Hong Kong Exchanges & Clearing Ltd. · HKEX:388

Hong Kong Exchanges & Clearing — IPO Roadshow (November 2020)

18 slides from Hong Kong Exchanges & Clearing's IPO roadshow presentation, Nov 16, 2020

  1. Slide 1: Modernising Hong Kong's IPO settlement process

    Modernising Hong Kong’s IPO settlement process Charles Li Chief Executive, HKEX Group Bonnie Y Chan Head of Listing, HKEX Lukas Petrikas Head of Innovation and Data Lab, HKEX 16 November 2020

  2. Slide 2: Disclaimer

    Disclaimer The information contained in this document is for general informational purposes only and does not constitute an offer, solicitation, invitation or recommendation to subscribe for or purchase any securities, or other products or to provide any investment advice or service of any kind. Thi

  3. Slide 3: What is IPO settlement?

    What is IPO settlement? The activities that take place in the days leading up to a new Hong Kong listing: Company Investors Book-building Regulatory Share delivery Start of Pricing launches IPO subscribe & balloting approval & settlement trading 5 or more business days 3

  4. Slide 4: What are we proposing?

    What are we proposing? Reduce how long it takes less market risk for investors and issuers Simplify the complexity a more efficient and logical process Embrace digital change robust technology to serve our market well into the future An important reform to maintain Hong Kong’s global leadership as a

  5. Slide 5: FINI is a new web-based service from HKEX

    FINI is a new web-based service from HKEX It allows market participants and regulators to work together seamlessly and digitally throughout Hong Kong IPO settlement 5

  6. Slide 6: FINI: the main changes for Hong Kong IPOs

    FINI: the main changes for Hong Kong IPOs 1 | End-to-end IPO settlement in one place 2 | Improved workflows and interactions 3 | Going paperless but staying inclusive 4 | Liquidity relief for the market 6

  7. Slide 7: End-to-end IPO settlement in one place

    1 | End-to-end IPO settlement in one place Market participants  IPO reference data  Subscription input Retail Brokers IPO Sponsors  Pricing confirmation Share Underwriters/ Registrars Distributors  Allotment information  Regulatory reviews  Settlement workflow Regulatory authorities  Checks &

  8. Slide 8: Improved workflows and interactions

    2 | Improved workflows and interactions IPO reference data dynamic reports intelligent workflows real time risk alerting IPO status dashboards access from anywhere Dozens of tasks will be streamlined or automated with FINI 8

  9. Slide 9: Going paperless but staying inclusive

    3 | Going paperless but staying inclusive IN USE TODAY WITH FINI paper forms web portal cheques file transfer faxes API Formal support for paper-based Market participants may interact with their interactions will be discontinued clients however they like as long as the data is ultimately input into

  10. Slide 10: Liquidity relief for the market

    4 | Liquidity relief for the market Public offer subscriptions today: Public investors Brokers The IPO issuer May use cash or borrow Must pre-pay 100% of Refunds any surplus money to support their investors’ subscription subscription money to IPO subscriptions value to the issuer brokers after ballo

  11. Slide 11: Liquidity relief for the market (cont.)

    4 | Liquidity relief for the market (cont.) Public offer subscriptions with FINI: Public investors Brokers The IPO issuer Confirm availability of funds before balloting Will collect only actual share allotment value Subscribe as usual • Minimum 10% of demand in cash • Up to 90% can be in bank credit

  12. Slide 12: Target T+1 timetable with FINI

    Target T+1 timetable with FINI IPO shares could start trading 70-80% faster than today: Company Investors Book-close Pricing Regulatory Share delivery Trading launches IPO subscribe Monday 12pm Tuesday 10am approval & settlement Wednesday 9am as little as 23 hours 45 hours (current IPO average: 218

  13. Slide 13: Preserving the most important foundations

    Preserving the most important foundations  No fundamental changes to the roles & responsibilities of market participants Sponsors, underwriters, brokers, registrars continue to serve issuers and investors  No fundamental changes to Hong Kong’s current listing regime Only certain Listing Rule chang

  14. Slide 14: What are the next steps?

    What are the next steps? XC

  15. Slide 15: Today, HKEX published a Concept Paper on FINI

    Today, HKEX published a Concept Paper on FINI Opportunity to give us your feedback We are asking three questions: 1) Do you support the overall proposal? 2) Do you have any comments on specific aspects of the proposal or the functionality of the FINI platform? 3) Are there any aspects of the IPO pro

  16. Slide 16: If the FINI proposal is supported by the market…

    If the FINI proposal is supported by the market…  Using FINI for settlement would become mandatory for all Hong Kong IPOs.  To give the market sufficient time to prepare, we expect to launch FINI no earlier than the second quarter of 2022. Concept Paper feedback period System development and testi

  17. Slide 17: FINI in summary

    FINI in summary  A comprehensive modernisation of Hong Kong’s IPO settlement process, covering its logic, conventions and technology  Benefits the whole market by making our IPO franchise more competitive, efficient, fair, robust and well-equipped for a digital future  HKEX welcomes market feedba

  18. Slide 18: Thank you.

    Thank you. For further information on HKEX, please go to hkexgroup.com and hkexnews.hk For further information on FINI, please go to hkex.com.hk/fini

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