{"id":5416,"date":"2020-08-21T04:00:19","date_gmt":"2020-08-21T04:00:19","guid":{"rendered":"https:\/\/www.boardroomlimited.com\/hk\/?p=5416"},"modified":"2021-05-18T07:36:06","modified_gmt":"2021-05-18T07:36:06","slug":"hong-kong-looks-to-move-towards-an-uncertificated-securities-market-usm","status":"publish","type":"post","link":"https:\/\/www.boardroomlimited.com\/hk\/hong-kong-looks-to-move-towards-an-uncertificated-securities-market-usm\/","title":{"rendered":"Hong Kong looks to move towards an Uncertificated Securities Market (USM)"},"content":{"rendered":"

[vc_row full_width=”stretch_row” css_animation=”fadeInLeft” el_class=”business-insights-content”][vc_column][vc_row_inner el_class=”m-t-50″][vc_column_inner][vc_custom_heading text=”Uncertificated Securities Market News – Hong Kong looks to move towards an Uncertificated Securities Market (USM)” font_container=”tag:h4|text_align:left” use_theme_fonts=”yes” el_class=”m-b-30″][vc_column_text]As one of the world\u2019s leading IPO and securities markets, the Hong Kong Stock Exchange currently follows an electronic as well as paper framework when it comes to securities subscription, shareholding, corporate governance and shares trading. Specifically, paper subscriptions to Initial Public Offerings (IPOs) and shareholding in paper certificate format are still practiced. <\/span><\/p>\n

In recent years, law makers, regulators and capital market practitioners alike have expressed the opinion that the Hong Kong securities market, should, could and would progress into a paperless, or uncertificated environment, like some of the world\u2019s other leading securities markets.<\/span><\/p>\n

As a result in January 2019, the Securities and Futures Commission (\u201cSFC\u201d), Hong Kong Exchanges and Clearing Limited (\u201cHKEX\u201d) and the Federation of Share Registrars Limited (\u201cFSR\u201d) jointly issued a public consultation paper on the Uncertificated Securities Market (\u201cUSM\u201d) topic and future execution framework. <\/span>[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_row_inner el_class=”m-t-50″][vc_column_inner][vc_custom_heading text=”Uncertificated Securities Market (USM) Framework Implementation” font_container=”tag:h5|text_align:left” use_theme_fonts=”yes” el_class=”m-b-30″][vc_column_text]In April 2020, a conclusion paper was published on a revised operational model for implementing an Uncertificated Securities Market (USM) in Hong Kong<\/a>. While there\u2019s a lot of information in the paper, many details are still far from final. One thing that is clear however, is that the proposed new Uncertificated Securities Market (USM) framework will bring with its fundamental changes to the IPO and securities markets at both primary and secondary market levels. <\/span><\/p>\n

At the primary market (Initial Public Offering) level, new IPOs will no longer provide a paper-based subscription channel to IPO subscribers, neither will paper based share certificates be provided. The primary impact on the market will effectively be an expedition of the whole process from consolidation and integration of subscription data and funds from all viable channels for an IPO.<\/span><\/p>\n

At the secondary (trading) level, USM will significantly impact the process flow, time, etc. of securities transactions.\u00a0 In addition, from a corporate governance point of view, how shareholders choose to own and transact their shares, and with it how shareholder rights are represented will undergo considerable changes. This is important because a core objective of the Uncertificated Securities Market (USM) initiative is to ensure investors have a real option when it comes to deciding whether to hold securities in their own name or not. The current paper-based process can act as an impediment for effecting legal title transfers as it can be cumbersome and time-consuming.<\/span>[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_row_inner el_class=”m-t-50″][vc_column_inner][vc_custom_heading text=”BoardRoom Hong Kong – Uncertificated Securities Market (USM) Initiative” font_container=”tag:h5|text_align:left” use_theme_fonts=”yes” el_class=”m-b-30″][vc_column_text]The Uncertificated Securities Market (USM) initiative is going to revolutionize the IPO and securities market and BoardRoom, as one of the active share registrars in the Hong Kong capital market, shared our insights and knowhow on the USM topic in three recent webinar sessions. The sessions were well received by our audience with many clients commenting that the sessions were \u201cvery informative\u201d and \u201csaved them the time of having to read the full paper released by SFC\u201d. <\/span><\/p>\n

As an important industry member who regularly participates in USM discussion, consultation and conclusion process our team is well equipped to answer any questions you may have on this update to the industry and we welcome your queries on the topic. If you would like more information on the Uncertificated Securities Market (USM) initiative, please reach out to our Share registry services<\/a> experts today.<\/span><\/p>\n

Please contact: <\/span><\/p>\n

Kellie Chan, Director, Business Development: kellie.chan@boardroomlimited.com<\/a> , or<\/span><\/p>\n

Elaine Liu , Director of Sales, Hong Kong and China Region: elaine.liu@boardroomlimited.com<\/a> <\/span>[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content_no_spaces” css_animation=”fadeIn” el_class=”seperator-container common-spacing”][vc_column][vc_row_inner][vc_column_inner][vc_separator color=”custom” border_width=”2″ accent_color=”#e9e6ee”][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row full_width=”stretch_row” css_animation=”slideInLeft”][vc_column][vc_row_inner][vc_column_inner][vc_custom_heading text=”Related Business Insights” font_container=”tag:h3|text_align:center” use_theme_fonts=”yes”][\/vc_column_inner][\/vc_row_inner][vc_row_inner el_class=”common-top-spacing business-insights-container”][vc_column_inner][vc_column_text]