Trading Mechanism

Orion Trading Platform – Securities Market (OTP-C)

The trading system of the Exchange is an order-driven system.

During the Pre-opening Session and the Closing Auction Session, the system accepts at-auction and at-auction limit orders only.

During the Continuous Trading Session, the system accepts limit, enhanced limit and special limit orders only, with an option for an "All-or-Nothing Qualifier" that confines the order to be either executed immediately in full or rejected, without being written into the central order book.

For details of the trading system and associated infrastructure, please visit the Infrastructure section.

Trading Sessions

For all trading sessions, the maximum order size for automatch stocks is 3,000 board lots. The maximum number of orders in each price queue is 40,000 while the maximum number of outstanding orders per broker ID has been removed.

Pre-opening Session

Orders are accumulated over a certain period of time and matched within a pre-defined random matching period. Orders are matched in order type, price and time priority (at-auction orders carry a higher matching priority), at the final Indicative Equilibrium Price ("IEP"). Please click here for FAQ in relation to Pre-opening Session.

For details of the POS Enhancements, please refer to the POS enhancements initiative and POS information book.

Continuous Trading Session

Orders are continuously executed in strict price and time priority. An order entered into the system at an earlier time must be executed in full before an order at the same price entered at a later time is executed.

Closing Auction Session

The Closing Auction Session (CAS) is applicable to selected securities and consists of four periods: the Reference Price fixing period, order input period, no-cancellation period, and random closing period.

During the Reference Price fixing period, a Reference Price, which sets the allowable upper and lower price limits of the closing auction session (±5 per cent from the Reference Price), is calculated for each security that will have a Closing Auction Session.

During the order input period, at-auction orders and at-auction limit orders within the ±5 per cent price limit can be entered, amended or cancelled.

During the no-cancellation period, prices of new at-auction limit orders must be between the lowest ask and highest bid of the order book, and no orders can be amended or cancelled.

During the random closing period, the order rules from the no-cancellation period apply and the market closes randomly within two minutes. After the random closing period, orders for all CAS securities are matched at the final IEP. In cases where final IEP cannot be established during the CAS, the Reference Price will be treated as the final IEP for order matching and will become the closing price of the CAS security. Order matching is based on order type, price and then time priority (at-auction orders carry a higher matching priority).

For further detail of CAS, please refer to the CAS information book and infographic.

Order types

OTP-C currently supports the following order types for automatching:

Pre-opening Session and Closing Auction Session

The OTP-C only accepts at-auction and at-auction limit orders during the Pre-opening Session and Closing Auction Session.

For Pre-opening Session, the order price input into the OTP-C cannot deviate 9 times or more from the previous closing price or the nominal price (as the case may be), if available.

For Closing Auction Session, the order price input into the OTP-C is subject to the two stages price limit. Stage 1 price limit: is applicable to the Order Input Period and is set at ±5 per cent from the Reference Price. Stage 2 price limit is applicable to the No Cancellation Period and Random Closing Period and is set at the highest bid and the lowest ask of the order book at the end of the Order Input Period.

At-auction Order

An at-auction order is an order with no specified price and is entered into the OTP-C for execution at the final Indicative Equilibrium Price (IEP). It enjoys a higher order matching priority than an at-auction limit order and will be matched in time priority at the final IEP.

Any outstanding at-auction orders after the end of the Pre-opening Session will be cancelled before the commencement of the Continuous Trading Session.
At-auction Limit Order

An at-auction limit order is an order with a specified price. An at-auction limit order with a specified price at or more competitive than the final IEP (in case of buying, the specified price is equal to or higher than the final IEP, or in case of selling, the specified price is equal to or lower than the final IEP) may be matched at the final IEP subject to availability of eligible matching order on the opposite side. An at-auction limit order will be matched in price and time priority at the final IEP. No at-auction limit order will be matched at a price worse than the final IEP. If an IEP cannot be determined during the Closing Auction Session, the Reference Price will serve as the price for matching. The matching of applicable at-auction orders and at-auction limit orders will occur at the Reference Price instead and the matching mechanism will be same as matching at the IEP.

Any outstanding at-auction limit orders at the end of the Pre-opening Session will be carried forward to the Continuous Trading Session and treated as limit orders provided that the specified price of that at-auction limit order does not deviate 9 times or more from the nominal price. Such orders will be put in the price queue of the input price.

Continuous Trading Session

The OTP-C only accepts limit, enhanced limit and special limit orders (with an option for an "All-or-Nothing Qualifier" that confines the order to be either executed immediately in full or rejected without being written into the central order book) during Continuous Trading Session as long as the order price input into the OTP-C (i) does not deviate 9 times or more from the nominal price, if available, and (ii) follows the quotation rules unless the restriction is waived. At the end of the continuous trading session, all outstanding orders of securities applicable for trading in the closing auction session will be automatically carried forward to the closing auction session provided that the price of buy limit orders is not higher than the allowable upper price limit or the price of sell limit orders is not lower than the allowable lower price limit prescribed for closing auction session. All outstanding orders carried forward from the continuous trading session to the closing auction session will be treated as at-auction limit orders.

Limit Order

A limit order will allow matching only at the specified price. The sell order input price cannot be made at a price below the best bid price, if available whereas the buy order input price cannot be made at a price above the best ask price, if available.

Any outstanding limit order will be put in the price queue of the input price.
Enhanced Limit Order

An enhanced limit order will allow matching of up to 10 price queues (i.e. the best price queue and up to the 10th queue at 9 spreads away) at a time provided that the traded price is not worse than the input price. The sell order input price cannot be made at a price of 10 spreads (or more) below the current bid price whereas the buy order input price cannot be made at a price of 10 spreads (or more) above the current ask price.

Any outstanding enhanced limit order will be treated as a limit order and put in the price queue of the input price.

Example 1 : Enhanced Limit Order (ELO) - fully matched

Table 1 (a) : Original Position

Price	Volume (‘000)	Price	Volume (‘000)
Bid		Ask
$30.00	100	$30.05	80
$29.95	90	$30.10	70
$29.90	80	$30.15	160
$29.85	60	$30.20	50
$29.80	180	$30.25	60
$29.75	34	$30.30	50
$29.70	100	$30.35	40
$29.65	150	$30.40	45
$29.60	18	$30.45	25
$29.55	36	$30.50	70
$29.50	200	$30.55	80
$29.45	150	$30.60	55
$29.40	50	$30.65	50
$29.35	20	$30.70	25

Enhanced Limit Order: to buy 650,000@ $30.50

Table 1 (b) : After Execution

Price	Volume (‘000)	Price	Volume (‘000)
Bid		Ask
$30.00	100	$30.55	80
$29.95	90	$30.60	55
$29.90	80	$30.65	50
$29.85	60	$30.70	25
$29.80	180	$30.75	20
$29.75	34	$30.80	70
$29.70	100	$30.85	20
$29.65	150	$30.90	10
$29.60	18	$30.95	70
$29.55	36	$31.00	15
$29.50	200	$31.05	25
$29.45	150	$31.10	60
$29.40	50	$31.15	30
$29.35	20	$31.20	35

Trade executed	80,000@ 30.05 70,000@ 30.10 160,000@ 30.15 50,000@ 30.20 60,000@ 30.25 50,000@ 30.30 40,000@ 30.35 45,000@ 30.40 25,000@ 30.45 70,000@ 30.50
Unfilled	None

Example 2 : Enhanced Limit Order (ELO) - with unfilled quantity

Table 2 (a) : Original Position

Price	Volume (‘000)	Price	Volume (‘000)
Bid		Ask
$30.00	100	$30.05	80
$29.95	90	$30.10	70
$29.90	80	$30.15	160
$29.85	60	$30.20	50
$29.80	180	$30.25	60
$29.75	34	$30.30	50
$29.70	100	$30.35	40
$29.65	150	$30.40	45
$29.60	18	$30.45	25
$29.55	36	$30.50	70
$29.50	200	$30.55	80
$29.45	150	$30.60	55
$29.40	50	$30.65	50
$29.35	20	$30.70	25

Enhanced Limit Order: to buy 680,000 @ $30.50

Table 2 (b) : After Execution

Price	Volume (‘000)	Price	Volume (‘000)
Bid		Ask
$30.50	30	$30.55	80
$30.00	100	$30.60	55
$29.95	90	$30.65	50
$29.90	80	$30.70	25
$29.85	60	$30.75	20
$29.80	180	$30.80	70
$29.75	34	$30.85	20
$29.70	100	$30.90	10
$29.65	150	$30.95	70
$29.60	18	$31.00	15
$29.55	36	$31.05	25
$29.50	200	$31.10	60
$29.45	150	$31.15	30
$29.40	50	$31.20	35

Trade executed	80,000@ 30.05 70,000@ 30.10 160,000@ 30.15 50,000@ 30.20 60,000@ 30.25 50,000@ 30.30 40,000@ 30.35 45,000@ 30.40 25,000@ 30.45 70,000@ 30.50
Unfilled	30,000 @ $30.50 as limit order

Special Limit Order
A special limit order will allow matching of up to 10 price queues (i.e. the best price queue and up to the 10th queue at 9 spreads away) at a time provided that the traded price is not worse than the input price. A special limit order has no restriction on the input price as long as the order input price is at or below the best bid price for a sell order or at or above the best ask price for a buy order.

Any outstanding special limit order will be cancelled and will not be stored in the OTP-C.

Example 3 : Special Limit Order (SLO)

Table 3 (a) : Original Position

Price	Volume (‘000)	Price	Volume (‘000)
Bid		Ask
$30.00	100	$30.05	80
$29.95	90	$30.10	70
$29.90	80	$30.15	160
$29.85	60	$30.20	50
$29.80	180	$30.25	60
$29.75	34	$30.30	50
$29.70	100	$30.35	40
$29.65	150	$30.40	45
$29.60	18	$30.45	25
$29.55	36	$30.50	70
$29.50	200	$30.55	80
$29.45	150	$30.60	55
$29.40	50	$30.65	50
$29.35	20	$30.70	25

Special Limit Order: to buy 660,000 @ $30.55

Table 3 (b) : After Execution

Price	Volume (‘000)	Price	Volume (‘000)
Bid		Ask
$30.00	100	$30.55	80
$29.95	90	$30.60	55
$29.90	80	$30.65	50
$29.85	60	$30.70	25
$29.80	180	$30.75	20
$29.75	34	$30.80	70
$29.70	100	$30.85	20
$29.65	150	$30.90	10
$29.60	18	$30.95	70
$29.55	36	$31.00	15
$29.50	200	$31.05	25
$29.45	150	$31.10	60
$29.40	50	$31.15	30
$29.35	20	$31.20	35

Trade executed	80,000@ 30.05 70,000@ 30.10 160,000@ 30.15 50,000@ 30.20 60,000@ 30.25 50,000@ 30.30 40,000@ 30.35 45,000@ 30.40 25,000@ 30.45 70,000@ 30.50
Unfilled quantity	10,000 cancelled, not stored in the System.

Comparison of Limit Order, Enhanced Limit Order and Special Limit Order

The following example illustrates the effect on the central order book if a sell order of 600K shares of XYZ stock is input at different selling prices and with different order types:

Original Order Book of XYZ Stock (Nominal Price: $1.00)
Price	Volume (‘000)	Price	Volume (‘000)
Bid		Ask
$1.00	100	$1.01	80
$0.99	90	$1.02	70
$0.98	60	$1.03	90
$0.97	~	$1.04	50
$0.96	80	$1.05	30
$0.95	20	$1.06	20
$0.94	30	$1.07	30
$0.93	50	$1.08	50
$0.92	~	$1.09	60
$0.91	70	$1.10	30

	If the selling price is input at	Case 1 Limit Order	Case 2 Enhanced Limit Order	Case 3 Special Limit Order
1	$1.01	Order unfilled and put in the ask queue at $1.01	Order unfilled and put in the ask queue at $1.01	Order rejected by the OTP-C (special limit sell order cannot be made at a price above the current bid at $1.00)
2	$1.00	Order partially filled Filled: 100,000@$1.00 Outstanding: 500,000 put in the ask queue at $1.00	Order partially filled Filled: 100,000@$1.00 Outstanding: 500,000 put in the ask queue at $1.00	Order partially filled Filled: 100,000@$1.00 Outstanding:500,000 @$1.00 cancelled by the OTP-C
3	$0.91	Order rejected by the OTP-C (limit sell order cannot be made at a price below the current bid at $1.00)	Order partially filled Filled: 100,000@$1.00 90,000@$0.99 60,000@$0.98 80,000@$0.96 20,000@$0.95 30,000@$0.94 50,000@$0.93 70,000@$0.91 Outstanding: 100,000 put in the ask queue at $0.91	Order partially filled Filled: 100,000@$1.00 90,000@$0.99 60,000@$0.98 80,000@$0.96 20,000@$0.95 30,000@$0.94 50,000@$0.93 70,000@$0.91 Outstanding: 100,000@$0.91 cancelled by the OTP-C
4	Any price below $0.91 but above $0.111 (i.e. a price which does not deviate 9 times or more from the nominal price*)		Order rejected by the OTP-C (enhanced limit sell order cannot be made at a price of 10 spreads (or more) below the current bid price at $1.00)	Order partially filled Filled: 100,000@$1.00 90,000@$0.99 60,000@$0.98 80,000@$0.96 20,000@$0.95 30,000@$0.94 50,000@$0.93 70,000@$0.91 Outstanding: 100,000 cancelled by the OTP-C
5	At or below $0.111 (i.e. a price which deviates 9 times or more from the nominal price*)	Order rejected by the OTP-C (limit sell order cannot be made at a price below the current bid at $1.00 or deviates 9 times or more from the nominal price)*	Order rejected by the OTP-C (enhanced limit sell order cannot be made at a price of 10 spreads (or more) below the current bid price at $1.00 or deviates 9 times or more from the nominal price)*	Order rejected by the OTP-C (special limit sell order cannot be made at a price which deviates 9 times or more from the nominal price)*

* The 9-times restriction, as stipulated in Rule 505A of the Rules of the Exchange

Trade Types

A transaction completed / input into the OTP-C can first be categorized as either a non-direct or direct business transaction depending on whether the same Exchange Participant handles both sides of the transaction.

Non-Direct Business Transaction	Refers to the business transacted by two different Exchange Participants, one as buyer and the other as seller, whether as principal or agent.
Direct Business Transaction	Refers to the business transacted by an Exchange Participant who acts for both the buyer and the seller, whether as principal or agent.

OTP-C currently supports the following public trade types. Public trade types are disseminated by HKEX Orion Market Data Platform – Securities Market (OMD-C) for possible onward dissemination by information vendors:

Trading Method	Public Trade Type	Description
Automatch Trade	Non-direct: “ ” Direct: “Y”	Means a trade concluded through the OTP-C by automatic matching of buy and sell orders submitted by Exchange Participant(s).
Manual Trade	Non-direct: “M” Direct: “X”	Means a trade concluded by Exchange Participant(s) not through the OTP-C by automatic matching of orders and the selling party is responsible to report the trade details to the Exchange through the OTP-C.
Special Lot Trade	Non-direct: “M” Direct: “X”	Means a trade with the quantity of shares larger than one board lot and the quantity may not be in integral multiples of one board lot of shares, which can be concluded through the OTP-C using the operation specified for special lot transaction. In case the trade is not concluded through the OTP-C, the selling party is responsible to report the trade details to the Exchange through the OTP-C.
Odd Lot Trade	Non-direct: “D” Direct: “D”	Means a trade with the quantity of shares less than one board lot which can be concluded through the OTP-C using the operation specified for odd lot transaction. In case the trade is not concluded through the OTP-C, the selling party is responsible to report the trade details to the Exchange through the OTP-C.
Auction Matching Trade	Non-direct: “U” Direct: “U”	Means a trade concluded through the automatic order matching of the auction orders during the order matching period in the Pre-opening Session and at the end of the random closing period of the Closing Auction Session.
Pre-opening Trade	Non-direct: “P” Direct: “P”	Means a trade concluded before the commencement of the Morning Session, including trades concluded on the previous day but not recorded in the OTP-C.

Quotation rules

The first bid or ask order entered into the trading system on each trading day is governed by the opening quotation rule. The first order if it is a bid must be higher than or equal to the previous closing price minus twenty-four spreads. The first order if it is an ask must be lower than or equal to the previous closing price plus twenty-four spreads. The first order, whether it is a bid or ask, shall not in any case deviate 9 times or more from the previous closing price. Quotations for buy and sell orders other than the opening quotations are governed by another set of quotation rules and a scale of spreads. In particular, a buy order or a sell order shall not be made at a price that deviates 9 times or more from the nominal price. However, quotation rules in general do not apply to at-auction limit orders, except that a buy at-auction limit order or a sell at-auction limit order shall not be made at a price that deviates 9 times or more from the nominal price.

The spread table is available under the Second Schedule of the Rules of the Exchange.

Volatility Control Mechanism

A Volatility Control Mechanism (VCM) in the securities market is applied on constituent stocks of the Hang Seng Composite LargeCap, MidCap and SmallCap Indexes, SPAC Shares, SPAC Warrants, and eligible Exchange Traded Funds and Leverage & Inverse Products to prevent extreme price volatility from trading incidents such as a “flash crash” and algorithm errors, and to address systemic risks from the inter-connectedness of securities and derivatives markets.

In the securities market, different triggering thresholds (from ±5% to ±50%) are applied to constituent stocks of the Hang Seng Composite LargeCap, MidCap and SmallCap Indexes, SPAC Shares, SPAC Warrants and eligible Exchange Traded Funds and Leverage & Inverse Products. If the potential transaction price for an applicable security deviates more than a pre-defined triggering threshold from its last traded price five minutes ago, a five minutes VCM cooling-off period will be started. During the VCM cooling-off period, trading is allowed within a pre-defined price band. Normal trading and VCM monitoring will resume after cooling-off period.

The VCM is only applicable to board lot order input during certain periods of the Continuous Trading Session.

For more information about the VCM, please refer to the VCM information book, educational video, infographic and VCM cooling-off period trigger history in the securities market (derivatives market). For VCM enhancement initiatives, please click here for more details.

Trade Prices

Trade Prices	Description
Previous Closing Price	refers to the last recorded closing price of an issue of securities.
Indicative Equilibrium Price (IEP)	Pre-opening Session refers to a price, if any, determined by the OTP-C according to Rule 501H at any specific moment during the Pre-opening Session. Closing Auction Session refers to a price, if any, determined by the OTP-C according to Rule 501M at any specific moment during the Closing Auction Session.
Closing Auction Session (CAS) Reference Price	the price which is the median of 5 nominal prices in the last minute of the last Continuous Trading Session on that trading day. Please also refer to the following section for the description of closing price.
Bid Price	refers to the price of a buy order.
Ask Price	refers to the price of a sell order.
Current Bid Price	is also known as best bid price and refers to the following:
	During the Pre-opening Session or the Closing Auction Session,
	a.	(when the IEP can be determined in accordance with Rule 501Hor Rule 501M) the IEP at any specific moment; otherwise
	b.	the highest bid price at any specific moment.
	During the Continuous Trading Session, the highest bid price at any specific moment.
Current Ask Price	is also known as best ask price and refers to the following:
	During the Pre-opening Session or the Closing Auction Session,
	a.	(when the IEP can be determined in accordance with Rule 501Hor Rule 501M) the IEP at any specific moment; otherwise
	b.	the lowest ask price at any specific moment.
	During the Continuous Trading Session, the lowest ask price at any specific moment.
Nominal Price	refers to the following:
	a.	in respect of an issue of securities at any one time during or at the close of the Pre-opening Session means:
		i.	(when the IEP can be determined in accordance with Rule 501H) the IEP; otherwise
		ii.	the previous closing price;
	b.	in respect of an issue of securities at any one time during or at the close of the Continuous Trading Session on a trading day means:
		i.	if the issue has been traded up to that time on the day:
			A.	(when the current bid price is greater than the last recorded price), the current bid price; otherwise
			B.	(when the current ask price is less than the last recorded price), the current ask price; otherwise
			C.	where both (b)(i)(A) and (b)(i)(B) above do not apply, then the last recorded price; or
		ii.	if the issue has not been traded up to that time on the day:
			A.	(when the current bid price is greater than the previous closing price), the current bid price; otherwise
			B.	(when the current ask price is less than the previous closing price), the current ask price; otherwise
			C.	where both (b)(ii)(A) and (b)(ii)(B) above do not apply, then the previous closing price.
	c.	in respect of an issue of securities at any one time during or at the close of the Closing Auction Session means: -
		i.	(when it is an issue of CAS securities and the IEP can be determined in accordance with Rule 501M) the IEP; otherwise
		ii.	the CAS Reference Price;
Closing Price	Please refer to the following section for the description of closing price.
Last Recorded Price	refers to the sale price of a non-direct trade concluded by automatic order matching (including auction matching) as last recorded in the OTP-C
Day High Price	refers to the highest price of a non-direct trade concluded by automatic order matching (including auction matching) during the day.
Day Low Price	refers to the lowest price of a non-direct trade concluded by automatic order matching (including auction matching) during the day.

Closing Price Calculation

For non-Closing Auction Session (CAS) securities

Under normal operation environment, the closing price of a stock is determined by taking the median of 5 nominal prices in the last minute of the continuous trading session. The system will take up 5 snapshots on the nominal prices at 15-second interval starting from 3:59:00 p.m. The following example will illustrate the calculation:

Snapshot	Time	Bid Price	Ask Price	Last Recorded Price	Nominal Price#
1st	3:59:00 p.m.	$39.40	$39.45	$39.45	$39.45
2nd	3:59:15 p.m.	$39.40	$39.45	$39.45	$39.45
3rd	3:59:30 p.m.	$39.40	$39.45	$39.40	$39.40
4th	3:59:45 p.m.	$39.35	$39.45	$39.40	$39.40
5th	4:00:00 p.m.	$39.30	$39.35	$39.35	$39.35

The five snapshot nominal prices are arranged in ascending order as follows:

$39.35 $39.40 $39.40 $39.45 $39.45

The median (i.e. the middle one) is $39.40, which will then be taken as the closing price. Choosing the median of five snapshot nominal prices ensures that the closing price will not be biased by one single trade.

# The nominal price is determined by comparing the current bid price, the current ask price and the last recorded price in accordance with Rule 101 of the Rules of the Exchange.

For CAS securities

The Reference Price is first determined using the existing closing price calculation method mentioned above.

The Indicative Equilibrium Price (IEP) at the end of the CAS would be the final IEP, and the final IEP will serve as the closing price of a CAS security. If an IEP cannot be determined at the end of the CAS, the Reference Price will become the final IEP and therefore the closing price.

Guidelines on Adjustments to the Previous Closing Price of a Security

In the event that an equity issuer announces a share sub-division or a share consolidation or makes changes to its capital structure by way of rights issues, bonus issues, cash dividend payments, etc., the Exchange may adjust the Previous Closing Price of the relevant listed equity security on the ex-entitlement day or the corporate action effective day and display it on OTP-C for market reference.

It is common that an entitlement may subject to the fulfillment of certain condition(s), for example shareholders’ approval at a general meeting. If the condition(s) has not been satisfied or waived (if applicable), the entitlement will not be proceeded. Shareholders and potential investors should exercise caution when dealing in the shares especially on and after the ex-entitlement day until the entitlement becomes unconditional and consult their professional advisers if they are in any doubts.

Under circumstances where the previous closing price becomes irrelevant or the determination of an adjusted one is not practicable, the Previous Closing Price may either be presented as “N/A” (i.e. Not Applicable) or remained unchanged, as the case may be.

The formulas and exceptions that may be used for standard capital adjustment events are set out in the following table, as updated by the Exchange from time to time.

Entitlement Events	Adjusted Share Price =
1. Cash Dividend / Distribution Dividend or distribution in cash of $D per share Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when: (a) The dividend amount has not yet been determined on or before the last cum date; or (b) The dividend amount is higher than the closing price on the last cum date.
2. Bonus Issues X bonus share(s) for holding of every Y existing share(s) X bonus warrant(s) for holding of every Y existing warrant(s) Cash dividend, if there is any, may be deducted from the closing price on the last cum date before adjusting for the bonus issue. Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when other types of securities (e.g. warrants/debt securities) are issued for the existing shares under the bonus issue.
3. Distribution in specie Dividend / Distribution in specie of X share(s) in Company E for holding of every Y existing share(s) of Company F Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when: (a) The shares in Company E is not currently listed on the Exchange; or (b) The distribution ratio has not yet been determined on or before the last cum date; or (c) The amount of the dividend/distribution in specie of Company E is higher than the price of Company F when performing the Price Adjustment.	where: P_F is the closing price of Company F on the last cum date; and P_E is the closing price of Company E on the last cum date.
4. Rights issue/Open offer 4.1 Rights issue/Open offer of shares X rights/offer share(s) for holding of every Y existing share(s) at subscription price of $Z per rights/offer share Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when the rights issue/open offer is for subscribing for other types of securities (e.g. warrants/ debt securities).
4.2 Rights issue/open offer with bonus share(s) for rights/offer share(s) taken up X rights/offer share(s) for holding of every Y existing share(s) at subscription price of $Z per rights/offer share, with A bonus share(s) for B rights/offer share(s) subscribed for
4.3 Rights issue/open offer and bonus issue of shares at the same time Not entitled to each other X rights/offer share(s) for holding of every Y existing share(s) at subscription price of $Z per rights/offer share. A bonus share(s) for holding of every B existing share(s) Rights issue/open offer entitled to bonus issue A bonus share(s) for holding of every B existing share(s). X rights/offer share(s) for holding of every Y existing share(s) and bonus share(s) at subscription price of $Z per rights share Bonus issue entitled to rights issue/open offer X rights/offer share(s) for holding of every Y share(s) at subscription price $Z per rights/offer share. A bonus share(s) for holding of every B existing and rights/offer share(s) Cash dividends, if there is any, may be deducted from the closing price on the last cum date before adjusting for the rights issue/open offer. Price Adjustment for rights issue/open offer may not be made and the previous closing price will remain unchanged on ex-date when the subscription price (after adjustment for bonus issue², if applicable) is higher than the closing price of the shares on the last cum date.
5. Preferential offer Preferential offer of X share(s) in another unlisted company for holding of every Y share(s) at $Z per share Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date.	N/A

Entitlement Events

Adjusted Share Price =

1. Cash Dividend / Distribution

Dividend or distribution in cash of $D per share

Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when:

(a) The dividend amount has not yet been determined on or before the last cum date; or
(b) The dividend amount is higher than the closing price on the last cum date.

Cash Dividend Distribution

2. Bonus Issues

X bonus share(s) for holding of every Y existing share(s)

X bonus warrant(s) for holding of every Y existing warrant(s)

Cash dividend, if there is any, may be deducted from the closing price on the last cum date before adjusting for the bonus issue.

Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when other types of securities (e.g. warrants/debt securities) are issued for the existing shares under the bonus issue.

Bonus Issues equation

3. Distribution in specie

Dividend / Distribution in specie of X share(s) in Company E for holding of every Y existing share(s) of Company F

Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when:

(a) The shares in Company E is not currently listed on the Exchange; or
(b) The distribution ratio has not yet been determined on or before the last cum date; or
(c) The amount of the dividend/distribution in specie of Company E is higher than the price of Company F when performing the Price Adjustment.

Distribution in specie equation

where:
P_F is the closing price of Company F on the last cum date; and
P_E is the closing price of Company E on the last cum date.

4. Rights issue/Open offer

4.1 Rights issue/Open offer of shares

X rights/offer share(s) for holding of every Y existing share(s) at subscription price of $Z per rights/offer share

Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date when the rights issue/open offer is for subscribing for other types of securities (e.g. warrants/ debt securities).

Rights issue Open offer equation 1

4.2 Rights issue/open offer with bonus share(s) for rights/offer share(s) taken up

X rights/offer share(s) for holding of every Y existing share(s) at subscription price of $Z per rights/offer share, with A bonus share(s) for B rights/offer share(s) subscribed for

4.3 Rights issue/open offer and bonus issue of shares at the same time

Not entitled to each other
X rights/offer share(s) for holding of every Y existing share(s) at subscription price of $Z per rights/offer share. A bonus share(s) for holding of every B existing share(s)

Rights issue/open offer entitled to bonus issue
A bonus share(s) for holding of every B existing share(s). X rights/offer share(s) for holding of every Y existing share(s) and bonus share(s) at subscription price of $Z per rights share

Bonus issue entitled to rights issue/open offer X rights/offer share(s) for holding of every Y share(s) at subscription price $Z per rights/offer share. A bonus share(s) for holding of every B existing and rights/offer share(s)

Cash dividends, if there is any, may be deducted from the closing price on the last cum date before adjusting for the rights issue/open offer.

Price Adjustment for rights issue/open offer may not be made and the previous closing price will remain unchanged on ex-date when the subscription price (after adjustment for bonus issue², if applicable) is higher than the closing price of the shares on the last cum date.

Rights issue Open offer equation 3

Rights issue Open offer equation 4

Rights issue Open offer equation 5

5. Preferential offer

Preferential offer of X share(s) in another unlisted company for holding of every Y share(s) at $Z per share

Price Adjustment may not be made and the previous closing price will be presented as “N/A” on ex-date.

N/A

Corporate Action Events	Adjusted Share Price =
1. Consolidation of shares/warrants X existing shares / warrants to be consolidated into Y consolidated share(s) / warrant(s)
2. Sub-division of shares/warrants X existing shares / warrants to be sub-divided into Y sub-divided share(s) / warrant(s)
3. Change of domicile - Exchange for a new holding company shares/warrants X new holding company share(s) / warrant(s) for every Y existing share(s) / warrant(s)
4. Capital reduction by way of cancellation of shares X existing share(s) to be cancelled for every Y existing share(s).

While every effort is made to ensure the accuracy and completeness of information contained in this guidelines, Hong Kong Exchanges and Clearing Limited and its subsidiaries assume no liability in respect of statements of any nature contained in this document. Errors or omissions, if any, should not be made the basis for any claim, demand, or cause of action.

¹ Subject to any adjustment which may be made when the new shares proposed to be issued under a previous bonus issue of shares are not entitled to the current entitlement(s).

² In the event that there is a bonus issue of shares for rights/offer shares taken up, the subscription price used in the calculation of price adjustment will be averaged by the number of rights/offer shares and bonus shares for taking into account the bonus shares to be issued.