The HKD-RMB Dual Counter Model will launch on 19 June 2023. HKEX is now accepting applications for Dual Counter Market Makers.
HKEX (Hong Kong Exchanges and Clearing) has announced that it will launch the HKD-RMB Dual Counter Model and the Dual Counter Market Making Programme in its securities market on 19 June 2023, subject to market readiness.
HKEX announced the introduction of the new HKD-RMB Dual Counter Model and the related market-making programme in December – to support the listing, trading and settlement of RMB-denominated securities in Hong Kong.
Under the Model, investors will be able to interchange securities listed in both HKD and RMB counters. Securities under the two counters are of the same class and holdings of securities in the two counters can be transferred without change of beneficial ownership.
In the initial stage, only market makers and Hong Kong and international investors will be able to trade RMB shares listed in Hong Kong. The model will be expanded to mainland Chinese investors at a later stage through the Stock Connect schemes.
“The new Dual Counter Model is another key milestone in the development of Hong Kong’s capital markets,” HKEX chief Nicolas Aguzin said in a statement on Friday (19 May).
“It will give issuers and investors more choice, it will enrich Hong Kong’s RMB products ecosystem, cementing its role as the world’s leading offshore RMB hub, and it will support the ongoing internationalisation of the RMB.”
Also on Friday, HKEX published relevant rule amendments and a set of FAQs for the introduction of the Model and the Dual Counter Market Making Programme.
Interested Exchange Participants may now apply to become a Dual Counter Market Maker for eligible securities under the Model in accordance with the relevant rules. Stamp duty is waived for market makers of the dual-currency counters.
The Dual Counter Market Makers will offer buy and sell quotes for the RMB-denominated securities trading, providing liquidity in the RMB counter and minimising price discrepancies between the HKD and RMB counters, HKEX said.
The initial list of Dual Counter Securities and Dual Counter Market Makers will be announced in due course.
As part of the preparation for the launch, HKEX has arranged a series of testing and practice sessions between May and June to support market participants on the trading and settlement of securities under the Model.
Alibaba, Anta Sports Products, Kuaishou Technology, Tencent, New World Development, Ping An Insurance, AIA, BOCHK, JD.com, Lenovo, CNOOC, Sun Hung Kai Properties, China Resources Beet, Xiaomi, NetEase, Meituan and HKEX itself are among the companies that have indicated they would launch an RMB counter for their stocks.
The more than 20 listed companies that have applied for an RMB counter represent almost 40 percent of Hong Kong’s market turnover.