Hong Kong Exchanges & Clearing Ltd. is considering rule changes aimed at increasing trading, according to Chief Executive Officer Charles Li.
Rebates to market makers, simplified rules for using collateral across multiple positions, and the removal or reduction of stamp duty charges are among measures being considered,
Li said. Some of the changes will require approval from the securities regulator or government, he said.
The exchange operator is eyeing changes as it battles for business with its international rivals. HKEX plans to allow so-called innovative companies with dual-class share structures as part of a slew of measures that could see the biggest changes to its listing rules since 1993. It has also set up three trading links with mainland China, with more in the pipeline, and in November introduced iron ore futures, in a head-on challenge to Singapore Exchange Ltd.
“The objective, if there is an objective, is to really make our market more competitive,” Li said.
“Our strategy is making our initial public offering market more relevant, make our market more connected, and make our derivatives market more competitive. That really is our three-leg strategy.” HKEX’s share price closed up 3.5 percent on Monday, its highest level since July 2015. The stock gained 37 percent in the 12 months through Friday, outperforming the majority of its peers.
Despite being the world’s fourth-biggest stock market, Hong Kong has traditionally lagged behind Singapore Exchange for derivatives trading.
HKEX is also considering whether to ask the government to reduce or remove stamp duty, Li said.