Hong Kong Exchanges & Clearing Ltd. · HKEX:388

Hong Kong Exchanges & Clearing — IPO Roadshow (July 2021)

14 slides from Hong Kong Exchanges & Clearing's IPO roadshow presentation, Jul 6, 2021

  1. Slide 1: Modernising Hong Kong's IPO settlement process

    Modernising Hong Kong’s IPO settlement process Bonnie Y Chan Head of Listing Glenda So Head of Post Trade Lukas Petrikas Head of Innovation and Data Lab 6 July 2021

  2. Slide 2: Disclaimer

    Disclaimer The information contained in this document is for general informational purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities, or other products or to provide any investment advice or service of any kind. Thi

  3. Slide 3: HKEX proposal to shorten and modernise Hong Kong's IPO settlement process

    In November 2020, HKEX published a proposal to shorten and modernise Hong Kong’s IPO settlement process. ––––– Less time lag between IPO pricing and trading less market risk for investors and issuers More efficient market operations streamlined workflows, timely data, reduced operational risk Broade

  4. Slide 4: Hong Kong IPO settlement today takes too long

    Hong Kong IPO settlement today takes too long. ––––– Company Investors Book-building Regulatory Share delivery Start of Pricing launches IPO subscribe & balloting approval & settlement trading Currently takes 5 or more business days 4

  5. Slide 5: FINI is a comprehensive reform of Hong Kong IPO settlement

    FINI is a comprehensive reform to the logic, conventions and technology that underpin Hong Kong IPO settlement. ––––– Market participants IPO Sponsors Retail Brokers + Counsel Share Underwriters + Registrars Distributors IPO data, workflows and interactions between a large number of parties will com

  6. Slide 6: Conclusions: Strong support from stakeholders

    Conclusions: Strong support from stakeholders, gives HKEX a clear mandate to proceed with FINI. ––––– Do you support the overall FINI proposal?  90% of responses to the FINI Concept Paper were in favour of the proposal 8%  Broad support expressed by both buyside and sellside groups 90%  HKEX has

  7. Slide 7: FINI implementation model

    FINI inplementation model 3¢

  8. Slide 8: IPO settlement with FINI will initially be T+2

    Implementation Model IPO settlement with FINI will initially be “T+2”. –––––  HK IPO settlement timetable with FINI will be T+2 instead of T+1  Aligns with HK’s secondary equity market settlement cycle Book close Pricing by Approval Trading T-1 / 12pm T / 12pm T+1 / 5pm T+2 / 9am  Gives more time

  9. Slide 9: New pre-funding arrangement will reduce lock-up times and amounts

    Implementation Model New pre-funding arrangement for IPO subscriptions by the public will reduce “lock-up” times and amounts. ––––– “Mega” HK IPOs expected to lock up  HKSCC Clearing Participants (CPs) CP’s Settlement Bank ~70-80% less cash will hold clients’ application money with their settlement

  10. Slide 10: Harmonised investor ID standard for HK IPOs

    Implementation Model A harmonised investor ID standard for HK IPOs will be introduced to improve market quality, consistency and fairness. ––––– International offer e-White public offer EIPO public offer (via bookrunner) (via share registrar) (via broker / CP)  Same ID standard will be used for all

  11. Slide 11: HKEX will roll out FINI no earlier than Q4 2022

    Next Steps HKEX will roll out FINI no earlier than Q4 2022. ––––– FINI launch (earliest) Concept Paper Market briefings Conclusions Amendment of relevant rules, regulations, operating procedures and guidelines FINI user on-boarding FINI system development and testing Pilot group testing Market-wide

  12. Slide 12: HKEX has published materials for further reference

    Today, HKEX has published materials for further reference: ––––– FINI Conclusions Paper FINI Information Pack FINI Website Recap of market feedback and Operational walk-through + Frequently One venue for all FINI materials adjustments to the original FINI model Asked Questions (FAQs) about FINI www.

  13. Slide 13: Welcome questions

     HKEX thanks all stakeholders for their valuable input on FINI.  The FINI website contains more details regarding today’s announcement, and will continue to be updated as FINI is developed.  Market participants are welcome to contact HKEX with further questions through the FINI website. … Welcome

  14. Slide 14: Thank you

    Thank you. For further information on HKEX, please go to hkexgroup.com and hkexnews.hk For further information on FINI, please go to hkex.com.hk/fini

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