Hong Kong Exchanges and Clearing (0388) will issue a discussion paper on extending securities trading hours this quarter, the city’s securities watchdog said.
The change will begin with the derivatives market, which enables investors to respond to evolving global developments across time zones, and ensures Hong Kong remains competitive, the Securities and Futures Commission chief executive Julia Leung Fung-yee said at a conference on Friday.
Over time, longer trading access will be supported by innovations such as tokenized money and e-Hong Kong dollar-enabled settlement possibilities, she said, adding that these initiatives together allow investors more room to adjust their positions and manage risks in response to new market information.
Leung said two major next steps going forward are cross-market margining, and the operational handling of non-cash collateral.
Today, participants trading across various markets must post margin separately to different clearing houses, leading to the tie-up of collateral, and the SFC is working with HKEX to develop margin offset across its clearing houses, to free up capital safely for more productive use, she noted.
HKEX’s OTC Clear will streamline its process by enabling same-day settlement for bond deposits and withdrawals, she said, adding that both regulators are striving to launch the measure this year, which will make non-cash collateral a more attractive funding tool.
