Hong Kong SFC: Paperless securities market system expected to be implemented on November 16th.

The Securities and Futures Commission of Hong Kong announced today (March 30) that the paperless securities market system is expected to be implemented on November 16, 2026. In order for the paperless securities market regulations to take effect, it is expected that an announcement on the effective date will be submitted to the Legislative Council in the second quarter of 2026. It is reported that with wide market support and close cooperation with the Hong Kong Exchanges and Clearing Limited and the Hong Kong Securities Registrars Association Limited, the main work related to the implementation of the paperless securities market has been steadily progressing in the past year and has now entered the final stages. The major progress made so far includes: The systems and processes related to the paperless securities market at the Hong Kong Exchanges and relevant share registries have entered the later stages of development and testing. Market participants will be invited to participate in testing in the coming months. The Securities and Futures Commission has reviewed and approved the revisions made by HKEX to multiple rules and operational procedures for the implementation of the paperless securities market, and HKEX will announce the details later. HKEX and the Securities Registrars Association have updated their respective information documents related to the paperless securities market, including major fee adjustments under the new system. The relevant documents will also be released later. The Securities and Futures Commission is currently reviewing applications from six members of the Securities Registrars Association seeking to become approved securities registration agencies. Information on the status of these applications will be released on the Commission's website in the coming weeks. In order to provide a deeper understanding of the new system and its implications to the market, multiple documents have been published and briefings have been held. This work will continue before and after the implementation of the paperless securities market. Mr. Leung Chung Yin, Executive Director of the Market Surveillance Department of the Securities and Futures Commission, said, "The implementation of the paperless securities market system will further enhance our financial market infrastructure, providing investors with more options, simplified procedures, and more opportunities for straight-through processing. We now have a clear timetable to implement this important measure. In the coming months and beyond, we will continue to work with HKEX and the Securities Registrars Association to ensure the smooth introduction of the new system and enhance public understanding of the new system." After the implementation of the paperless securities market, newly listed securities will be required to be issued in paperless form from the time of listing. As for securities that were already listed before the implementation date, issuers will gradually be included in the paperless securities market system within five years. Issuers and the market will receive advance notice of these arrangements. Investors holding share certificates can flexibly choose when to convert their shares into paperless form. The Securities and Futures Commission encourages intermediaries to continue to work closely with HKEX to prepare for the paperless securities market. Given that the existing nominee holder structure in the Central Clearing and Settlement System (Central Clearing System) will be retained, there will only be limited changes to the processes of depositing and withdrawing securities from the Central Clearing System, with the most significant being the transition to paperless securities. These changes, along with the revised fees, may require intermediaries to make certain adjustments to their business models, operations, and client and other documents. Intermediaries should expedite the necessary preparations to ensure readiness for the new system when it comes into effect in November. The Securities and Futures Commission will continue to update its dedicated webpage for the paperless securities market to keep the market informed of the latest developments, and HKEX and the Securities Registrars Association will continue to publish information documents and hold briefings for stakeholders.