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INVESTOR EDUCATION

Hong Kong Stock Exchange



The Hong Kong Stock Exchange (traditional Chinese: abbreviated as HKEX; SEHK: 0388) is the stock exchange of Hong Kong. The exchange has predominantly been the main exchange for Hong Kong where shares of listed companies are traded. More commonly known as the Hang Seng Index, it is Asia's second largest stock exchange, behind the Tokyo Stock Exchange.

Hong Kong Exchanges and Clearing is the holding company for the exchange.

 

History

The history of the securities exchange began formally in the late 19th century with the first establishment in 1891, though informal securities exchanges have been known to take place since 1861[1]. The exchange has predominantly been the main exchange for Hong Kong despite co-existing with other exchanges at different point in time. After a series of complex mergers and acquisitions, HKSE remains to be the core. From 1947 to 1969 the exchange monopolized the market.

Association of Stockbrokers in Hong Kong (Founded 1891)
Image:Template CanadianCityGeoLocation South.png
(1914) Renamed to Hong Kong Stock Exchange
Image:Template CanadianCityGeoLocation South.png
(1947) A merger is made after World War II with Hong Kong Stock Exchange retaining the name
Image:Template CanadianCityGeoLocation West.png Hong Kong Stockbrokers Association (Founded 1921)
Image:Template CanadianCityGeoLocation South.png
Hong Kong Stockholders Association Ltd (Founded 1978) allow info sharing between HKSE and other exchanges
Image:Template CanadianCityGeoLocation West.png Far East Exchange Ltd (Founded 1969) Image:Template CanadianCityGeoLocation West.png Kam Ngan Stock Exchange Ltd (Founded 1971) Image:Template CanadianCityGeoLocation West.png Kowloon Stock Exchange Ltd (Founded 1972)
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(1986) HKSE merges with other exchanges and retain the name but also presented as Stock Exchange of Hong Kong
Image:Template CanadianCityGeoLocation South.png
(2000) Hong Kong Exchanges and Clearing becomes the holding company for Hong Kong Stock Exchange
Image:Template CanadianCityGeoLocation West.png Hong Kong Futures Exchange Ltd (Founded 1976) Image:Template CanadianCityGeoLocation West.png Hong Kong Securities Clearing Company Ltd (Founded 1989)

Business

Computers were integrated on April 2, 1986, which has helped modernize the system[2]. In 1993 the exchange launched the "Automatic Order Matching and Execution System" (AMS) that was replaced by the third generation system (AMS/3) in October 2000[3]. Systems as such were added to meet the increased popularity of online Stock trading.

Trading Hours: From 10:00am to 12:30pm and from 2:30pm to 4:00pm

(Summer: From 10:00pm to 12:30am and from 2:30am to 4:00am New York time)
(Winter: From 9:00pm to 11:30pm and from 1:30am to 3:00am New York time)

Regulatory role

David Webb, independent non-executive director of the Exchange since 2003, has been arguing for a super regulatory authority to assume that role as regulator, as there is inherent conflict between its commercial and regulatory roles. In the meantime, he argues for improved investor representation on the Hong Kong Stock Exchange.

In 2007, the uproar by smaller local stockbrokers over the decision by board of directors to cut minimum trading spreads for equities and warrants trading at between 25 HK cents and HK$2 caused the new board to vote to reverse the decision. The reforms were to be implemented in the first quarter, but was put back on the table following protests by brokers. Webb criticised the board for caving in to vested interests.[4]

References

  1. HKedu. "HKU." Hong Kong U. Retrieved on 2007-02-15.
  2. HKEX. "HKEX." History of HK exchange. Retrieved on 2007-02-11.
  3. ADVFN. "ADVFN." History of the Hong Kong stock exchange. Retrieved on 2007-02-11.
  4. Cheung, Jackie (February 15, 2007). Plan for tighter spreads dropped. Hong Kong Standard. Retrieved on 2007-03-19.

 


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