The Hong Kong Futures Exchange plans to issue a consultation paper to its 137 members within the next month to seek opinions on switching Hang Seng Index (HSI) futures and options to electronic trading.
The exchange's newly appointed general counsel, William Grossman, said this would be a simple consultation on whether members supported moving HSI futures and options from the present open-outcry floor-trading method to electronic trading.
'If the response is positive, the exchange will start another study on the implications of such a move,' he said.
Many products on the futures exchange are traded electronically but HSI futures and options, which account for almost 90 per cent of all trading volume at the exchange, still use the open-outcry method.
The market and legislators have complained that open-outcry trading is less transparent than the electronic system and more open to market manipulation.
Mr Grossman believes electronic trading would provide a better audit trail to detect manipulation or malpractice, and make it easier for investors to get real-time market prices.
However, he believes an advantage of open-outcry is that it allows traders to communicate with each other, enabling market news to spread on the floor quickly.