffix “S”; and
   – Stock short names for depository receipt listings must carry the suffix “DR”.

2. New facilities and materials are posted on the HKEx website to make it easy to search for information about
   listed companies from overseas and the features of investing in them. A guidance document was published
   on the HKEx website to provide a general guide to investors on some of the basic facts and characteristics of
   investing in securities of overseas issuers, which include the differences between primary and secondary
   listings, the risks relating to investing in overseas issuers, and the additional risks relating to investing in
   secondary listed issuers and HDR issuers.

3. Overseas companies are required to prominently disclose the risks associated with their jurisdiction of
   incorporation, operations located in foreign lands and other foreign affiliations in their listing document and
   corporate communications.

4. Listed companies with new secondary listings must announce the Listing Rule waivers they obtained, their
   constitutive documents and a summary of applicable laws and regulations, as well as any other information
   requested by the Exchange through the HKEx website upon their listing. This information should also be
   updated annually.




                                                               The DR in the stock short name highlighted in the information
                                                               above from the HKEx website indicates the company listed
                                                               through depository receipts.



5   Exchange • January 2011
  Trading Hours to be Extended
  in Two Phases



HKEx has received the         The first phase takes effect from 7 March this year, when trading in the
regulatory approval to        securities market will be from 9:30 am to 12 noon and then from 1:30
                              pm until 4:00 pm. Beginning on 5 March 2012, trading in the securities
extend the trading hours      market will be from 9:30 am to 12 noon and then from 1:00 pm until 4:00
of its securities and         pm. The new trading hours for stock futures and stock options will be
derivatives markets1 in       the same as those for securities, while trading of index futures and index
                              options will continue to begin 15 minutes before the securities market
two phases in order to
                              opens in the morning and end 15 minutes after the market closes at 4 pm.
give its Participants and     The securities market’s pre-opening session and the pre-market opening
other stakeholders time       periods 2 in the derivatives market will continue to begin 30 minutes before
to adjust to the revised      the corresponding trading sessions.

trading schedule.
                              Benefits
                              The extended trading hours will improve the price discovery process for
                              Mainland-related securities listed in Hong Kong by increasing the overlap
                              of HKEx’s trading hours with those of the Mainland exchanges. After the
                              Phase 1 changes, HKEx’s trading hours for securities will overlap with the
                              Mainland’s for 3.5 hours and there will be a 4-hour overlap in the derivatives
                              markets. Phase 2 will complete the overlap. Trading hours on a typical
                              business day will continue to be longer in Hong Kong than on the Mainland.

                              HKEx’s revised trading hours (5 and 5.5 hours for the securities and
                              derivatives markets respectively upon Phase 1 implementation and 5.5
                              and 6 hours respectively upon Phase 2 implementation) also will strengthen
                              its competitiveness by narrowing the gap between its trading hours and
                              those of its regional competitors.


                              Results of Market Consultation
                              The decision to extend the trading hours was based on the feedback
                              collected from a six-week public consultation that began on 17 September
                              last year. HKEx received a total of 556 submissions from a wide spectrum
                              of respondents, including its Participants, brokerage industry associations,
                              listed companies and a related association, groups representing banks,
                              fund managers and market practitioners, other entities and individuals.

                              1
                                  Derivatives market refers to HKEx’s stock futures, stock options, index futures and index options
                                  markets.
                              2
                                  The pre-market opening periods only apply to the Hang Seng Index, Mini-Hang Seng Index and
                                  H-shares Index futures.




6   Exchange • January 2011
Trading Hours to be Extended in Two Phases


                              The vast majority of respondents supported an earlier opening time in
                              the morning. There was also widespread support for a shorter lunch
                              break. However, they were mixed on the details, with advocates calling
                              for no lunch break, a 1-hour lunch break, a 1.5-hour lunch break and the
                              status quo.


                              Way Forward
                              HKEx will continue to monitor both the relationship between the Hong
                              Kong and Mainland markets and its markets’ competitiveness vis-à-vis
                              other markets in the region. If warranted by future developments, HKEx
                              will review its trading hours again at the appropriate time and determine
                              whether further changes are needed.

                              Details of the consultation conclusions are available on the HKEx website.




7   Exchange • January 2011
  Hosting Services to be Offered
  at Next Generation Data Centre

HKEx plans to offer             Provisioning of hosting services is in line with recent global exchange trends
hosting services at its         which have seen low latency co-location offerings within an exchange’s data
                                centre become increasingly common. Recent moves by major exchanges
Next Generation Data            have also allowed technology vendors to operate within the exchange data
Centre, which is scheduled      centre, with vendors offering value-added services to Exchange Participants.
to start supporting
HKEx’s cash market in           Services Planning
the fourth quarter of           Over 100 interviews were conducted last year with brokers, information
2012. These services            vendors, technology vendors and telecommunications providers, as well
                                as other global exchanges, to gauge local marketplace demand. Initial
will provide a top tier         business planning was conducted in conjunction with Actel Consulting, a
technology infrastructure       leading specialist strategy and technology consulting firm operating across
for HKEx’s markets and          the Asia-Pacific, Middle and East Africa regions.
will be available to brokers,
                                Market feedback indicated strong demand for low latency market data and
technology vendors,             market access with value-added services from vendors in a telecommunications-
information vendors and         neutral environment. An ecosystem approach was then derived whereby
other suitable customers.       hosting services would allow Exchange Participants to interact with
                                information and technology Vendors in a highly connected environment.


                                                                   Exchange
                                                                  Participants



                                                        HKEx                     Technology
                                                       Systems                    Vendors
                                                                    Hosting
                                                                   Ecosystem



                                                              Telco         Information
                                                            Providers         Vendors




                                Services to be Offered
                                Services will be built on HKEx’s existing market infrastructure and will
                                include the following features:

                                •   Tier 4 data centre provisioning provided by HKEx;
                                •   Low latency co-location to HKEx securities and derivatives markets;
                                •   Low latency HKEx market data;
                                •   International market data feeds;
                                •   Infrastructure and software provisioning by hosted technology vendors;
                                •   Telecommunications-neutral connectivity to greater China and other
                                    global markets.

                                Potential customers of the hosting services who wish to learn more may
                                contact the Sales and Marketing section of HKEx’s Platform Development
                                Department by email at:     hostingservices@hkex.com.hk.
8   Exchange • January 2011
  Upgrades to AMS/3.8 and MDS/3.8
  Proceed on Schedule



The upgrades of HKEx’s         An MDS/3.8 vendor seminar was held in October for the senior management
systems for securities         of IVs responsible for business development, product development and
                               Information Technology to help them familiarise themselves with the
trading and securities         changes related to the system upgrade and to explain the details of the
market data to AMS/3.8         technical changes. HKEx also conducted three AMS/3.8 technical seminars
and MDS/3.8 respectively,      in November last year for EPs’ IT development staff and system vendors.
key initiatives in the HKEx
                               AMS/ 3.8 will essentially operate in the same way as the existing
Strategic Plan 2010–2012,      securities market trading system, AMS/3. However, the system upgrade
are progressing according      will increase the processing capacity over the existing system by about
to the plan and are expected   10-fold to 30,000 orders per second, and reduce average latency to
                               9 milliseconds, 16 times faster than present. Market transparency will also
to be completed by the         be improved as AMS/3.8 will display the 10 best price levels compared to
end of this year.              the five best price levels in the current system. In addition, some legacy
                               system functions will be streamlined to improve Exchange Participants’
                               operational efficiency.

                               Upon the rollout of MDS/ 3.8 , throughput for market data dissemination
                               will be increased to 2,000 stock page updates per second from 1,000
                               stock page updates per second. As a transitional arrangement, HKEx will
                               disseminate market data at both message rates in the first year following
                               the upgrade.

                               To help Exchange Participants (EPs) and information vendors (IVs) prepare
                               for the upgrades, HKEx has published on its main website the details
                               of changes in the Open Gateway Interface Specifications for Broker
                               Supplied Systems and Order Routing System – Proprietary Network System
                               Transmission Specifications that have been made to support AMS/3.8 .
                               The transmission specifications for both the Market Datafeed (MDF) and the
                               Unicast Standard Level-2 Datafeed are also posted on the HKEx website
                               to assist IVs in interfacing with MDS/3.8 .

                               EPs and IVs are reminded to check and plan in advance with their internal
                               IT support units and system vendors to ensure adequate resources are in
                               place to implement the necessary changes on schedule. Meanwhile, HKEx
                               will continue to update EPs and IVs on the project’s progress and arrange
                               sufficient testing sessions for EPs and IVs before the launch of the project.




9   Exchange • January 2011
  PRS Plus – A New, Faster Derivatives
  Market Datafeed – to be Launched in
  Second Quarter


HKEx is preparing to            At present, derivatives market data is disseminated through the market’s
roll out its new derivatives    trading system to Exchange Participants and the Price Reporting System
                                (PRS) delivers the data to information vendors for onward dissemination
market datafeed service –       to their customers. The market data disseminated via the two channels is
PRS Plus – in the second        essentially the same in terms of latency and content. To keep up with the
quarter of this year.           market’s development and anticipated trends, the capacities of the two
                                systems, as well as the line bandwidths for their data transmission, have
                                been upgraded in tandem periodically over the past years.

                                In response to the increasing demand for faster market data from latency
                                sensitive market participants, HKEx has decided to introduce PRS Plus
                                and offer it as a data option alongside the current PRS feed. The new PRS
                                Plus datafeed will be identical to the current PRS feed in terms of content
                                and message format, but the new feed will transmit PRS messages at
                                an update frequency that is five times that of the current feed. HKEx will
                                offer fee concessions to end users (such as Exchange Participants and
                                derivatives market makers) which subscribe for PRS or PRS Plus data
                                solely for internal use.

                                Offering PRS Plus as an optional data solution is in line with HKEx’s strategy
                                to diversify its market datafeeds to meet different needs and provide higher
                                quality market data (in terms of latency and depth) through information
                                systems instead of trading systems so that the systems’ computing
                                resources can be used more cost effectively. Separate systems for trading
                                and market data also enable HKEx to meet different data needs in the
                                market without requiring all users to have system capacity and bandwidth
                                they may not need.




10    Exchange • January 2011
  Free Prices Website Service
  to be Expanded and Repackaged
  as Basic Market Prices Service


HKEx has announced that        The BMP Service’s securities market data will be the same as the securities
its Free Prices Website        market data currently available under the Pilot Programme: nominal/last
                               traded price, closing price, the day’s high/low prices, trading volume and
Service will be repackaged     turnover value of individual securities traded on the Stock Exchange, as
as the Basic Market Prices     well as their Indicative Equilibrium Price, or IEP, and Indicative Equilibrium
(BMP) Service, a standard      Volume, or IEV, during the pre-opening session. A corresponding BMP
                               Service will be added for the derivatives market to increase market
market data package that
                               transparency.
will be offered to HKEx’s
licensed real-time market      Information vendors will be charged separate monthly flat-rate fees to
data information vendors       subscribe to the BMP Service for each market. The subscription fee for
                               securities market data will be $80,000 per month and the fee for derivatives
from 1 April.                  market data will be $27,000 per month.

                               The service scope and delivery channels of the BMP Service will be
                               broadened to make it more investor-friendly. Information vendors will be
                               able to provide the BMP Service not only through their websites, but also
                               on other service platforms such as mobile web, mobile phones and PDAs,
                               smart phone applications, interactive TV and pagers.

                               Subject to separate fees, information vendors also will be able to provide
                               the BMP Service for their clients either on their own websites or their clients’
                               websites. Exchange Participants, financial institutions, listed companies,
                               structured product issuers and index compilers which are interested in
                               carrying the BMP Service but do not wish to become an HKEx licensed
                               information vendor may welcome such add-on arrangements.

                               Information vendors wishing to provide the BMP Service will need to file a
                               service application with HKEx. Given the time required to process a service
                               application and the anticipated interest in the new service, information
                               vendors are encouraged to apply as soon as possible if they aim to offer
                               the BMP Service to their clients once the BMP Service is available to the
                               market in April this year.




11   Exchange • January 2011
New Single Licence Regime Helps
HKEx and its Information Vendors



                               HKEx introduced its Single Licence Regime for information vendors (IVs)
                               on 20 December last year to simplify its dealings with the IVs distributing
                               information from its securities and derivatives markets.

                               Under the new Regime, the four separate market data licence agreements
                               for HKEx’s securities market data, stock options market data, Futures
                               Exchange market data and Issuer Information feed Service have been
                               consolidated into a single agreement which can also accommodate new
                               datafeed products. A new derivatives market data package comprising
                               stock options market data and Futures Exchange market data has also
                               been introduced.

                               Most of the direct-connection IVs are expected to pay less in fees under
                               the new regime. In addition, special discounts will be offered until the end
                               of 2011 to IVs which join the new regime and redistribute both securities
                               and derivatives market data.




                               A display in HKEx’s Exhibition Hall shows some of the services offered by information vendors.




12   Exchange • January 2011
Successful Rollout of
Dividend Futures



                               HKEx introduced HSI Dividend Point Index (DPI) futures and HSCEI DPI
                               futures on 1 November last year to provide investors with instruments for
                               trading or hedging their exposure to dividends from the companies in two
                               of Hong Kong’s benchmark stock market indices, the blue chip Hang Seng
                               Index (HSI) and the Hang Seng China Enterprises Index (HSCEI), which
                               tracks the performance of H shares. DPI futures, or Dividend Futures, can
                               also be used by institutional investors to diversify a traditional portfolio.

                               As of 31 December 2010, 6,790 Dividend Futures contracts had been
                               traded at HKEx and open interest for HSI and HSCEI dividend futures
                               was 1,270 and 1,138 contracts respectively (please see the chart below).

                               Trading Volume and Open Interest of HSI and HSCEI
                               Dividend Futures (Nov and Dec 2010)

                               Daily Volume (contracts)                               Open Interest (contracts)




                               The primary users of HKEx’s Dividend Futures are institutional investors.
                               As of the end of December 2010, most of the 15 Exchange Participants
                               that had traded HSI or HSCEI Dividend Futures were firms with investment
                               banking backgrounds.


13   Exchange • January 2011
Successful Rollout of Dividend Futures


                               HKEx has appointed three market makers, BNP Paribas Futures (Hong
                               Kong) Ltd, Goldman Sachs Futures (Asia) Ltd and SG Securities (HK) Ltd,
                               to provide continuous bid-ask prices good for at least 50 HSI or HSCEI
                               Dividend Futures contracts to enhance market liquidity. Generally speaking,
                               the width of bid-ask spreads was tight as 1 – 5 index points for the front
                               year contracts. The following table is a snapshot of on-screen quotes for
                               Dividend Futures in early December last year.

                               Quotes for Dividend Futures Shortly Before the Market
                               Close on 6 Dec 2010
                                                                    Contracts                      Bid               Ask
                               HSI Dividend Futures                 DHS (Dec 2010)            629.95               634.96
                               (HKATS Code: DHS)
                                                                    DHS (Dec 2011)            666.00               670.00
                                                                    DHS (Dec 2012)            691.00               700.89
                               HSCEI Dividend Futures               DHH (Dec 2010)            289.30               290.30
                               (HKATS Code: DHH)
                                                                    DHH (Dec 2011)            315.00               318.00
                                                                    DHH (Dec 2012)            322.50               326.74


                               HKEx organised seminars with its Market Makers, the Hong Kong Securities
                               Institute and Bloomberg to introduce the HSI and HSCEI DPIs and contract
                               details of its Dividend Futures. Market Makers gave presentations at the
                               three seminars on trading applications for Dividend Futures.

                               Additional information about HKEx’s Dividend Futures is available on the
                               HKEx website.




                               An HKEx executive speaks at one of the seminars that introduced Dividend Futures.




14   Exchange • January 2011
  HKEx and the SFC Seek to Raise
  Investors’ Awareness of Synthetic ETFs

HKEx and the Securities and Futures Commission (SFC) have introduced new measures to raise investors’
awareness of Exchange Traded Funds (ETFs) that primarily adopt a synthetic replication strategy (synthetic ETFs).

Since 22 November last year, HKEx has placed a marker (the letter X) at the beginning of the English and Chinese
stock short names of all synthetic ETFs listed on the Stock Exchange. This makes them more visible on the stock
pages of HKEx’s securities trading system and on the HKEx website and HKExnews website. The stock short
names of traditional ETFs remain the same.

Unlike a traditional ETF (also known as a physical ETF) that invests in underlying assets that replicate or represent the
composition of the index it tracks, a synthetic ETF uses financial derivative instruments to track index performance.

The new measures enable investors to identify the synthetic ETFs in HKEx’s
securities market easily so they can consider whether the ETFs are suitable
for them before making any investment decisions. However, investors should
also refer to the prospectuses and other documents issued by the ETF
managers for further information about the ETFs before investing in them.

The HKEx website has been enhanced to show which ETFs listed in Hong
Kong are synthetic. In addition, the website now includes the names of
all managers of Hong Kong-listed ETFs and their contact details. HKEx
has also published a new ETF product leaflet (downloadable from HKEx
website     ) which explains the product features, risks of synthetic ETFs
and how to identify synthetic ETFs in its securities market.

The SFC will continue its efforts to help investors better understand
synthetic ETFs.

Meanwhile, HKEx issued a circular to all Stock Exchange Participants
on synthetic ETFs listed on the Exchange, explaining how the Exchange               HKEx has published a new leaflet which
determines stock short names and showing the stock codes the Exchange               explains features and risks of synthetic ETFs.
has allocated to various products, including ETFs.

HKEx and the SFC also jointly issued a circular to ETF managers to provide them with a non-exhaustive list of
events that may trigger a disclosure obligation under the SFC’s Code on Unit Trusts and Mutual Funds and/or the
Stock Exchange’s Listing Agreement.


 What Are Synthetic ETFs?
 Synthetic Exchange Traded Funds, or ETFs, do not buy the assets in their benchmark. Instead, they typically invest in
 financial derivative instruments to replicate the benchmark’s performance. The ETFs are required to have collateral
 when investing in derivatives (details of the net and gross counterparty exposure and types and composition
 of the collateral are published on the ETF’s website). An ETF’s net risk exposure to any single counterparty (the
 net value of any collateral provided) cannot be more than 10 per cent of the fund’s net asset value, or NAV.
 Investors interested in buying units in an ETF should begin by reading the product’s key facts statement and
 the prospectus carefully to ensure they understand how the fund operates.


15     Exchange • January 2011
  Update on SPRINTS,
  the Structured Products Integrated
  Transaction System


As reported in the previous    The implementation of SPRINTS is aimed to automate and streamline the
issue of Exchange, HKEx        processing of listing applications the Exchange receives from structured
                               product issuers and support any future growth in business volume. Under
is developing a web-based      the Main Board Listing Rules, a structured product issuer must submit a
Structured Products            term sheet setting out the principal features of its product to the Exchange
Integrated Transaction         for clearance prior to the product’s launch.
System (SPRINTS) that
                               To help structured product issuers prepare for the new system, HKEx held
allows structured product      a briefing session in mid-August last year to explain the system’s high level
issuers to submit term         features and functionalities. In September, HKEx sent the Term Sheet Data
sheet data electronically      File Specifications to issuers to give them the relevant information if they
                               want to modify their systems or develop new systems so they can use
to the Stock Exchange          SPRINTS’ Term Sheet File Upload function. SPRINTS will have two input
in a standardised format       channels for term sheet data submission: (1) Term Sheet File Upload, which
(Extensible Markup             will allow the issuer to submit multiple term sheets in XML in a single file;
                               and (2) Term Sheet Manual Input, where the issuer will be able to input
Language, or XML).
                               term sheet data on a pre-defined screen one sheet at a time.
User acceptance testing
of SPRINTS is currently        In December last year, HKEx sent out a questionnaire to structured product
underway and is expected       issuers to collect information about the readiness of their systems for the
                               submission of term sheet data via SPRINTS. To prepare for system testing,
to be completed around         issuers have been requested to indicate whether their internal systems will
the end of January.            be ready in time to participate in the trial run to be conducted in February
Structured product             this year. The purpose of the trial run is to verify the readiness of issuers’
                               internal systems to support submission of multiple term sheets in XML in
issuers will be invited to
                               a single file.
participate in a trial run
scheduled for February.        Details of the user training and rollout arrangement will be communicated to
                               issuers in due course, and HKEx will continue to work closely with issuers
                               to achieve a successful implementation of the new system in the second
                               quarter of this year.




16   Exchange • January 2011
  HKEx Announces Way Forward on
  Listing-related Proposals



HKEx has published             Use of Electronic Listing Documents with Paper
consultation conclusions on    Application Forms
                               Environmental concerns and the development of the Internet have prompted
some of its Listing-related
                               HKEx to consider changes to the Listing Rules requiring issuers to submit
proposals. Corresponding       hard copies of documents.
changes to the Stock
Exchange’s Listing Rules       Among other green campaigns, HKEx and the Securities and Futures
                               Commission (SFC) have adopted a proposal to allow the issue of paper
took effect late last year     application forms for public offers of certain securities without a paper
or will take effect on         prospectus, subject to conditions in a class exemption. Similar waivers
1 February this year.          are available to issuers of SFC-authorised collective investment schemes
                               seeking a listing on the Stock Exchange.

                               An issuer who chooses the new option, known as a mixed media offer
                               (MMO), must make an online prospectus available on the HKEx website and
                               the issuer’s own website. In addition, free copies of the paper prospectus
                               must be available at specified locations for investors who request one.

                               MMO is not designed to remove hard copies entirely, but it sets the stage
                               for further moves towards a paperless environment as investors become
                               more used to online versions.

                               The consultation conclusions were published in November last year and
                               the class exemption notice and Listing Rules amendments are expected
                               to take effect from 1 February this year.


                               Acceptance of Mainland Accounting and
                               Auditing Standards and Mainland Audit Firms
                               for Issuers Incorporated in Mainland
                               The Consultation Conclusions on Acceptance of Mainland Accounting and
                               Auditing Standards and Mainland Audit Firms for Mainland Incorporated
                               Companies Listed in Hong Kong were published on 10 December last
                               year and the related Listing Rule amendments came into effect on 15
                               December 2010.

                               HKEx decided to adopt the proposed framework, which was a joint effort
                               of Hong Kong regulators, the Ministry of Finance (MOF) and the China
                               Securities Regulatory Commission (CSRC). The framework:




17   Exchange • January 2011
  HKEx Announces Way Forward on Listing-related Proposals


• Accepts Mainland accounting and auditing standards for issuers that are incorporated in the Mainland;

• Allows Mainland audit firms endorsed by MOF and CSRC to service these issuers; and

• Provides for a reciprocal arrangement to allow companies incorporated or registered in Hong Kong and listed on
  the Mainland to prepare their financial statements using Hong Kong Financial Reporting Standards or International
  Financial Reporting Standards and be audited by Hong Kong audit firms using Hong Kong’s auditing standards
  or the international standards.

The new Rules provide Mainland-incorporated issuers listed in Hong Kong with an option to prepare their financial
statements using Mainland accounting standards and have them audited by endorsed Mainland audit firms using
Mainland auditing standards. This is expected to increase market efficiency and reduce compliance costs of
Mainland-incorporated companies listed in Hong Kong.


Changes to the Listing Rules for Qualified Property Acquisition Exemption and
Formation of Joint Ventures
HKEx will amend the Listing Rules on 1 February this year to relax the requirements for Qualified Property
Acquisitions and formation of joint ventures. A consultation paper was published in September last year to seek
comments on the subject and the consultation conclusions were announced on 21 January this year.

The Rules currently exempt acquisitions of government land by listed property developers through public auctions
or tenders in Hong Kong. The new Rules extend this exemption to government land acquisitions in the Mainland
and relax some exemption conditions that are considered restrictive or impractical. Small to medium-sized listed
property developers will be on more even footing with their unlisted counterparts as the exemption will allow them
to bid for government land in the Mainland without prior shareholders’ approval.

The new Rules also introduce an exemption for the formation of joint ventures. A joint venture formed to engage
in a single-purpose project will be exempt from the notifiable transaction requirements if it is of a revenue nature
to the issuer and in its ordinary course of business. Currently, revenue transactions are exempt from the notifiable
transaction requirements. The new Rules effectively “see through” the form of the joint venture arrangement and
apply the same exemption to revenue transaction projects.


Change to the Minimum Number of Shareholders for the Market Capitalisation/
Revenue Test
On 21 January this year, HKEx published consultation conclusions on a proposed change to the minimum
shareholder requirement for the Market Capitalisation/Revenue Test in the Listing Rules from 1,000 to 300
shareholders and announced the change will be implemented on 1 February this year. All 11 responses HKEx
received during the consultation period supported the proposed change.

The Market Capitalisation/Revenue Test is one of three eligibility tests under the Listing Rules. A Main Board
applicant may list under the:

• Profit Test;

• Market Capitalisation/Revenue/Cash Flow Test; or

• Market Capitalisation/Revenue Test.

Under the current requirements, an applicant has to distribute shares to a minimum of 1,000 shareholders if it
wants to list under the Market Capitalisation/Revenue Test but only 300 shareholders if it wants to list under either
of the first two tests. The change will bring the minimum shareholder requirement for all three tests into line.




18     Exchange • January 2011
  Consultations Seek Views on Proposals
  Regarding Listing Matters



HKEx is consulting the         Joint Consultation Paper on Proposed Changes to
market on proposed             Property Valuation Requirements
                               On 3 December last year, HKEx and the Securities and Futures Commission
changes to the Stock
                               (SFC) published a joint consultation paper on proposed changes to property
Exchange’s Listing Rules       valuation requirements for applicants and issuers. The objectives behind the
and other requirements         proposals are to remove unnecessary burdens on applicants and issuers
for listing applicants and     and enhance the quality of information provided to investors. Under the
                               current requirements, an applicant must include valuation information on all
listed issuers. The primary    its property interests in its prospectus. Both applicants and issuers must
objective is to streamline     continue to disclose relevant information about material properties under
the requirements while         the general disclosure obligation.
ensuring investors receive
                               The joint consultation paper can be downloaded from the HKEx website or
important information from     the SFC website. The consultation period will end on 11 February this year.
companies listed on the
Exchange or applying for       Consultations Announced in Mid-December Last Year
a listing.
                               Consultation on Review of CG Code and Associated
                               Listing Rules’ Sections
                               The principal objective of the review is to promote a higher level of corporate
                               governance among listed issuers, the importance of which was highlighted
                               in the recent financial crisis. Other major markets and international financial
                               centres have already implemented, or are currently implementing, reforms
                               on corporate governance. The changes that HKEx is proposing are generally
                               in line with international best practice.

                               Under the proposals, some Code Provisions are promoted to Rules because
                               of their importance and many Recommended Best Practices are upgraded
                               to Code Provisions. The issuer continues to have the flexibility to comply
                               with the Code Provisions and if it decides not to adopt a Code Provision,
                               it must explain the reasons for the decision in its corporate governance
                               report. For Recommended Best Practices, issuers are encouraged, but not
                               required, to state whether they have complied. The aim of the proposed
                               Rule amendments is to encourage better accountability of issuers and
                               directors.

                               HKEx also proposes to revise some Listing Rules that may be impractical
                               or burdensome to the market, or may not meet their intended corporate
                               governance purpose.

                               The consultation period will end on 18 March this year.

19   Exchange • January 2011
Consultations Seek Views on Proposals Regarding Listing Matters


                               Consultation on Proposed Changes to Rules for
                               Listing Debt Securities
                               HKEx has published a consultation paper on Chapter 37 of the Listing
                               Rules, a chapter that deals with debt securities offered only to professional
                               investors.

                               HKEx is proposing to:

                               • Present the Rules in a more accessible language;

                               • Align the definition of professional investor in the Rules with that in the
                                 Securities and Futures Ordinance;

                               • Leave the existing issuer eligibility criteria broadly unchanged;

                               • Simplify application and approval procedures;
                               • Replace the current prescribed disclosures for listing documents with
                                 a requirement to include information that is customary for offers of debt
                                 securities to professionals; and
                               • Remove continuing obligations on issuers that are not appropriate for
                                 offers that are only available to professionals.

                               None of the proposals apply to debt offered to retail investors.

                               Adoption of the proposals would bring the Stock Exchange more in line with
                               the requirements of other stock exchanges and allow it to offer processing
                               times comparable to those of other exchanges.

                               The consultation will end on 18 February this year.

                               Consultation on Proposed Changes to
                               Ex-entitlement Trading and Shareholder Approval
                               HKEx is seeking market views on whether shares should be traded ex-
                               entitlement only after the entitlement has been approved by shareholders.

                               Entitlements are benefits distributed by a company to its shareholders.
                               Some entitlements are announced and then distributed to registered
                               shareholders directly. Others are proposed by the board and require
                               shareholder approval at a general meeting in accordance with statutory
                               or Listing Rule requirements (these are conditional entitlements).

                               In Hong Kong, there is no restriction on the timing of the record date for
                               a conditional entitlement. The company can set the record date before or
                               after the date of shareholder approval. This practice is quite different from
                               the practices in the major markets (including Shanghai and Shenzhen,
                               New York, Australia and Singapore) which require that shares not go ex-
                               entitlement until after shareholder approval.




20   Exchange • January 2011
Consultations Seek Views on Proposals Regarding Listing Matters


                               The way a company designates its record date for an entitlement may have
                               a negative impact on the trading of its shares. If the record date (and thus
                               the ex-date) is set before the date of the general meeting, sellers on the
                               ex-date will be subject to the risk that they will not receive the entitlement
                               as expected if the distribution is blocked by shareholders at the general
                               meeting. Similarly, if the distribution is blocked at the general meeting,
                               buyers on or after the ex-date may receive a windfall gain by paying a
                               price that is lower than it would have been if the sellers had known the
                               distribution would be blocked. If the record date (thus the ex-date) must be
                               set after the general meeting at which the entitlement is approved, sellers
                               on the ex-date would not be exposed to any risk of uncertainty and trading
                               of shares would be fair to both buyers and sellers.

                               The consultation period will end on 28 February this year.

                               Note: The joint HKEx-SFC consultation paper published on 3 December
                               last year and the consultation papers for the proposals announced in mid-
                               December last year have been posted in the Market Consultations section
                               of the HKEx website.



                               Listing Committee Provides Interim Guidance on
                               Pre-IPO Investments
                               The Listing Committee has given interim guidance on pre-initial public
                               offering, or pre-IPO, investments to provide the market with more clarity
                               on the Stock Exchange’s practice pending consideration of possible
                               amendments to the Listing Rules.

                               Under the interim guidance in October last year, the Exchange will
                               generally require, except in very exceptional circumstances, that pre-
                               IPO investments must be completed either at least 28 clear days before
                               the date of the first submission of the first listing application form or 180
                               clear days before the first day of trading of the applicant’s securities on
                               the Exchange. Pre-IPO investments are considered completed when the
                               funds are irrevocably settled and received by the applicant.

                               Potential applicants are encouraged to consult the Listing Division before
                               submission of listing applications if they have any questions.

                               Additional information on the interim guidance is in the 13 October 2010
                               news release on the HKEx website.




21   Exchange • January 2011
  Chatroom
Head of Legal Services
and Chief Counsel

Christine Wong
Discusses Challenges and
Opportunities of Her Team
Christine Wong brought her 22 years of experience in the
legal and regulatory fields to HKEx when she joined as Head
of Legal Services and Chief Counsel in June 2010. Prior to
joining HKEx, she worked for a number of international law
firms focusing on corporate, corporate finance and financial
regulatory and compliance work, and most recently, spent
nine years as a Consultant with Linklaters. From 1995 to
2001, Ms Wong worked for the Securities and Futures
Commission and was a Senior Director of Corporate Finance,
actively involved in corporate finance and listing-related
matters. From October 2005 to June 2010, Ms Wong was a
member of the SFC’s Takeovers Panel and Takeovers Appeal
Panel. She has an LLB degree from The University of Hong
Kong and is qualified as a solicitor in Hong Kong and in
England and Wales.




Q
       HKEx is embarking       The legal services team has been
       on several new          playing a key supporting role in
                               implementing initiatives in our
       business initiatives.   Strategic Plan and will continue to
       What roles will         do so in the future.
       the legal services      In fact, I see the Legal Services
       team play in            Department working as an integral
       implementing these      part of each project team to bring
                               new initiatives to fruition. It is
       initiatives?            important that the business side
                               and the legal side work hand in hand
                               at an early stage of a project to work
                               out fundamental issues that require
                               management decisions, to develop
                               the legal framework on which a new
                               business function is to be set up, to
                               produce a work plan that meets the
                               implementation timetable, as well
                               as to identify legal issues for risk
                               assessment and management in
                               the longer term.
22   Exchange • January 2011
Chatroom

                               Experience over the last eight months shows that whether the initiative
                               relates to OTC (over-the-counter) derivatives clearing, construction of the
                               Next Generation Data Centre, development of hosting services or the
                               setting up of a market data hub in the Mainland, there is always a legal
                               aspect to the project on which business units would like to seek our advice
                               and support. We have to be able to meet these business needs and be
                               responsive to them.

                               However, I must say that keeping up with business needs is not always
                               easy. The broad range of initiatives covered in our Strategic Plan suggests
                               that the kind of legal support that HKEx needs is by definition diversified,
                               highly specific and technical. There have been, and will be, situations
                               where we find ourselves charting unknown waters. I have no doubt that
                               the legal team’s skill-set will evolve to meet changing business needs.
                               More and more so, it is the ability to be versatile and to always be open
                               to new challenges that add an exciting and interesting dimension to our
                               role within HKEx.




Q      What are your
       priorities in your
       role as HKEx’s
                               I am extremely lucky to have a team which is already familiar with and
                               experienced in handling the work of the group. However, our team is small.
                               There are only five lawyers in the Department and we deal with all legal
                               issues arising from every part of the business. It is, therefore, important that
       Head of Legal           we operate as efficiently as possible, keep abreast of legal and regulatory
                               developments that affect the business, and take a proactive approach
       Services and            towards managing work flow and work demands. These are, as I see
       Chief Counsel?          it, my key priorities as Head of Legal Services. We have been focusing
                               on developing our internal databases and know-how to facilitate work
                               efficiency and knowledge sharing, drawing from my previous experience in
                               this area. We hold regular internal meetings to keep lawyers aware of legal
                               and business developments and requirements. We have also been keeping
                               a close relationship with business units to ensure that we understand and
                               meet their needs.



Q      Generally, what are
       some of the key
       legal issues for an
                               Under the Securities and Futures Ordinance, the first and foremost duty
                               of HKEx is to ensure that the stock and futures markets in Hong Kong
                               are operated as fair and orderly markets and that risks associated with its
                               business and operations are managed prudently.
       exchange operator
       like HKEx?
23   Exchange • January 2011
Chatroom

                               In carrying out these duties, HKEx is obliged to act in the interest of the
                               public, in particular, the interest of the investing public. This is a statutory
                               duty which sets us apart from other commercial enterprises.

                               Therefore, one of our most important practical legal duties is to assist
                               management in ensuring that these objectives are met, and that our legal
                               risks are minimised.



Q      How does your
       new role differ
       from your previous
                               I see differences as well as similarities.

                               As the Senior Director of Corporate Finance of the SFC, I was responsible
                               for supervising the Listing Division of the Stock Exchange in the discharge of
       roles at the SFC        its listing function and its role as the frontline regulator of listed companies.
                               I was also responsible for vetting prospectuses on unlisted shares and
       and private law         debentures and overseeing the development of various corporate finance
       firms?                  policies. Hence, my role at the SFC was to act as a regulator with a specific
                               focus. Now, my role is to act as the principal legal adviser of HKEx, which
                               is involved in a diverse range of business activities. The experience as a
                               regulator at the SFC has certainly helped a great deal in preparing me for
                               the current role. This is because under the current regulatory framework,
                               HKEx and its principal subsidiaries are not only subject to SFC oversight
                               but they also perform the role of a regulator. Hence, an understanding of
                               how the regulator thinks and operates is beneficial.




24   Exchange • January 2011
Chatroom




                               As a legal practitioner in private practice, my work was to advise clients on
                               carrying out transactions and assist in regulatory clearance. This covered a
                               broad range of issues. Much of my work now is advisory in nature, covering
                               a wide spectrum. This is similar to my previous work in private practice. The
                               key difference of course is that now, I only advise one client – HKEx and
                               related group companies – although in practice, we have different clients
                               in different business units. In any event, the client focus and client-driven
                               training that I am used to in private practice continue to be of use in my
                               current role.



Q      How did you
       decide to join
       HKEx? How has
                               My decision to join HKEx was really driven by the nature of its work. It
                               seemed to me that because there are so many different facets to HKEx’s
                               work, being involved as its legal adviser would be incredibly challenging.
                               This is particularly so in light of the global regulatory reforms triggered by
       your experience         the financial crisis and the gradual internationalisation of the Renminbi.
                               HKEx’s unique position in Hong Kong means that it should be well-placed
       since joining HKEx      to initiate change. It would also be fascinating to see how HKEx itself
       about eight months      adapts to and manages the changes. I felt it would be exciting and an
       ago compared with       honour to be part of this.

       your expectations?      Now that I have joined HKEx for nearly eight months, I have not ceased
                               to be amazed by the interesting portfolio of its work. We can be advising
                               on a Small Claims Tribunal matter on one day but looking into how to
                               set up an OTC derivatives clearing business on another; we may be
                               involved in reviewing an IT contract, drafting a regulatory memorandum
                               of understanding, advising on a market data licence and dealing with rule
                               changes on Renminbi-readiness of the exchanges and the clearing houses
                               at the same time. It is fun to be involved in all these and I have particularly
                               enjoyed working with the lawyers in our team and many colleagues in the
25   Exchange • January 2011   business units.
  Retail Online Trading for
  Derivatives Continues to Grow
  By Research & Corporate Development Department




The HKEx Derivatives                 HKEx conducts the Derivatives Market Transaction Survey (DMTS) annually
Market Transaction                   to track trading in its derivatives (futures and options) market by investor
                                     type and purpose. The latest survey covers the major products in terms of
Survey 2009/10 found                 turnover volume — Hang Seng Index (HSI) futures, HSI options, Mini-HSI
that retail investors’               futures, H-shares Index (HHI) futures, HHI options and stock options. These
online trading continues             products accounted for about 99 per cent of the total turnover volume of
                                     the HKEx derivatives market during the study period (July 2009 – June
to grow, accounting
                                     2010). Figure 1 shows the trading volume by product under study for the
for about one-half of                five most recent surveys.
retail investor trading.
Exchange Participants’                Figure 1              Contract volume and percentage of total by
                                                            product under study (2005/06 – 2009/10)
principal trading remains
the largest contributor to
HKEx’s derivatives market
turnover, however, its
contribution has declined
over the past two years.
                                        Million contracts




                                      Note: Numbers may not add up to 100 per cent due to rounding.




26    Exchange • January 2011
  Retail Online Trading for Derivatives Continues to Grow


Distribution of Trading by Trade Purpose
The main transaction purpose of derivatives trading in 2009/10 was hedging, making up 45 per cent of the total
derivatives market turnover in 2009/10, up from 41 per cent in 2008/09. The proportion of turnover for pure trading
was also high (39 per cent, down from 42 per cent in 2008/09). Arbitrage turnover accounted for 16 per cent of
the overall market turnover in 2009/10, compared to 17 per cent in 2008/09. (See Figure 2.)

Figure 2      Distribution of derivatives market trading volume by transaction purpose for
              overall market and each product (Jul 2009 – Jun 2010)




Note: Numbers may not add up to 100 per cent due to rounding.



Distribution of Trading by Investor Type
In 2009/10, the contribution of EP principal trading (comprising market maker trading and EP proprietary trading)
remained the largest contributor to market turnover in HKEx’s derivatives market, making up 50 per cent of total
market volume, mostly from stock options (see Figure 3). However, it has declined for two consecutive years (from
53 per cent in 2008/09 and 61 per cent in 2007/08). This mainly reflects the decreasing contribution of market
maker trading (from 49 per cent in 2007/08 to 40 per cent in 2008/09 and down to 36 per cent in 2009/10). (See
Figure 4.)

The contribution from overseas investors was 24 per cent (21 per cent from institutions) in 2009/10, up from 22
per cent in 2008/09 and 19 per cent in 2007/08. The contribution from local investors was 26 per cent in 2009/10
— 20 per cent from retail and 6 per cent from institutions, similar to figures in 2008/09. (See Figures 3 to 5.)




27     Exchange • January 2011
  Retail Online Trading for Derivatives Continues to Grow


Figure 3      Distribution of derivatives market trading volume by investor type (in percentage terms)
              (Jul 2009 – Jun 2010)




Notes:
1. Exchange Participants’ principal trading comprises market maker trading and EP proprietary trading.
2. Numbers may not add up to 100 per cent due to rounding.




28       Exchange • January 2011
  Retail Online Trading for Derivatives Continues to Grow


Figure 4      Distribution of derivatives market trading volume by investor type (2000/01 – 2009/10)




     Overall market                                               2005/06        2006/07        2007/08   2008/09   2009/10
     Principal trading1                                              47.4           55.0           60.6      52.5      49.9
     – Market makers                                                 33.7           40.0           49.0      39.9      36.2
     – Proprietary trading                                           13.7           15.0           11.6      12.6      13.7
     Local investors                                                 29.2           23.8           20.6      25.4      25.6
     – Retail                                                        21.5           18.0           17.0      20.2      20.0
     – Institutional                                                  7.7            5.8            3.6       5.2       5.6
     Overseas investors                                              23.5           21.1           18.8      22.1      24.5
     – Retail                                                         2.3            2.0            2.0       3.2       3.5
     – Institutional                                                 21.1           19.2           16.8      18.9      20.9
     Total                                                          100.0          100.0          100.0     100.0     100.0

Notes:
1. Exchange Participants’ principal trading comprises market maker trading and EP proprietary trading.
2. Numbers may not add up to 100 per cent due to rounding.



Figure 5      Distribution of derivatives market trading volume by investor type (local vs overseas)
              (2000/01 – 2009/10)




Note: Numbers may not add up to 100 per cent due to rounding.




29       Exchange • January 2011
  Retail Online Trading for Derivatives Continues to Grow


Trading composition by investor type differed by product. For HSI futures, the contribution from overseas institutional
investors was the most significant — 39 per cent (up from 34 per cent in 2008/09), followed by local retail
investors (30 per cent). For Mini-HSI futures, local retail investors remained the major participant type. However,
their contribution dropped below 50 per cent for the first time to 47 per cent in 2009/10 (58 per cent in 2008/09).
For HHI futures, overseas investors contributed the majority of the product’s trading (58 per cent), mainly from
institutions (56 per cent). For HHI options, EP principal trading and overseas institutional investors were the two
major contributors (38 per cent and 29 per cent respectively). EP principal trading dominated the turnover of stock
options (75 per cent) and was also the most significant contributor to HSI options (47 per cent). (See Figure 6.)

Figure 6      Distribution of derivatives market trading volume by investor type for overall market and
              each product (Jul 2009 – Jun 2010)




Notes:
1. Market maker trading and EP proprietary trading are components of EP principal trading.
2. Numbers may not add up to 100 per cent due to rounding.



Distribution of overseas investor trading by origin
Overseas investors contributed 24 per cent of total market trading in 2009/10. Among them, UK investors and
US investors were the two largest groups, both contributing 25 per cent of the total overseas investor trading.
However, UK investors’ contribution dropped from 29 per cent in 2008/09 while US investors’ contribution grew
from 19 per cent in 2008/09. The contributions from European (excluding UK), Singaporean and Mainland China
investors were also significant (13–14 per cent in 2009/10, compared to 10–11 per cent in 2008/09). The aggregate
contribution to overseas investor trading from Asian investors (Mainland China, Singapore, Japan, Taiwan and the
Rest of Asia) was 30 per cent in 2009/10, up from 24 per cent in 2008/09. (See Figure 7.)




30       Exchange • January 2011
  Retail Online Trading for Derivatives Continues to Grow


Although the survey did not ask for a breakdown by retail/institutional investors for each overseas origin, a minimum
proportion of retail/institutional investors trading from each origin could be deduced from EPs’ responses. Overseas
investor trading from the US, the UK, Continental Europe, Japan, Singapore and Australia came predominantly
(around 90 per cent or more) from institutional investors, while at least three-quarters of Mainland investor trading
came from retail investors.


Figure 7       Distribution of overseas investor trading volume in derivatives by origin
               (in percentage terms) (Jul 2009 – Jun 2010)




* Reported origins in “Others” in 2009/10 comprised Africa, Belize, British Virgin Islands, Canada, Caribbean, Cayman Islands, Liberia,
  Middle East and New Zealand.
Note: Numbers may not add up to 100 per cent due to rounding.



Changes in Contract Volume by Investor Type
From the percentage contributions obtained from the survey, the implied contract volumes by investor type during
each study period were computed based on the actual volume for the products.

The total market turnover volume (products under study only) decreased by 4 per cent year-on-year in 2009/10.
The volume of EP principal trading (in number of contracts) decreased for the second year by 8 per cent in
2009/10, mainly reflecting the decrease in market making which was mainly in stock options. Retail investor
trading decreased by 3 per cent, the first decrease since 2001/02, mainly reflecting the decrease in local retail
investor trading (down 4 per cent). Institutional investor trading continued its year-on-year growth for the past nine
years and increased by 6 per cent from 2008/09, mostly reflecting the increase in overseas institutional trading
(up 7 per cent). As overseas investor trading came mainly from institutions, year-on-year growth in total overseas
investor trading has also been observed for the past nine years.

For overseas investor trading, trading from all the origins under study recorded year-on-year growth, except the
UK, Taiwan and Australia. In particular, trading from Mainland China investors continued its year-on-year growth
for the ninth consecutive year. (See Figures 8 & 9.)




31      Exchange • January 2011
           Retail Online Trading for Derivatives Continues to Grow


Figure 8                     Implied contract volume of derivatives by investor type (2000/01 – 2009/10)
Million contracts




                                                                                      Year-on-year % change
                    Type of trade                  2001/02     2002/03    2003/04   2004/05 2005/06 2006/07       2007/08   2008/09   2009/10
                    EP principal trading           -25.82%      22.24%     48.70%     6.19% 128.14%     91.57%    105.85%   -15.57%    -8.30%
                    Local investor trading          -2.14%       8.71%     45.13%     4.10%    39.07%   34.75%     61.63%    20.05%    -2.47%
                    – Retail                        -7.66%      21.86%     45.29%    -0.29%    42.66%   38.21%     76.70%    15.52%    -4.12%
                    – Institutional                 11.21%     -17.72%     44.65%    17.25%    29.95%   25.07%     15.11%    41.53%     3.91%
                    Overseas investor trading       39.52%      44.77%     35.72%    39.27%    38.84%   48.65%     65.84%    14.77%     6.96%
                    – Retail                       272.57%     -40.70%    108.07%    28.55%    52.10%   39.87%     88.65%    56.14%     6.22%
                    – Institutional                 24.89%      60.77%     30.72%    40.45%    37.51%   49.63%     63.47%     9.81%     7.08%
                    Total                           -7.11%      21.11%     44.10%   13.12%    70.56%    64.93%     86.86%    -2.54%    -3.45%

Note: Exchange Participants’ principal trading comprises market maker trading and EP proprietary trading.



Figure 9                     Implied contract volume of overseas investor trading in derivatives by origin
                             (2000/01 – 2009/10)
Million contracts




                                                                                       Year-on-year % change
                    Overseas origin                 2001/02    2002/03    2003/04   2004/05 2005/06 2006/07       2007/08   2008/09   2009/10
                    US                               66.71%     23.07%     36.93%    39.59%     -1.90% 110.60%     65.43%   -15.50%    41.19%
                    UK & Europe                       -7.36%    70.40%     27.16%   102.25%     37.97%   18.51%    67.89%     9.63%     5.85%
                    – UK                              -1.98%    19.16%     56.08%    30.41%     87.33%   39.52%    71.41%     5.88%    -7.22%
                    – Europe (excluding the UK)     -28.37%    344.19%    -14.31%   289.83%     -5.14% -17.75%     57.59%    21.58%    42.07%
                    Asia                            151.04%     30.85%     49.24%   -30.29%     75.63%   41.01%    62.07%    43.19%    31.25%
                    – Japan                         -46.30%    118.01%     23.79%    55.52% -19.06%      29.61%    43.49%    83.44%     7.39%
                    – Mainland China                145.28%     26.99%     91.35%     5.85% -15.33% 100.38%        96.75%    21.18%    26.16%
                    – Taiwan                      1,722.09%    -69.92%     20.05%   -70.04% 230.00% 109.66%        36.92%    88.74%   -20.30%
                    – Singapore*                           –          –    56.14%   -60.61% 196.62%       9.19%    34.00%    78.66%    45.59%
                    – Rest od Asia*                 155.25%    -71.17%    -42.14%    10.37%     88.40%    8.39%    38.24%   -39.84%    40.38%
                    Australia†                             –         –          –          –         –        –         –    45.21%   -71.05%
                    Others †                        -27.60%    123.90%     15.46%    50.24% 133.24% 116.73%       -75.08%    75.32%   -42.30%
                    Total                            39.52%     44.77%     35.72%    39.27%    38.84%    48.65%    65.84%    14.77%     6.96%

– : Not applicable
* For surveys before 2002/03, Singapore was included in “Rest of Asia”.
†
     For surveys before 2007/08, Australia was included in “Others”.




32                    Exchange • January 2011
    Retail Online Trading for Derivatives Continues to Grow


Retail Online Trading
Retail online trading as a proportion of total retail investor trading continued to grow, and for the first time,
contributed a majority of retail investor trading (51 per cent) in 2009/10, up from 43 per cent in 2008/09. Its
contribution to total market turnover was 12 per cent in 2009/10, up from 10 per cent in 2008/09. The respective
proportions for stock options and other derivatives also recorded significant increase. (See Figure 10.)

Figure 10 Retail online trading to retail turnover volume and total derivatives market volume
          (2001/02 – 2009/10)




       Retail online trading by product segment                2005/06              2006/07         2007/08        2008/09         2009/10
       Futures and options (excluding stock options)
       – As % of total product turnover*                          8.4%                10.4%           15.4%           17.6%           19.1%
       – As % of total retail investor trading of the products 25.8%                  34.3%           43.7%           49.2%           60.3%
       Stock options
       – As % of total product turnover#                          0.5%                 1.1%            0.9%            2.5%            4.8%
       – As % of total retail investor trading of the products    4.7%                14.7%           15.2%           22.8%           31.4%

* Turnover of products in the segment included in the study – HSI futures and options, HHI futures and options and Mini-HSI futures – measured
  by contract volume.
#
    Stock options turnover measured by contract volume.
Note: Figures before 2009/10 for the percentage of online trading to total market volume/total retail turnover volume were adjusted to reflect
      the refinement in the calculation of total implied online trading volume for the overall market.



The full survey report (English only) is available on the HKEx website.




33        Exchange • January 2011
   News Briefs
   CSRC Chairman’s Visit to HKEx
Shang Fulin, Chairman of the China Securities Regulatory Commission (CSRC), visited HKEx on 19 January for a
meeting with HKEx Chairman Ronald Arculli, Chief Executive Charles Li and other HKEx executives. Mr Shang had
a quick tour of the Stock Exchange’s Trading Hall after the meeting and then attended a luncheon hosted by HKEx.




               HKEx Chairman Ronald Arculli (second from left), Chief Executive Charles Li (second from right) and Head of Mainland
               Development Yang Qiumei (right) welcome CSRC Chairman Shang Fulin (centre) and CSRC Director General for
               International Affairs Tong Daochi (left) to the Trading Hall.




               Mr Shang (fifth from left) joins Mr Arculli (third from right), Mr Li (fourth from left) and Mr Tong (third from left) for a
               photo after receiving a red Stock Exchange trader’s jacket with the auspicious number 3826.




BOC International Deputy Chief Executive Tse Yung-hoi (left) briefs             Christopher Cheung, Chairman of Christfund Securities (left), updates
Mr Shang on market trends.                                                      Mr Shang on the Hong Kong markets.



34       Exchange • January 2011
  News Briefs


  HKEx’s Results for January – September 2010
HKEx had a profit attributable to shareholders of $3,478 million for the first nine months of 2010 (first quarter:
$1,127 million; second quarter: $1,131 million; third quarter: $1,220 million), compared with $3,413 million for
the same period in 2009 (2009 first quarter: $834 million; second quarter: $1,353 million; third quarter: $1,226
million). The slight rise in profit was primarily attributable to increased revenue from Stock Exchange listing fees
and higher turnover-related income resulting from more activity in HKEx’s securities market, which were partly
offset by a drop in net investment income on account of lower interest rates.

Financial Highlights (Financial figures are expressed in Hong Kong Dollar)
                                                      Nine months ended              Nine months ended
                                                            30 Sept 2010                  30 Sept 2009                 Change
KeY MaRKeT STaTiSTicS
Average daily turnover value on
  the Stock Exchange ($bn)                                                63.1                           61.3                3%
Average daily number of derivatives contracts
  traded on the Futures Exchange                                    212,953                         210,503                  1%
Average daily number of stock options contracts
  traded on the Stock Exchange                                      219,892                         193,147                 14%

                                                                                            As restated
                                                      Nine months ended              Nine months ended
                                                            30 Sept 2010                  30 Sept 2009
                                                                     $m                             $m                 Change
ReSuLTS
Revenue and other income                                                5,291                           5,163                2%
Operating expenses                                                      1,178                           1,140                3%
Profit before taxation                                                  4,113                           4,023                2%
Taxation                                                                  (635 )                          (610 )             4%
Profit attributable to shareholders                                     3,478                           3,413                2%
Basic earnings per share                                                $3.23                           $3.18                2%
Diluted earnings per share                                              $3.22                           $3.16                2%


  Awards for HKEx and its 2009
  Annual Report
HKEx’s 2009 Annual Report received two awards in
November of last year. It received the Best Report Award
– the highest honour – from the Hong Kong Management
Association and the Platinum Award in the Hang Seng
Index Category from the Hong Kong Institute of Certified
Public Accountants. The HKMA gives its awards for the
best annual reports and the HKICPA’s awards are for
the best corporate governance disclosure.

HKEx also received Best Corporate Governance (Hong
Kong), Best Investor Relations (Hong Kong) and Most
Committed to a Strong Dividend Policy (Hong Kong)
honours last year from FinanceAsia, based on the            The guest of honour, Hong Kong Secretary for Financial Services
results of the magazine publisher and website operator’s    and the Treasury KC Chan (centre), joins HKEx Company Secretary
                                                            Joseph Mau (right) and Wilson Fung, President of the Hong Kong Institute
annual poll to find Asia’s top companies.                   of Certified Public Accountants (left), for a photo at the accounting
                                                            industry group’s 2010 Best Corporate Governance Disclosure Awards
                                                            ceremony.
35     Exchange • January 2011
   News Briefs




Hong Kong Financial Secretary John Tsang (third from right) and HKEx Chairman Ronald Arculli (second from right) meet with BM&F Bovespa Chief
Executive Officer Edemir Pinto (second from left) and other executives from the Brazilian exchange operator during their visit to South America (photo
courtesy of Hong Kong’s Information Services Department).


   Overseas Visits Promote Listing in Hong Kong
HKEx representatives visited Europe, Japan and South America in the fourth quarter of last year to promote listing
in Hong Kong.

In October, HKEx Chairman Ronald Arculli led a group that travelled to Italy’s business centre, Milan, for discussions
with executives of potential listing applicants. The following month, HKEx Chief Marketing Officer Lawrence Fok
spoke at an Ernst & Young seminar in Tokyo on Hong Kong initial public offerings. Mr Fok also had meetings with
representatives of companies that have expressed interest in seeking listings in Hong Kong.

In late November, Romnesh Lamba, HKEx’s Head of Market Development, spoke on listing in Hong Kong at an
Asia Society breakfast in Mumbai and met with potential issuers of Hong Kong listed securities. Mr Lamba also
visited two stock exchanges during his short stay in India.

Mr Arculli resumed his travels on behalf of HKEx in early December when he went to Brazil to join a delegation
led by Hong Kong Financial Secretary John Tsang. While he was in Brazil, Mr Arculli visited Rio de Janeiro and
Sao Paulo and attended business luncheons, visited the country’s stock exchange and talked with executives of
companies that may be interested in listing in Hong Kong.


   Asian Financial Forum 2011
HKEx Chairman Ronald Arculli led a session titled “Asia: Reshaping the
Global Agenda” at the mid-January Asian Financial Forum 2011, a major
conference organised by the Hong Kong Government and the Hong Kong
Trade Development Council. The forum’s other participants included some
of the most influential people from business and finance, as well as regional
government leaders. The internationalisation of the renminbi was among
the wide range of issues covered during the two-day event.


   Newly Listed Companies
There were 113 companies listed on the Stock Exchange last year, 106
new Main Board listings and seven new listings on the Growth Enterprise                                 HKEx Chairman Ronald Arculli speaks at the
Market, or GEM. Please refer to “New Listing Report”   on the HKExnews                                  Asian Financial Forum 2011 in Hong Kong
                                                                                                        (Photo courtesy of the Hong Kong Trade
website for details.                                                                                    Development Council).


36       Exchange • January 2011
  Listing Decisions
                    Summary
Parties             Company A – a Main Board issuer, also listed on a Mainland stock exchange
                    The Appraiser – a Mainland real estate appraising company
                    Mr X and Mr Y – two real estate appraisers employed by the Appraiser
Issue               Whether Mr X and Mr Y who were not HKIS or RCIS members were qualified
                    valuers for Mainland properties
Listing Rules       Main Board Rule 5.08(2)(b), paragraph 4.1 of Practice Note 12
Decision            Mr X and Mr Y were qualified valuers for Mainland properties
The full text of the case can be found on the HKEx website.


                    Summary
Issues              Whether the Exchange would consider the Isle of Man an acceptable jurisdiction
                    under Chapter 19 of the Main Board Listing Rules
Listing Rules       1. Chapter 19 of the Main Board Listing Rules (Rules)
and                 2. Joint Policy Statement Regarding the Listing of Overseas Companies of 7 March
Regulations            2007 (JPS)
                    3. Listing Decisions HKEx-LD65-1; HKEx-LD65-2, HKEx-LD65-3,
                       HKEx-LD71-1, HKEx-LD80-1 and HKEx-LD84-1
                    4. Guidance Letter HKEx-GL12-09
Decision            The Isle of Man is an acceptable jurisdiction of an issuer’s place of incorporation
                    under Chapter 19 of the Rules if potential listing applicants incorporated in the
                    Isle of Man make certain revisions to their constitutive document and demonstrate
                    a reasonable nexus with the Isle of Man
                    Future applicants incorporated in the Isle of Man may follow the streamlined
                    procedures set out in Guidance Letter HKEx-GL12-09 and need not complete
                    a detailed line-by-line comparison with the JPS
The full text of the case can be found on the HKEx website.




37      Exchange • January 2011
  Listing Decisions




                     Summary
Parties              Company X – a company incorporated in Japan proposing to list on the Main Board
Issues               Whether the Exchange would consider Japan an acceptable jurisdiction under
                     Chapter 19 of the Main Board Listing Rules
Listing Rules        1. Chapter 19 of the Main Board Listing Rules (Rules)
and                  2. Paragraph 14 of Appendix 3 to the Rules
Regulations          3. Joint Policy Statement Regarding the Listing of Overseas Companies of 7 March
                        2007 (JPS)
                     4. Listing Decisions HKEx-LD65-1; HKEx-LD65-2, HKEx-LD65-3,
                        HKEx-LD71-1, HKEx-LD80-1 and HKEx-LD84-1
                     5. Guidance Letter HKEx-GL12-09
Decision             Japan is an acceptable jurisdiction of an issuer’s place of incorporation under
                     Chapter 19 of the Rules if Company X makes certain revisions to its constitutive
                     document
                     Future applicants incorporated in Japan may follow the streamlined procedures set
                     out in Guidance Letter HKEx-GL12-09 and need not complete a detailed line-by-line
                     comparison with the JPS
The full text of the case can be found on the HKEx website.


                     Summary
Parties              Company A – a corporation incorporated in the State of California proposing to list
                     on the Main Board
Issues               Whether the Exchange would consider the State of California an acceptable
                     jurisdiction under Chapter 19 of the Main Board Listing Rules
Listing Rules        1. Chapter 19 of the Main Board Listing Rules (Rules)
and                  2. Joint Policy Statement Regarding the Listing of Overseas Companies of 7 March
Regulations              2007 (JPS)
                     3. Listing Decisions HKEx-LD65-1; HKEx-LD65-2, HKEx-LD65-3,
                        HKEx-LD71-1, HKEx-LD80-1 and HKEx-LD84-1
                     4. Guidance Letter HKEx-GL12-09
Decision             The State of California is an acceptable jurisdiction of an issuer’s place of
                     incorporation under Chapter 19 of the Rules if potential Californian applicants
                     make certain revisions to their constitutive documents
                     Future Californian applicants may follow the streamlined procedures set out in
                     Guidance Letter HKEx-GL12-09 and need not complete a detailed line-by-line
                     comparison with the JPS
The full text of the case can be found on the HKEx website.

NOTeS TO iSSueRS aND MaRKeT PRacTiTiONeRS
For any questions relating to the Listing Decisions please feel free to contact the Listing Division.




38     Exchange • January 2011
  Compliance Decisions
The Stock Exchange published the following decisions in the fourth quarter of this year relating to compliance
matters.


Date                Action
28 October          Public censure of Mongolia Energy Corporation Limited for breaching Rules 2.13(2)
2010                and 13.09(1) (b) of the Listing Rules. The Company stated in its announcements of
                    14 August 2007, 21 August 2007 and 10 September 2007 that it had entered into
                    co-operation letters of intent with leading Chinese state-owned companies in certain
                    specified fields in the energy sector. The Listing Committee found the statements not
                    accurate in all material respects and misleading; and that the Company failed to
                    clarify the identity of one of the counterparties in the morning of 11 September 2007
                    when there was indication in the market that investors were confused about its identity.
                    Public censure of Mr Lo Lin Shing Simon and Ms Yvette Ong, Executive Directors,
                    for breaching Rule 3.08(f) and their Director’s Undertaking to comply with the
                    Listing Rules to their best of their ability and to use their best endeavours to procure
                    the Company’s compliance with the Listing Rules. Directions were also given for them
                    to undergo 24 hours of training on compliance and corporate governance matters
                    within six months.
24 November         Public censure of Regent Pacific Limited for breach of Rule 10.06(2)(a) of the Listing
2010                Rules for repurchasing its own shares at a price of five per cent or more above the
                    average closing market price for the five preceding trading days on 17 days in 2008.
                    Public censure of one current executive director, and public criticism of one former
                    executive director for breach of their respective Undertakings to use their best
                    endeavours to procure the Company’s compliance with the Listing Rules.
20 December         Public censure of China Wireless Technologies Limited (Company) for breach of
2010                Rule 13.09(1) of the Listing Rules for its delay in publishing a profit warning
                    announcement regarding deterioration in its business performance for the six
                    months ended 30 June 2008.
                    Public censure of Mr Guo Deying and Mr Jiang Chao, Executive Directors, for
                    breaching their Director’s Undertaking to use their best endeavours to procure the
                    Company’s compliance with the Listing Rules.
                    Director training requirements for the directors mentioned above, and the Company
                    directed to appoint a compliance adviser for two years.
30 December         Public criticism of Walker Group Holdings Limited (Company) for breach of Rule
2010                13.09(1) of the Listing Rules for its delay in publishing a profit warning announcement
                    regarding deterioration in its business and investment performance for the six months
                    ended 30 September 2008.
                    Public criticism of three executive directors and three independent non-executive
                    directors, for breaching their Undertaking to use best endeavours to procure the
                    Company’s compliance with the Listing Rules.




39     Exchange • January 2011
   Compliance Decisions



Mongolia Energy Corporation Limited was publicly censured for breaching Rules 2.13(2) and 13.09(1) (b) of the
Listing Rules.

The Company stated in its announcements of 14 August 2007, 21 August 2007 and 10 September 2007 that it
had entered into co-operation letters of intent with leading Chinese state-owned companies in certain specified
fields in the energy sector. The announcements contained the following statements (collectively the Statements):

(1) “ 中國航天技術發展總公司…, a leading Chinese state-owned company dealing with ferrous and non-ferrous
    metal and other resources and allocations in China” (Announcement 1);

(2) “ 國家電力投資總公司…, a leading Chinese state-owned company dealing with power related investments and
    allocations in China” (Announcement 2); and

(3) “ 中國石油總公司 …, a leading Chinese state-owned company dealing with petroleum and natural gas and
    allocations ” (Announcement 3)

The name of the counterparty in Announcement 3, “中國石油總公司 ” (transliterated as China Petroleum Group
Corporation) (Counterparty 3), resembled that of China National Petroleum Corporation, “ 中國石油天然氣集團
公司 ” (CNPC), the parent company of PetroChina Company Limited “中國石油天然氣股份有限公司 ” (PetroChina)
(stock code: 857). The Chinese stock name of PetroChina is “ 中國石油股份”. CNPC and PetroChina are commonly
referred to by the media as “中石油 ”.

Following the publication of Announcement 3, various articles appeared in newspapers, including online newspapers,
in Hong Kong and the PRC on 11 and 12 September 2007 suggesting that the Company had entered into a letter
of intent with “ 中石油 ” either in the headlines or in the main body of the articles. Between 10 and 11 September
2007, the Company’s share price rose by approximately 16.44% from HK$6.57 to HK$7.65 (with a maximum
increase of 24%); and the trading volume increased 13.79 times from 1,877,100 shares to 25,878,139 shares.

It was not until 9:30 am on 14 September 2007 that trading in the Company’s shares was suspended at the
Company’s request. On 18 September 2007, the Company published a clarification announcement which stated,
among other things, that “there is no reference under the Announcements that the Counterparties are associated
with other listed companies in Hong Kong or elsewhere”.

At the Listing (Disciplinary Review) Hearing, the Listing Committee endorsed the decision of the Listing Committee
at first instance, and concluded that the Statements were not accurate in all material respects and were misleading
in breach of Rule 2.13; and that the Company, in breach of Rule 13.09(1) (b), failed to clarify the identity of
Counterparty 3 in the morning of 11 September 2007 when there was indication in the market that investors
were confused about its identity.

Two Executive Directors of the Company, Mr Lo Lin Shing Simon and Ms Yvette Ong, were publicly censured for
breaches of Rule 3.08(f) for failing to apply such degree of skill, care and diligence as may reasonably be expected
of a person of their knowledge and experience and holding their office within the Company; and their Director’s
Undertaking to comply with the Listing Rules to their best of their ability and to use their best endeavours to
procure the Company’s compliance with the Listing Rules.

The Listing Committee further directed each of Mr Lo and Ms Ong to undergo training on compliance and corporate
governance matters for 24 hours within 6 months from 28 October 2010.




40     Exchange • January 2011
   Compliance Decisions



Regent Pacific Limited was publicly censured for breach of Rule 10.06(2)(a) (the Rule) of the Listing Rules for
repurchasing its own shares at a price of five per cent or more above the average closing market price for the five
preceding trading days on 17 days in 2008.

In 2008, the Company had two Executive Directors, Mr Jamie Alexander Gibson (Mr Gibson) and Ms Cheung
Mei Chu Clara (Ms Cheung). Mr Gibson, also the CEO of the Company, was responsible for placing the orders in
respect of all share repurchases in 2008 and ensuring that the share repurchases complied with the Listing Rules
(on a day to day and practical level).

In 2008, Mr Gibson was aware of the old Rule (in force before 31 March 2004) which imposed volume restriction
on share repurchase. However, he overlooked the revision of the Rule (on 31 March 2004) which imposed a
ceiling price for share repurchase. Neither he nor Ms Cheung was aware of the requirement of the Rule in 2008
notwithstanding:

(a) the Company Secretary’s notification to all directors in February 2004 (including Mr Gibson and Ms Cheung)
    of the revision to a number of the Listing Rules (including the Rule) effective from 31 March 2004; and

(b) that from 29 September 2008 onwards, albeit after an established, but incorrect share repurchase practice
    had been developed and applied (since January 2008), Mr Gibson and Ms Cheung received a schedule
    prepared by the Company Secretary with information including the price ceiling permitted by the Rule in respect
    of the next day share repurchase, and past breaches of the Rule in respect of share repurchases conducted
    since the beginning of 2008. The schedule was updated and circulated after market close on each day on
    which a share repurchase had taken place. The Company’s share repurchases on 3 days after 29 September
    2008 continued to breach the Rule. According to the Company and Mr Gibson, on the three days in question,
    Mr Gibson was away from Hong Kong and working remotely (from Africa) and consequently found it impossible
    to read spread sheet attachments on his blackberry.

Mr Gibson and Ms Cheung did not take adequate steps to procure the Company’s compliance with the Rule in
relation to the share repurchases on the 17 days in 2008.

The Listing Committee public censures Mr Gibson and publicly criticises Ms Cheung for their respective breaches
of Undertaking in failing to use his/her best endeavours to procure the Company’s compliance with Rule 10.06(2)(a).




China Wireless Technologies Limited (Company) was publicly censured for its breach of Rule 13.09(1) (Rule) of
the Listing Rules for its delay in publishing a profit warning announcement regarding deterioration in its business
performance for the six months ended 30 June 2008 (Interim Period).

Before the Interim Period, the Company had been profit-making. The Group recorded a profit of HK$124.6 million
for the six months ended 30 June 2007 and HK$167.5 million for the year ended 31 December 2007.

In April 2008, the Group’s turnover dropped sharply causing a substantial loss as reflected in its April management
accounts, turning the Group’s overall position from profit to loss. The drop in sales resulted largely from decrease
in orders of the Group’s Code Division Multiple Access technology (CDMA) products from China Unicom Limited
(China Unicom), a major customer of the Group.




41     Exchange • January 2011
   Compliance Decisions



The Company became aware in or about April 2008 of a proposed restructuring in the PRC telecommunications
industry (Telecom Reform), which included disposal of China Unicom’s CDMA business to China Telecom
Corporation Limited (China Telecom). The executive directors believed it was possible that sales would pick up
in May or June 2008 to improve the overall results for the Interim Period if and when China Telecom started to
order CDMA products from the Group.

By 26 May 2008, the executive directors became aware of a substantial loss of approximately HK$18 million in April
2008 from the April management accounts. On 2 June 2008, China Unicom announced its agreement with China
Telecom for the proposed disposal of its CDMA business to China Telecom, giving a timeframe for the proposed
transaction that extended months beyond the end of the Interim Period. By 27 June 2008, the executive directors
became aware from the May 2008 management accounts of the continuing substantial loss of HK$81.7 million.

At a Board meeting on 15 July 2008, the Board reviewed Group’s May 2008 management accounts, and resolved
to publish a profit warning announcement as soon as possible. However, the Company did not publish its profit
warning announcement until 30 July 2008.

As a consequence of a settlement, the Company does not contest the Division’s assertion of its breach of the Rule,
and both Mr Guo Deying and Mr Jiang Chao do not contest the Division’s assertion of their respective breaches
of Undertaking to use best endeavours to procure the Company’s Listing Rule compliance.

The Listing Committee censures (1) the Company for its breach of the Rule, and (2) Mr Guo and Mr Jiang for their
respective breaches of Undertaking. Further, the Listing Committee directs the Company to appoint a compliance
adviser for two years, and Mr Guo and Mr Jiang to undergo training on Listing Rule compliance and continuing
obligations (including disclosure obligations under the Rule) for 24 hours within 90 days from 20 December 2010.




Walker Group Holdings Limited (Company) was publicly criticized for its breach of Rule 13.09(1) (Rule) of the
Exchange Listing Rules for its delay in publishing a profit warning announcement regarding significant deterioration
in its business and investment performance for the six months ended 30 September 2008 (Interim Period).

Before the Interim Period, the Company had been profit-making. The Group recorded a profit of $60 million for
the six months ended 30 September 2007 and $94.7 million for the year ended 31 March 2008.

In April 2008, the Group’s monthly management accounts recorded a loss caused mainly by deterioration in the
Group’s core business, and the loss continued to increase during the Interim Period. The executive directors,
who were aware of such deterioration and loss, expected however that sales would pick up during the Beijing
Olympics in August 2008 to improve the overall results for the Interim Period.

By 22 September 2008, the executive directors became aware from the Group’s management accounts for the
five months ended 31 August 2008 that the Group had an accumulated loss from its business operations of $32.5
million, and concluded that it was unlikely the Group’s results for the Interim Period would improve substantially.
The executive directors also noted on 22 September 2008 that the Group’s investment portfolio had suffered a
loss of $15 million.




42     Exchange • January 2011
  Compliance Decisions



At the Board meeting on 2 October 2008, all directors (executive and independent non-executive directors) noted
the Group’s significant deterioration in business and investment performance but did not raise or discuss whether
an announcement was required to be published to inform the market of the significant deterioration in the Group’s
performance under the Rule.

On 8 October 2008, (1) the Group’s sales figures for September 2008 were available to the executive directors,
which were lower than as had been expected by the executive directors; and (2) investment information available to
the executive directors showed that the Group’s investment portfolio recorded a loss of $19 million. By 14 October
2008, the executive directors envisaged that the Company “might” need to issue a profit warning announcement.

On 24 October 2008, following review of six-month management accounts, the executive directors decided to
publish a profit warning. However, the Company did not issue its profit warning announcement until 31 October
2008 after trading hours.

The Listing Committee concluded that the Company’s disclosure obligation arose on 22 September 2008, and
such obligation was only discharged on 31 October 2008, in breach of the Rule. Executive directors Ms Chan
Mei Sheung (Ms Chan), Mr Kiu Wai Ming (Mr Kiu) and Mr Chu Yin Man (Mr Chu) therefore failed to use their best
endeavours to procure the Company’s Rule compliance as its disclosure of information had not been made
“without delay” or “as soon as reasonably practicable”. Further, on 2 October 2008, independent non-executive
directors Mr Sze Tsai Ping Michael (Mr Sze), Dr Fan Yiu Kwan (Dr Fan) and Mr Tsang Link Carl Brian (Mr Tsang)
became aware of the Group’s significant deterioration in business and investment performance but did not raise
or discuss whether an announcement was required under the Rule, thus also failed to use their best endeavours
to procure the Company’s Rule compliance.

The Listing Committee criticizes (1) the Company for its breach of the Rule, and (2) Ms Chan, Mr Kiu, Mr Chu, Mr
Sze, Dr Fan and Mr Tsang for their respective breaches of Undertaking.




The full text of the statements can be found on the HKEx website.




43     Exchange • January 2011
   HKEx Market
   Surveillance Highlights



Under the Memorandum of Understanding (MOU) between the Securities and Futures Commission (SFC) and HKEx
on matters relating to market surveillance, HKEx refers suspected violations of Hong Kong’s ordinances to the
SFC from time to time. The MOU also established arrangements for HKEx to refer to the SFC suspected violations
of the codes, rules and regulations made by the SFC relating to HKEx’s securities and derivatives markets. The
purpose of the referrals is to bring the situations to the SFC’s attention for possible criminal prosecution and/or
disciplinary action against licensed persons under its jurisdiction in respect of market misconduct matters.

The latest referral figures are in the table below.

Exceptional Price/Market Movement Cases Referred to the SFC
                                                                   Three Months to                                   Three Months to
                                                                  30 September 2010                                 31 December 2010
                                                              cases*         ePs involved**                     cases*         ePs involved**
Securities Market:
Pre-opening Sessions                                                  2                         1                       –                         –
Trading Sessions                                                       –                         –                    16                          1
Total                                                                 2                         1                     16                          1

* A case is defined as an instance of exceptional order/trade activity which has been identified and investigated by HKEx and resulted in HKEx
  referring the details of the investigation analysis and related documentation to the SFC for its further review and consideration in relation to the
  SFC’s enforcement responsibilities.
** EPs – Abbreviation for Exchange Participants.




44       Exchange • January 2011
  Status Report on New Product and
  Market Development Initiatives

The following initiatives are subject to market support and regulatory approval so they may not be implemented.
HKEx will announce further details of these initiatives as they progress.


initiative                           Status on 15 October 2010                Status on 15 January 2011


1
       consultation Paper on         The consultation paper was               Responses to the consultation have
       Proposed changes to           published on 10 September 2010           been posted on the HKEx website.
       Requirements for Qualified    and the deadline for replies is          The consultation conclusions were
       Property acquisitions         12 November 2010.                        published on 21 January 2011.
       and Formation of
       Joint Ventures




2
       consultation Paper on         The consultation paper was               Responses to the consultation have
       Proposed changes to           published on 10 September 2010           been posted on the HKEx website.
       the Minimum Number of         and the deadline for replies is          The consultation conclusions were
       Shareholders for the          12 November 2010.                        published on 21 January 2011.
       Market capitalisation/
       Revenue Test




3
       Possible changes to the       HKEx is considering changes              The listing of Brazil’s Vale SA is a
       requirements for overseas     to its requirements for overseas         pilot which may point to a possible
       companies seeking             companies seeking secondary              model for an increased-disclosure
       secondary listings in         listings in Hong Kong to differentiate   approach to the listing of overseas
       Hong Kong                     the requirements for primary and         companies in appropriate cases.
                                     secondary listings as they are
                                     currently similar.



4      consultation paper on         HKEx expects to consult the market       The consultation paper was
       Review of the code on         in the fourth quarter of 2010 on         published on 17 December 2010
       corporate Governance          possible changes to the Code of          and the deadline for responses is
       Practices and associated      Corporate Governance Practices in        18 March 2011. HKEx will analyse
       Listing Rules                 the Listing Rules.                       respondents’ comments and
                                                                              publish its consultation conclusions
                                                                              in due course.



5
       consultation Paper on         HKEx expects to consult the market       The consultation paper was
       Proposed changes to           in the fourth quarter of 2010 on         published on 17 December 2010
       Requirements for the          possible changes to streamline           and the deadline for responses
       Listing of Debt issues for    and simplify the Listing Rules           is 18 February 2011. HKEx will
       Professional investors Only   regarding debt securities offered        analyse respondents’ comments
                                     to professional investors only.          and publish its consultation
                                                                              conclusions in due course.


45     Exchange • January 2011
  Status Report on New Product and Market Development Initiatives


initiative                             Status on 15 October 2010                Status on 15 January 2011


6
       consultation on                 The timetable is subject to resolution   The consultation conclusions
       acceptance of                   of issues by the Securities and          were published on 10 December
       Mainland accounting and         Futures Commission (SFC) on the          2010. The related Listing Rule
       auditing Standards and          implementation of the proposals.         amendments became effective on
       Mainland audit Firms for                                                 15 December 2010.
       Mainland incorporated
       companies Listed in
       Hong Kong



7
       consultation on the             HKEx issued interim guidance to          The Exchange has commenced soft
       placing of shares at            the market on 13 October 2010            consultations with the market on
       initial public offering (iPO)   on pre-IPO investments and has           the policy matter and will consider
       and pre-iPO investments         commenced soft consultations with        whether to issue a consultation
                                       the market on the policy matter.         paper.




8
       Reporting on                    HKEx has commenced soft                  HKEx will engage external
       environmental and               consultations with listed issuers        consultants to organise workshops
       sustainability issues           and professional associations on         for issuers in 2011 on how to
                                       the matter. HKEx is considering          do environmental, social and
                                       whether to, and if so, how to            gover nance reporting. The
                                       encourage and educate listed             workshops will be based on a draft
                                       companies to adopt meaningful            proposed Guide to Environmental,
                                       reporting on environmental and           Social and Governance Reporting.
                                       sustainability issues.



9
       Joint consultation Paper        Not included in this issue.              The joint consultation paper was
       on Proposed changes to                                                   published on 3 December 2010
       Property Valuation                                                       and the deadline for responses
       Requirements                                                             is 11 February 2011. HKEx will
                                                                                analyse respondents’ comments
                                                                                and publish its consultation
                                                                                conclusions in due course.



10
       update on SPRiNTS,              HKEx is developing a web-based           User acceptance testing of
       the Structured Products         SPRINTS that allows structured           SPRINTS is currently underway
       integrated Transaction          product issuers to submit term sheet     and is expected to be completed
       System                          data electronically to the Stock         around the end of January. Details
                                       Exchange in a standardised format        of the user training and rollout
                                       (Extensible Markup Language, or          arrangement will be provided to
                                       XML).                                    issuers in due course, and HKEx
                                                                                will continue to work closely with
                                                                                issuers to achieve successful
                                                                                implementation of the new system
                                                                                in the second quarter of 2011.




46     Exchange • January 2011
  Status Report on New Product and Market Development Initiatives


initiative                           Status on 15 October 2010               Status on 15 January 2011


11
       consultation Paper on         Not included in this issue.             The consultation paper was
       ex-entitlement Trading                                                published on 17 December 2010
       and Shareholder approval                                              and the deadline for responses
                                                                             is 28 February 2011. HKEx will
                                                                             analyse respondents’ comments
                                                                             and publish its consultation
                                                                             conclusions in due course.



12
       Study on after-hours          HKEx is doing a study on the            HKEx has been conducting a study
       Derivatives Trading           trading of futures and options after    and soft consultation with market
                                     their current market close.             participants. Initial feedback was
                                                                             positive. After-hours derivatives
                                                                             t r a d i n g w o u l d h e l p i m p ro v e
                                                                             execution efficiency and trading
                                                                             arrangements. HKEx plans to
                                                                             publish a consultation paper to
                                                                             seek market views on the proposal
                                                                             in the middle of the year.



13
       exploration of New            Volatility index-related Products
       Financial Products/           HKEx and an index company have          HKEx and an index company
       Services and Review of        solicited comments from market          have completed the solicitation of
       existing Products/            participants regarding the volatility   comments from market participants
       Services                      index calculation methodology and       regarding the adaptations of
                                     are working on adaptations relevant     volatility index methodology
                                     to the Hong Kong market.                required for the Hong Kong market.
                                                                             Meanwhile, HKEx is exploring with
                                                                             market participants the possibility
                                                                             of introducing a futures contract on
                                                                             the volatility index and its potential
                                                                             design.

                                     Dividend Point index Futures
                                     HKEx plans to introduce HSI             Trading of HSI Dividend Point
                                     Dividend Point Index futures and        Index futures and HSCEI Dividend
                                     HSCEI Dividend Point Index futures      Point Index futures commenced
                                     on 1 November 2010, subject to          in the derivatives market on
                                     regulatory approval.                    1 November 2010.



14
       T+2 Finality for              The consultation conclusions were       HKEx has issued a detailed
       Stock exchange Trades         published on 13 August 2010.            description of the CCASS
       and Settlement instructions   HKEx aims to implement a T+2            operational workflow under T+2
                                     finality arrangement for CCASS          Finality to Designated Banks
                                     money settlement by the third           for their preparation for system
                                     quarter of 2011.                        enhancements. Implementation is
                                                                             tentatively scheduled for July 2011,
                                                                             subject to regulatory approval.




47     Exchange • January 2011
  Status Report on New Product and Market Development Initiatives


initiative                        Status on 15 October 2010                 Status on 15 January 2011


15
       consultation on a          The consultation conclusions were         The Scripless Securities Market
       Scripless Securities       published on 21 September 2010.           Working Group continues
       Market                     The SFC will consult the public in        discussions on the details of the
                                  early 2011 on a new subsidiary            proposed operational model.
                                  legislation that will set out in more     The discussions will facilitate the
                                  detail how the scripless environment      drafting of the new subsidiary
                                  and those that play a key role in that    legislations under the Securities
                                  environment will be regulated. A          and Futures Ordinance by the SFC
                                  scripless regime will be implemented      for consultation in the first half of
                                  in phases following the necessary         2011.
                                  legislative changes and when the
                                  market infrastructure, key operators
                                  and market participants are ready.
                                  The first phase of the scripless regime
                                  is expected to be implemented in
                                  late 2013.



16
       Derivatives Market         The project is progressing as             Phase 2, which upgrades the design
       System capacity and        planned. In Phase 1, launched             of DCASS software, will be rolled out
       Technology upgrade         on 18 October 2010, the order             in mid-2011. Circulars outlining the
                                  capacity of HKATS was increased to        changes will be issued to Participants
                                  21,000 order book changes/second          shortly so they will have sufficient
                                  (OBC/S) from the original of 8,100        details and lead time for their
                                  OBC/S. The design of the DCASS            preparations. There will be testing
                                  software will be enhanced in Phase        sessions later for those Participants
                                  2 and rolled out in mid-2011.             using the DCASS OAPI interface.



17
       Securities Market System   This project aims for 10-fold             HKEx expects the upgrades to be
       capacity and Technology    improvement over the existing             completed by the end of 2011.
       upgrade (also known as     securities trading system capacity        Technical specifications have
       aMS/3.8 and MDS/3.8)       to achieve an initial capacity of         been posted on the HKEx website
                                  30,000 orders per second (scalable        and HKEx arranged seminars in
                                  to 150,000 orders per second if           November 2010 for Participants’
                                  necessary), as well as an average         IT development staff and system
                                  order processing latency of 9             vendors.
                                  milliseconds. HKEx published its
                                  Information Paper on AMS/3.8 &
                                  MDS/3.8 System Upgrades on 8
                                  October 2010. HKEx expects the
                                  upgrades to be completed by the
                                  end of 2011.



18
       Free Prices Website        Not included in this issue.               HKEx has reviewed the Pilot
       Service to be expanded                                               Programme for the Free Prices
       and repackaged to Basic                                              Website Service and decided to
       Market Prices Service                                                open up the service beginning 1 April
                                                                            2011 in the form of standard service
                                                                            package offered to all its licensed
                                                                            real-time data information vendors.


48     Exchange • January 2011
   Status Report on New Product and Market Development Initiatives


initiative                                        Status on 15 October 2010                      Status on 15 January 2011


19
          introduction of PRS                     Not included in this issue.                    HKEx plans to roll out the new
          Plus – a new faster                                                                    and faster real-time datafeed
          derivatives market                                                                     in the second quarter of 2011.
          datafeed                                                                               PRS Plus will be offered as an
                                                                                                 option alongside the current PRS
                                                                                                 feed. The datafeeds’ content and
                                                                                                 message format will be identical
                                                                                                 except that PRS Plus will have a
                                                                                                 shorter price update interval. HKEx
                                                                                                 plans to shorten the price update
                                                                                                 interval in HKATS from 1 second
                                                                                                 to 0.5 second in the first quarter
                                                                                                 of 2011, which will effect the same
                                                                                                 change to the current PRS feed.
                                                                                                 The price update interval of PRS
                                                                                                 Plus at launch will be 0.1 second,
                                                                                                 one-fifth that of the PRS feed.



20
          establishment of                        Not included in this issue.                    HKEx has decided to establish a
          clearing House for                                                                     clearing house by the end of 2012
          Over-the-counter (OTc)                                                                 for derivatives traded in Hong
          Derivatives Traded in                                                                  Kong’s OTC market. Interest rate
          Hong Kong                                                                              derivatives and non-deliverable
                                                                                                 forwards will be the initial products
                                                                                                 handled. HKEx is considering
                                                                                                 different operating models and
                                                                                                 shareholder structures for the
                                                                                                 clearing house, which will be run
                                                                                                 independently of HKEx’s other
                                                                                                 clearing houses.


Notes:
AMS/3, the Third Generation Automatic Order Matching and Execution System, is the trading system for the securities market. CCASS/3, the
Latest Generation Central Clearing and Settlement System, and the Market Data System, or MDS, are the other major market systems supporting
the securities market. HKATS, the Hong Kong Futures Automated Trading System, is the trading system for the derivatives market. DCASS, the
Derivatives Clearing and Settlement System, and PRS, the Price Reporting System, are the other major market systems for the derivatives market.

Information is added after the date at the top of the column from time to time.




49       Exchange • January 2011
                                                        Designed by Sedgwick Richardson




Hong Kong Exchanges and Clearing Limited
12/F, One International Finance Centre,
1 Harbour View Street, Central, Hong Kong
Tel +852 2522 1122             Fax +852 2295 3106
Website www.hkex.com.hk        Email info@hkex.com.hk

				
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