More than two decades after the idea was first proposed, Hong Kong's stock market may in 2012 finally adopt so-called scripless shares, abandoning physical certificates in favour of electronic recording of shareholdings.
Although the Hong Kong stock exchange is the world's seventh-largest by market capitalisation, the law still requires all companies to issue physical share certificates.
In Australia and on the mainland, all investors have their shareholdings in electronic records. Since 1996, Britain has allowed investors to opt for electronic records or physical share certificates.
In a third attempt to start a scripless market, the Securities and Futures Commission and Hong Kong Exchanges and Clearing yesterday jointly launched a consultation paper on the subject. It would allow investors to turn in their existing share certificates, creating electronic records in an account under their own names or the names of their brokers in the Central Clearing and Settlement System.
The proposal also allows investors to keep their share certificates. They could also opt for turning the electronic record back into physical shares at any time.
In the case of initial public offerings, investors could choose to receive physical share certificates or an electronic record.
This dual system would be in place for some years before any attempt would be made to abolish share certificates.