HKEX seeks views on speeding up IPO settlement process
Monday, November 16, 2020
Hong Kong Exchanges and Clearing (0388) has published a concept paper to seek feedback on a proposed web-based service that could shorten the time gap between IPO pricing and trading to as little as one business day.
The exchange operator said it will introduce Fini, or Fast Interface for New Issuance, that enables IPO market participants, advisers and regulators to interact digitally and seamlessly on the many steps that comprise the end-to-end IPO settlement process.
The launch date of Fini will be subject to market support and readiness and is envisaged to take place no earlier than the second quarter of 2022.
By modernizing both the logic and the infrastructure of the Hong Kong IPO settlement, HKEX expects that the introduction of Fini will reduce the settlement timeframe by as much as 80 percent, it said.
Fini will provide a single user-friendly platform that brokers, share registrars, IPO sponsors, lawyers, underwriters and distributors can use to share information and coordinate workflows during the offering initiation, subscription, pricing, allotment, payment, regulatory approval and stock admission processes – all steps that precede a newly listed company “striking the gong” to mark its trading debut, it said.
In addition, HKEX’s listing division, wholly-owned subsidiary Hong Kong Securities Clearing Company, and the Securities and Futures Commission will use Fini to oversee the settlement process for each IPO as it happens, providing certain acknowledgments and approvals that may be required during the process directly via the new platform.
Fini will be managed by HKSCC alongside the existing Central Clearing and Settlement System, which remains the central securities depository for the Hong Kong market, the bourse operator said.
The deadline for responding to the concept paper via a feedback form is 6pm on January 15, 2021.