HKEX Enhances Designated Specialist Programme for Exchange Traded Products

HONG KONG,Jan. 7,2019 -- On Jan. 2(Wednesday),Hong Kong Exchanges and Clearing Limited (HKEX)enhanced the Designated Specialist (DS) programme for its Exchange Traded Products (ETPs),which include Exchange Traded Funds (ETFs) and Leveraged and Inverse (L&I) Products,to permitgloballiquidity providers that are not its Securities Market Makers (SMMs) to participate in ETP market making activities.

With expanded eligibility criteria and a more flexible structure,the enhanced DS programme opens up new opportunities for non-SMMs to enter Hong Kong's growing ETP market while increasing the range of potential liquidity providers.

Brian Roberts,HKEX's Head of Exchange Traded Products,said: "The enhancement to the DS programme allows non-SMMs to expand their market making presence in Asia and further deepen the liquidity pool in Hong Kong ETPs. This is an important step in providing investors a globally competitive ETP marketplace in Asia."

To become a DS,participants must be a corporate client of an SMM and satisfy at least one of the following conditions:

(i)it is an entity licensed by or registered with the Securities and Futures Commission of Hong Kong (SFC) for Type 1 or Type 2 regulated activities under the Securities and Futures Ordinance,or licensed or registered for similar activity by an overseas authority having a memorandum of understanding with the SFC for the sharing of market surveillance information;

(ii)it is an entity which is a licensed bank regulated by an authority acceptable to HKEX;

(iii)it is an entity which has maintained a current long-term credit rating of A- or above (Standard & Poor's) or A3 or above (Moody's); or

(iv) it has maintained a paid-up capital of at least HK$50,000,000 and shareholders' funds of at least HK$100,000.

Further information on the DS registration process is available on the HKEX website.

In addition to the enhancements to the DS programme,the experience requirement as part of SMMs'eligibility for L&I Productsis removed with effect from today.

For details of the enhancements in the DS programme and the relaxation of the experience requirement for SMMs for L&I Products,please refer to the circular on the HKEX website.