The London Stock Exchange and Hong Kong Exchanges and Clearing Limited (HKEx) are holding talks to allow companies to list in both Hong Kong and the United Kingdom. The exchanges also plan to trade HKEx stocks on the Sets trading system and LSE stocks on AMS/3.
According to the two exchanges, discussions on these projects started earlier this year. Both exchanges will now meet with their market participants to seek their views on the proposed trading arrangements.
A listing facilitation programme is being developed to enable companies listed on one exchange to list on the other through a streamlined process. The programme is designed to attract companies seeking greater access to the capital markets in Europe and Asia.
The trading collaboration will aim to provide HKEx and Exchange customers with the opportunity to trade liquid securities from both markets on local electronic systems in local trading hours, say the exchanges. Securities transactions would be cleared in the local market and settled in the securities settlement system in either Hong Kong or the United Kingdom.
If a sufficiently attractive business case can be developed with market participants, the exchanges would seek to introduce the trading collaboration in 2003. These proposals will be subject to regulatory approval.
Clara Furse, LSE chief executive, says: "It is natural for us to explore ways to extend our reach across time zones. I believe by pooling the strengths of Hong Kong and London, investors and issuers will find the two marketplaces an essential part of their global financial map."
K C Kwong, chief executive of the HKEx, comments: "This collaboration will be beneficial to both exchanges, our market participants and shareholders. It will broaden our customer base, diversify our product range and provide additional value-added services to customers across a broader geographical area."