Hong Kong SFC: Informal Notice Sent to Mainland on Possible Trading Hours Extension; Noon Break Removal Most Discussed
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Hong Kong's Securities and Futures Commission (SFC) has informally notified mainland Chinese authorities about a potential extension of stock market trading hours, as part of a five-year strategic plan to align with global markets. SFC Executive Director of Market Supervision, Liang Zhongxian, stated that mainland authorities are aware of the discussions and generally respect Hong Kong's market autonomy, without expressing major objections. The SFC is studying plans that balance market development with minimizing impact on the mainland. Liang noted that since southbound Stock Connect trading accounts for over 20% of Hong Kong's total market turnover, progress depends on mainland readiness. The Hong Kong Exchange has consulted brokers on various options, with canceling the lunch break receiving the most attention. A forthcoming consultation paper will focus on the option most accepted by local industry. Regarding shortening the settlement cycle to T+1, the exchange will provide a timeline in a consultation summary later this year. The document will also detail challenges related to ETF subscriptions/redemptions and stock lending, emphasizing the need for adequate market preparation rather than rushing.
Source report
The Securities and Futures Commission (SFC) of Hong Kong has included the extension of trading hours as a medium-to-long-term objective in its first five-year strategic action plan, aiming to further align the Hong Kong market with major global exchanges.
Leung Chung-yin, Executive Director of the SFC's Market Surveillance Division, stated that Hong Kong has informally notified Mainland China of the potential extension of stock market trading hours. According to Leung, Mainland authorities are aware of the ongoing discussions in Hong Kong and have generally respected the market's autonomy, without expressing significant objections.
Meanwhile, Hong Kong is studying options that would benefit market development while minimizing potential impacts on Mainland China.
Currently, southbound trading under the Stock Connect program accounts for over 20% of total turnover in the Hong Kong market. Leung noted, "If Mainland China is not yet ready, it will be difficult for us to proceed." The Hong Kong Exchanges and Clearing Limited (HKEX) has already consulted brokers on various proposals and their respective pros and cons, but no specific plan has been finalized.
Leung pointed out that the option to eliminate the midday trading break has attracted the most attention. As a result, the upcoming consultation paper will focus on the direction that has received the highest level of acceptance from the local industry.
Regarding the shortening of the settlement cycle to T+1, HKEX will "provide a timeline" when it publishes the consultation summary later this year. Leung added that the document will also detail challenges related to ETF subscription and redemption, stock lending, and other relevant arrangements. He emphasized that there is no need to rush, and that it is more important to give the market sufficient time to prepare.
Source
金吾资讯Eastern