Guide to Becoming an Exchange Participant

Any broker-dealer that intends to operate a brokerage business for products available on HKEX, using the trading facilities of The Stock Exchange of Hong Kong Limited (Stock Exchange) and/or Hong Kong Futures Exchange Limited (Futures Exchange), must be admitted and registered as an Exchange Participant of that Exchange.

HKEX Participantship Structure_EN

HKEX Participantship Structure

Types of Exchange Participantship

Stock Exchange Participants are entitled to deal in securities products such as equity securities, equity warrants, Exchange Traded Products, derivative warrants and Callable Bull/Bear Contracts, etc.
Futures Exchange Participants may deal in all futures and options, with the exception of stock options.
Brokers that intend to offer stock options brokerage services have to apply to the Stock Exchange to become Stock Options Exchange Participants. Stock Exchange has two types of options participantship: Options Trading Exchange Participant (OTEP) and Options Broker Exchange Participant (OBEP). OTEP can directly trade stock options through HKATS, the automated trading system operated by Hong Kong Futures Exchange Limited, while OBEP can only trade stock options through an OTEP.

Trading Rights

An Exchange Participant must also hold at least one Trading Right in the Stock Exchange or Futures Exchange. All new Trading Rights are issued by the respective exchanges and are non-transferable.

Further information on becoming an Exchange Participant and relevant application forms are available in the following sections. The completed application forms should be returned to HKEX Participant Services. For enquiries, please contact us by:

Address : Participant Services, Cash Trading Department
Hong Kong Exchanges and Clearing Limited
6/F, Two Exchange Square
8 Connaught Place, Central
Hong Kong

Email : trd@hkex.com.hk

Phone : +852 2840-3626

Updated 09 Mar 2018

Application Process

	Stock Exchange Participantship (SEHK)	Stock Options Exchange Participantship (SEHK)	Futures Exchange Participantship (HKFE)
Step 0. Prerequisite/ Admission Criteria for Participantship Refer to admission criteria of respective participantship:	Trading Clearing	Trading Clearing	Trading Clearing
Step 1. Apply to HKEX Submit completed application forms to HKEX, together with supporting documents, applicable deposits and payment for Trading Right. Refer to relevant forms and explanatory notes:
Step 2a. Trading Infrastructure Setup i. Consider the type of market access; ii. Order hardware, set up connections and run system tests for the setup of trading front-ends. Refer to overview of infrastructure and access methods:	Overview Testing Services for Broker Supplied System	Overview Forms
Step 2b. Clearing Arrangement Obtain clearing facilities by either: i. Becoming a Clearing Participant of the respective clearing house Submit application documents for Clearing Participantship Setup clearing system: Open designated bank accounts Install relevant clearing system terminals Set up delegated user accounts for system access Provide Operations and Risk Control Plan for review Refer to further details of becoming a Clearing Participant of the respective clearing house:
Operational Setup	Operational Setup	Operational Setup
OR ii. Maintaining an approved clearing arrangement with a General Clearing Participant Refer to further details of third party clearing by General Clearing Participants:	Third Party Clearing by HKSCC General Clearing Participants	Third Party Clearing by HKCC/ SEOCH General Clearing Participants
List of HKSCC General Clearing Participants	List of SEOCH General Clearing Participants	List of HKCC General Clearing Participants

Stock Exchange Participantship

(SEHK)

Stock Options Exchange Participantship

(SEHK)

Futures Exchange Participantship

(HKFE)

Step 0. Prerequisite/ Admission Criteria for Participantship

Refer to admission criteria of respective participantship:

Trading

Clearing

Trading

Clearing

Trading

Clearing

Step 1. Apply to HKEX

Submit completed application forms to HKEX, together with supporting documents, applicable deposits and payment for Trading Right.

Refer to relevant forms and explanatory notes:

Step 2a. Trading Infrastructure Setup

i. Consider the type of market access;

ii. Order hardware, set up connections and run system tests for the setup of trading front-ends.

Refer to overview of infrastructure and access methods:

Overview

Testing Services for Broker Supplied System

Overview

Forms

Step 2b. Clearing Arrangement

Obtain clearing facilities by either:

i. Becoming a Clearing Participant of the respective clearing house

Submit application documents for Clearing Participantship
Setup clearing system:
- Open designated bank accounts
- Install relevant clearing system terminals
- Set up delegated user accounts for system access
Provide Operations and Risk Control Plan for review

Refer to further details of becoming a Clearing Participant of the respective clearing house:

Operational Setup

ii. Maintaining an approved clearing arrangement with a General Clearing Participant

Refer to further details of third party clearing by General Clearing Participants:

Third Party Clearing by HKSCC General Clearing Participants

Third Party Clearing by HKCC/ SEOCH General Clearing Participants

List of HKSCC General Clearing Participants

List of SEOCH General Clearing Participants

List of HKCC General Clearing Participants

Updated 09 Mar 2018

Costs Involved

In addition to basic business costs, an Exchange Participant will incur one-time setup costs, deposits, as well as periodic and/ or variable charges. The costs specified herein cover only the major items and are not meant to be exhaustive.

	Stock Exchange Participantship (SEHK)	Stock Options Exchange Participantship (SEHK)	Futures Exchange Participantship (HKFE)
Exchange Costs/ Deposits	One-time: Stock Exchange Trading Right Application Fee	N/A	One-time: Futures Exchange Trading Right Application Fee
	Periodic/ Variable: Stock Exchange Trading Right Monthly Subscription Fee (in respect of each Stock Exchange Trading Right held)		Periodic/ Variable: Futures Exchange Participant Annual Subscription Fee
	Deposits: Stamp Duty Deposit* Fidelity Fund Deposit (in respect of each Stock Exchange Trading Right held)* Compensation Fund Deposit (in respect of each Stock Exchange Trading Right held)*		N/A
	Details:		Details:
System Access Costs	One-time: Orion Central Gateway (OCG) Session Administration Fee Circuit Installation Charge - EP pays the circuit installation charge directly to Accredited Vendors Additional Throttle(s) for OCG (for business expansion)	One-time: Hardware HKATS Online Workstation Switch and cable Software Cost Installation Charges
	Periodic/ Variable: Monthly Session Fee for OCG Monthly charge for circuit rental - EP pays the circuit rental directly to Accredited Vendors Monthly Fee for Stock Exchange Trading Right assigned to an OCG session Monthly Fee for Standard Throttle Rate arising from trading right entitlement assigned to an OCG session Monthly Fee for Additional Throttle	Periodic/ Variable: Monthly Monthly Data Line Charges (including routers) Monthly HKATS Online or OAPI Sub-license Fee Annually Annual Maintenance Fee
	Details:	Details:
Clearing/ Settlement Costs/ Deposits	One-time: HKSCC Admission Fee (in respect of each Stock Exchange Trading Right held)* Circuit Installation Charge - CP pays directly to Accredited Vendors	One-time: DCASS Connectivity Test Circuit Installation Charge (if applicable) - CP pays directly to Accredited Vendors
	Periodic/ Variable: Monthly charge for circuit rental - CP pays directly to Accredited Vendors	Periodic/ Variable: Monthly Sub-license fee for (i) DCASS workstation applications software or (ii) OAPI via the Participant’s remote network gateway Monthly Sub-license fee for (i) DCASS workstation applications software or (ii) OAPI via the central gateway Monthly charge for circuit rental (if applicable) - CP pays directly to Accredited Vendors
	Deposits: HKSCC Basic Guarantee Fund Contribution (Cash)*	Deposits: HKCC Participant Deposit/ SEOCH Initial Reserve Fund Contribution*
	Details:	Details:	Details:

*HKEX may refund the deposit/fee according to respective rules and provisions upon resignation/termination of Participantship and/or relinquishment of Trading Right(s), where applicable.

Updated 07 May 2019