Uncertificated securities market regime – targeted for launch in November 2026

Regulatory Announcement and Implementation Timeline

On March 30, 2026, the Securities and Futures Commission ("SFC") confirmed the uncertificated securities market ("USM") regime is scheduled to commence on 16 November 2026. Following significant progress and collaboration with Hong Kong Exchanges and Clearing Limited ("HKEX") and the Federation of Share Registrars Limited ("FSR"), key implementation work streams are nearing completion. Market participants will soon be invited to test USM-related systems developed by HKEX and share registrars. Additionally, the SFC has approved necessary amendments to HKEX rules and operational procedures, which will be published shortly alongside updated Information Papers detailing key fee changes. Applications from six FSR members for Approved Securities Registrar ("ASR") status are under review, with status updates expected on the SFC website in the coming weeks.

Legislative Framework and Strategic Objectives

To enact the USM legislation, a commencement notice is scheduled for tabling before the Legislative Council during the second quarter of 2026. Mr Rico Leung, SFC Executive Director of Supervision of Markets, emphasized that the regime will enhance financial market infrastructure by expanding investor choice, streamlining processes, and facilitating straight-through-processing. The SFC maintains a clear timeline for this initiative and will continue coordinating with HKEX and the FSR to ensure a smooth launch while increasing public awareness and understanding of the new regulatory environment.

Operational Transition and Issuance Protocols

Upon implementation, all newly listed securities must be issued in paperless form effective from the date of listing. Securities listed prior to the launch date will be integrated into the USM regime gradually over a five-year period, with advance notice provided to issuers and the market. Investors holding physical share certificates retain the flexibility to determine when to convert their holdings into paperless form.

Intermediary Obligations and Operational Adjustments

Intermediaries are urged to collaborate closely with HKEX to prepare for the USM. While the existing nominee structure within the Central Clearing and Settlement System ("CCASS") remains unchanged, specific processes for depositing and withdrawing securities will be modified. These operational changes, coupled with revised fee structures, necessitate adjustments to intermediaries business models, operational workflows, and client documentation. Intermediaries must expedite their preparation to ensure readiness for the November implementation.

Fee Structure and Stakeholder Communications

The SFC will maintain a dedicated USM webpage for updates, complemented by information papers and briefings from HKEX and the FSR. Fee changes include (i) depository and nominee fees charged by HKEX to market participants, approved by the SFC under section 76 of the Securities and Futures Ordinance following feedback received in 2025 and 2026; and (ii) fees charged by Approved Securities Registrars ("ASRs") to registered holders, subject to limits set by the SFC following a 2025 public consultation. Details regarding fee levels for securities in or deposited into the CCASS will be incorporated into forthcoming information papers. Background materials, including operational arrangements and technical documents, were previously released by HKEX and FSR in 2024.