HKEX enhances volatility controls

Business | Stella Zhai 24 Apr 2020

Hong Kong Exchanges and Clearing (0388) will launch the first phase of enhancements for the Volatility Control Mechanism on May 11, providing a cooling-off period during volatility in the financial market.

The first phase of enhancements includes expanding VCM stock coverage from the 78 constituents of the Hang Seng and Hang Seng China Enterprises Indexes to nearly 500 constituents of Hang Seng Composite LargeCap, MidCap and SmallCap Indexes, said HKEX.

It will also apply a tiered structure of triggering thresholds at fluctuations of 10 percent, 15 percent, and 20 percent to the last traded price five minutes ago respectively for constituents of three Hang Seng Composite Indexes.

HKEX will review market operations six months after the first phase of enhancements before introducing the second.

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