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The operator of Hong Kong stock exchange is to launch an initial public offering (IPO) settlement platform that will shorten the time between the pricing of a new listing and the trading of shares.
"FINI", which stands for Fast Interface for New Issuance, is set to launch in October, and will cut the time between IPO pricing and commencement of trade from five business days to two, Hong Kong Exchanges and Clearing (HKEX) said in an announcement on Wednesday.
Operating on a cloud-based platform, FINI will enable different IPO stakeholders such as sponsors, underwriters, legal advisers, banks, clearing participants, share registrars and regulators to collaborate and perform their respective roles in an offering digitally in real time.
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A shorter settlement time should free up capital, ultimately helping bolster the city's IPO market.
"By shortening the time between IPO pricing and the start of trading, [we can] enhance market efficiency and strengthen the competitiveness and attractiveness of Hong Kong's IPO market," said HKEX chief executive officer Nicolas Aguzin.
The new system will 'enhance market efficiency and strengthen the competitiveness' of Hong Kong's IPO market, said HKEX boss Nicolas Aguzin. Photo: Elson Li alt=The new system will 'enhance market efficiency and strengthen the competitiveness' of Hong Kong's IPO market, said HKEX boss Nicolas Aguzin. Photo: Elson Li>
Aguzin said FINI's development had "received strong support from market stakeholders, demonstrating the widespread appetite for progressive innovations in the Hong Kong IPO market".
The settlement platform will "modernise and digitalise Hong Kong's IPO settlement process, driving efficiency and supporting the long term development of Hong Kong as a capital-raising centre," HKEX said in a statement.
The exact launch date of FINI will be subject to "market readiness", it said.
The HKEX finished testing the new system earlier this month. It will arrange market practice sessions and rehearsals in July and August to simulate interactive, end-to-end IPO settlement operations under FINI, according to the announcement.
"FINI will allow different stakeholders ... to utilise a more modernised platform with real-time information reflected at all times. It will streamline many processes," said Robert Lee Wai-wang, the lawmaker for the financial services sector and CEO of local brokerage Grand Capital Holdings.