The dispute over the derivatives trading system of Cheung Kong (Holdings) escalated yesterday with Hong Kong Exchanges and Clearing's chief operating officer calling for brokerages not to trade on platforms which had yet to get regulatory approval.
Property developer Cheung Kong (Holdings) has teamed up with five investment banks to offer an equity-linked notes (ELNs) trading platform to local brokers.
It is reported to be preparing to launch its iMarkets system as early as November 15, although it is yet to receive Securities and Futures Commission approval. The launch of such a platform would put it in direct competition with HKEx's proposed service for trading new derivative products.
A Cheung Kong spokesman yesterday would not confirm the launch day but said 'preparation work for the launch of iMarkets is being carried out'.
HKEx chief operating officer Frederick Grede warned brokers against trading with unregulated platforms.
'If any trading platform is introduced without regulatory approval, such a platform would be illegal. If I was a brokerage executive, I wouldn't direct my clients to a system that doesn't have regulatory approval,' he said.
Cheung Kong is reportedly working with brokerages to set up its iMarkets platform which will offer Internet trading of the ELNs - a high-risk, high-return derivative product which allows investors to bet on stock-price movements.