Hong Kong turns the page on paper shares as digital shift kicks off in November
Some 2,600 Hong Kong-listed firms will go paperless in stages over five years, with new listings issuing no physical certificates
Hong Kong will roll out a fully digital, paperless stock market from November 16, a move aimed at boosting efficiency and strengthening the city’s competitiveness, the market regulator said on Monday.
About 2,600 listed companies will transition to the new system in phases over five years after the launch, while firms going public after November 16 would no longer issue physical share certificates, according to the Securities and Futures Commission (SFC).
Investors will still be able to retain their existing paper certificates or opt to convert them into digital records.
Eliminating paper-based and manual processes was expected to improve efficiency for market participants, enable more straight-through processing and support greener operations, in line with global trends, the regulator said.
Plans to digitalise Hong Kong’s stock market were first proposed more than two decades ago. The SFC issued its initial consultation paper in 2002, with progress slowed by a lengthy legal process.
The paperless framework – formally known as the uncertificated securities market regime – is now ready for implementation following system development and testing by bourse operator Hong Kong Exchanges and Clearing (HKEX) and the Federation of Share Registrars Limited (FSR).
Stockbrokers and other market participants would be invited to take part in further testing in the coming months, while detailed rule changes would be published shortly, the SFC said.