Hong Kong Exchanges and Clearing has proposed changing the rules for derivatives warrants in the wake of competition from overseas exchanges.
The proposals include the introduction of the market maker system and relaxation of listing requirements for warrants.
The exchange has been under competitive pressure from overseas counterparts on the development of the derivative warrants market.
Singapore, Australia, Luxemburg, Germany, Italy and Switzerland have all sought to develop their derivatives markets, prompting the HKEx to review its own market structure to compete, according to the Hong Kong exchange's consultation paper.
Brokers said some local investment banks preferred their derivative warrants to be listed in Luxemburg because of its simple procedures.
HKEx chief executive Kwong Ki-chi yesterday said the proposals should help further expand the derivative warrants market in Hong Kong.
Among the proposals is a market-maker system that requires investment banks, which issue derivative warrants, to act as market makers. They would need to quote bid and offering prices for investors when they want to trade the warrants in the secondary market.
