Operator of local bourse will seek to refine listing regime, expand connect scheme and introduce new products

The key focuses in 2017 for Hong Kong Exchanges and Clearing Limited (HKEX) will be improvements to the listing regime, an expansion of the connect scheme, new products, and enhanced platforms, according to Charles Li, chief executive of HKEX, at its annual media luncheon on Thursday.

Li said that the bourse operator in recent years has been expanding its asset class from cash equity to a broader range including commodities and fixed income as well as currencies, creating mutual market access channels, enhancing market microstructure and efficiency, and continuing to build and upgrade systems and platforms.

Especially this year, according to Li, they will endeavor to work on setting up a new board to strengthen the competiveness of the Hong Kong financial market and continue consulting with the market including on a dual shareholding structure which has been debated for two years. He added that "the new board consultation should happen and include everything", while no timetable for the consultation paper has been confirmed.

Regarding the connect program, the second stock connect between Shenzhen and Hong Kong stock markets was launched on Dec 5 last year and the market has been expecting the next extensions.

Li elaborated that they are currently working with mainland counterparts to include exchange-traded funds under the scheme. Moreover, the next step would also be to connect primary new share listings and bonds, as well as commodities in the mutual market.

"The new era now is that mainland investors are seeking international asset diversifications." He said that HKEX is planning to introduce more choice in products this year, including mainland-related equity derivatives and weekly index options tied to the Hang Seng Index and H-shares index, gold products in both Hong Kong and London and physically settled gold futures contracts denominated in USD and CNH in Hong Kong, index-linked and cash-settled iron futures, as well as RMB currency options, a USD/CNH contract, mainland Ministry of Finance T-bond futures, and more. They are also planning to expand over the counter Clearing's services in 2017.

On market structure plans, after HKEX introduced the Closing Auction Session (CAS) and Volatility Control Mechanism for securities on July 25 and Aug 22 last year,respectively, they are now considering allowing regulated short-selling orders during the CAS and inclusion of more stocks in the CAS, as well as extending the trading hours and expanding the products in the After Hours Futures Trading (AHFT) session as volume of AHFT continues to grow.

Market analysts surveyed by China Daily have expressed their concerns about the uncertainties in the global economy this year including the continuing impact of Britain's departure from the Europe Union (Brexit) and Donald Trump's presidency.

While according to Li, Brexit won't have a large influence on the group's business, and the group's London Metal Exchange enjoys a worldwide market rather than just the British one, he said the group had already changed to record business in US dollars.

tingduan@chinadailyhk.com

The external view of Hong Kong Exchanges and Clearing Ltd (HKEX). In an effort to attract more technology and new-economy firms to list, HKEX will endeavor to work on setting up a new board to strengthen the competiveness of the city's financial market. Parker Zheng / China Daily

(HK Edition 01/20/2017 page9)