Hong Kong Exchanges and Clearing Limited (HKEx) will reduce minimum trading spreads for shares trading above $30 and change trading parameters of AMS/3, the Third Generation Automatic Order Matching and Execution System, on Monday, 4 July this year. Spreads for shares priced at or below $30 will remain the same.
The date was set after the successful completion of market rehearsals during the weekends of 18 and 25 June. The Securities and Futures Commission has approved the rule changes required for the reductions. As of 27 June, there were 29 shares priced above $30 (see Attachment 2).
HKEx published a consultation paper on the reduction of minimum trading spreads on 6 August last year. The proposal to reduce minimum spreads was aimed at increasing the competitiveness of HKEx's markets, improving market efficiency and enhancing market liquidity. The proposal was also aimed at making spreads more uniform. The consultation results were considered by the HKEx Board in December last year and the Board decided that minimum trading spreads for shares trading above $30 would be reduced.
To complement the spread reductions, certain AMS/3 trading parameters have been modified (see Attachment 1). Similar to the current arrangements, all securities other than stock options, debt securities and securities authorised to be traded in accordance with the minimum trading spreads for debt securities will have the same minimum trading spreads as shares.
Detailed information on the consultation paper, consultation conclusions and respondents' submissions, as well as the questionnaire on proposed changes in trading parameters and other settings, is available on the HKEx website at http://www.hkex.com.hk.
Attachment 1
Reduction of Minimum Spreads for Shares
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