Hong Kong Exchange Shortens IPO Process, Settlement Cycle from 5 Days to 2 Days
8th July 2021 | Hong Kong
Hong Kong Exchange (HKEX), the world’s 4th largest stock exchange, has announced the introduction of a new platform FINI to streamline and digitalise Hong Kong’s IPO settlement process, including shortening IPO settlement cycle from T+5 days to T+2 days that will free up significant liquidity especially in oversubscribed IPOs. With FINI (Fast Interface for New Issuance), participants in the IPO can also opt-in for a compressed pre-funding requirement, which will release the liquid funds that is currently locked up during the IPO subscription period. The IPO settlement cycle of T+2 days is targeted to launch in Q4 2022 at the earliest. (IPO ~ Initial Public Offering)
” Hong Kong Exchange Shortens IPO Process, Settlement Cycle from 5 Days to 2 Days “
FINI, Modernises Hong Kong IPO Settlement Process
Through FINI (Fast Interface for New Issuance), brokers, share registrars, IPO sponsors, lawyers, underwriters, distributors and regulators will be able to use this new digital platform to execute their respective roles and to coordinate workflows during the listing initiation, subscription, pricing, allotment, payment, regulatory approval and stock admission processes.
HKEX plans to ensure that there is ample time for market readiness ahead of the introduction of FINI and therefore expects FINI to be rolled out in Q4 2022, at the earliest. HKEX will invite market participants to join education sessions, on-boarding, market-wide testing and rehearsals to ensure a smooth transition in due course. Separate announcements and consultations, where necessary, with respect to the Listing Rules and other operational procedures will also be made later.
The FINI Concept Paper Conclusions and FINI Information Pack, containing frequently asked questions, are available on the HKEX website.
HKEX received a total of 49 responses to its Concept Paper from stakeholders across the buy-side and sell-side of Hong Kong’s IPO market, with 90 per cent expressing support for the introduction of FINI. The vast majority of the respondents agreed that FINI would benefit Hong Kong’s IPO market by reducing market risk, increasing efficiency, modernising participants’ interactions and laying a competitive digital foundation for Hong Kong’s primary market infrastructure.
The published conclusions to the November 2020 FINI Concept Paper show overwhelming support for this next phase in the modernisation of Hong Kong’s IPO market.
HKEX Chief Executive Officer Nicolas Aguzin:
“We are delighted that our proposal to modernise Hong Kong’s IPO settlement process received such strong support from the market. The introduction of FINI will shorten the cycle between IPO pricing and the start of trading, driving market efficiency and reinforcing Hong Kong’s position as the world’s premier IPO market.
The launch of FINI demonstrates HKEX’s ongoing commitment to collaborating with the market in developing the optimum technological platforms and processes. This will allow us to, together, shape our future, delivering benefits for the market as a whole. We would like to thank everyone for their valuable feedback and insight in refining the FINI proposals, and we look forward to closely working with the market as we roll out this major innovation”
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About HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is one of the world’s major exchange groups, and operates a range of equity, commodity, fixed income and currency markets. HKEX is the world’s leading IPO market and as Hong Kong’s only securities and derivatives exchange and sole operator of its clearing houses, it is uniquely placed to offer regional and international investors access to Asia’s most vibrant markets.
HKEX is also the global leader in metals trading, through its wholly owned subsidiaries, The London Metal Exchange (LME) and LME Clear Limited. This commodity franchise was further enhanced with the launch of Qianhai Mercantile Exchange (QME), in China, in 2018.
HKEX launched the pioneering Shanghai-Hong Kong Stock Connect programme in 2014, further expanded with the launch of Shenzhen Connect in 2016, and the launch of Bond Connect in 2017.
Visit: www.hkexgroup.com
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