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the hong kong stock exchange’s “historic changes” took effect today.

today (september 23), the hong kong stock exchange will officially implement arrangements to maintain market operations during severe weather, and severe weather trading will take effect. currently, a poster stating "hong kong is ready for severe weather trading" has been posted on the homepage of the hong kong stock exchange's official website.

in a newly released video, hong kong exchanges and clearing limited (hkex) deputy chief executive officer yao jiaren said: "this is an important step for us to promote the development of the hong kong market. in the future, hong kong's stock and derivatives markets will no longer be delayed or closed due to typhoons or heavy rains." analysts pointed out that the ability of the market to operate normally around the clock is one of the important attractions of hong kong as an international financial center.

it is understood that investors of the hong kong stock exchange currently generally use electronic methods to conduct transactions. therefore, even if banks or brokers do not provide physical hong kong stock exchange office trading services in bad weather, it should not have a significant impact on market activities.

big changes coming soon

today (september 23), the hong kong stock exchange will officially implement arrangements to maintain market operations in severe weather. currently, a poster stating "hong kong is ready to deal with severe weather trading" has been posted on the homepage of the hong kong stock exchange's official website.

according to the official website of the hong kong stock exchange, if the hong kong observatory hoists a typhoon signal no. 8 or above or issues a black rainstorm warning, or the hong kong government announces an "extreme situation", all products in the securities market and derivatives market will maintain trading services and operations. if the above-mentioned severe weather occurs on the trading day of the shanghai-shenzhen stock connect, the trading of the shanghai-shenzhen stock connect will also continue.

in a newly released video, hkex deputy chief executive officer yao jiaren said: “i am very grateful to the sar government, regulators and market stakeholders for their continued strong support for this plan. this is also an important step for us to promote the development of the hong kong market. in the future, hong kong's stock and derivatives markets will no longer be delayed or closed due to typhoons or heavy rains.”

the change means that hong kong will end its long-standing tradition of closing its markets during typhoons and rainstorms. the market operation arrangements during bad weather are linked to the severity of typhoons, rainstorms and extreme conditions issued by hong kong authorities.

in this regard, hong kong exchanges and clearing limited (hkex) chief executive officer, chan yik ting, said: “this move will not only help maintain market continuity, but also ensure that investors can manage risks under various climate conditions.”

according to a previous announcement by the hong kong stock exchange, inclement weather trading will take effect from september 23, 2024. securities trading on or through the exchange (including northbound and southbound trading of the shanghai-hong kong stock connect) will continue to be maintained during inclement weather conditions. similar to regular trading days, all exchange participants need to continue to provide trading-related services during inclement weather.

just three months ago, on june 18, hong kong chief executive john lee announced that the hong kong stock exchange would not suspend trading in severe weather.

it is worth mentioning that just over ten days ago, the hong kong stock market was closed for the whole day due to the impact of typhoon "makar".

prior to this, bad weather frequently caused the hong kong stock market to suspend trading. according to statistics from hong kong media, bad weather has caused the hong kong stock market to suspend trading 12 times since 2018, including four times in 2023.

last year, hong kong stocks were suspended for the entire day on september 1 due to the impact of hurricane saula. on september 8, the black rainstorm warning and extreme conditions took effect, and the market was suspended for the entire day again. in september alone, the market was suspended for two days. wind data statistics show that in the first eight months of last year, the average daily turnover of the hong kong stock market was hk$112 billion. if calculated based on this average daily turnover, it means that the hong kong stock market lost hk$224 billion in turnover in the two trading days of suspension in september.

analysts point out that the ability of the market to operate normally around the clock is one of the important attractions of hong kong as an international financial center. the investor group of the hong kong market is becoming increasingly diverse, and it is interconnected with the a-share market. therefore, it is very important to ensure that the hong kong market and the interconnection mechanism can operate fully on every trading day to support investors in global asset allocation in the region.

everything is ready

the hong kong stock exchange has completed market consultation on maintaining market trading in severe weather conditions and announced arrangements for normal market opening in severe weather conditions. starting from september 23, regardless of wind or rain, the hong kong market will open normally on trading days and the shanghai-hong kong stock connect will also operate normally.

during periods of inclement weather, trading, post-trading and listing arrangements will remain largely the same as normal trading days, with some necessary adjustments to ensure the operational resilience of the market and the safety of market participants. certain services provided at physical locations will not be available.

for example, in the case of inclement weather, it is recommended that certain cover-up exemptions be granted to participants who are unable to deposit physical securities with the clearing house for settlement due to physical business closures. if the last book date for some corporate actions falls on inclement weather, it is recommended that the date be postponed because corporate action participants holding physical securities will be affected by the physical business closures.

"people's safety is always an important consideration, and we encourage market participants to work remotely as much as possible during inclement weather." hkex confirmed that during periods of inclement weather, its trading, clearing and delivery, and market data systems will all be accessible online remotely, and it has optimized its infrastructure and operations many times, reducing the need for market participants to go to the office to log into the system.

it is understood that investors of the hong kong stock exchange currently generally use electronic means to conduct transactions. therefore, even if banks or brokers do not provide physical hong kong stock exchange office trading services during bad weather, it should not have a significant impact on market activities. market participants need to ensure that their remote operations are smooth and that the hong kong stock exchange can transfer funds without using physical services, so as to prepare for maintaining transactions during bad weather.

in response to this issue, the hong kong association of banks and hong kong interbank clearing limited have worked with the task force to confirm that relevant banking services will operate as usual during severe weather conditions. for example, the designated banks and settlement banks of the relevant clearing houses will provide electronic cheque clearing and electronic transfer services as usual to fully support the operations and funds settlement needs of clearing participants.

regarding the upcoming reform of bad weather trading, yaocai securities ceo xu yibin said: "we are ready for bad weather trading arrangements. we have arranged enough staff and completed the drill." he said that in order to take care of the needs of colleagues, remote work arrangements have been made to ensure that bad weather trading can operate smoothly. customers are already accustomed to online trading channels. they can log in to the online platform and mobile app at any time around the clock to buy, sell and settle. in bad weather, you can complete transactions without leaving your home.

editor: tactical heng

proofreading: ran yanqing‍‍‍‍