HKEX Prepares New Platform to Speed Up IPO Process
What’s new: Hong Kong Exchanges and Clearing Ltd. (HKEX) is preparing to launch a new platform to simplify the initial public offering (IPO) process and improve IPO efficiency, local media reported.
The new platform, called “FiNI,” will deal with share issuance and settlement matters, aiming to streamline current IPO procedures and shorten the period between IPO pricing and listing of new shares.
The platform has been in preparation for some time, but a timetable for its launch is not available, according to the Hong Kong Economic Journal.
The exchange applied in June for the “FiNI” trademark. In response to a Caixin enquiry, the HKEX said it is studying ways to shorten the existing IPO process as part of ongoing efforts to enhance competitiveness of the Hong Kong IPO market.
The background: The HKEX has long contemplated overhauling the IPO pricing mechanism. In April 2019, HKEX CEO Charles Li said the goal is for issuers to eventually be able to start trading one day after IPO pricing.
Currently an IPO takes five days to settle in Hong Kong, a system known as “T+5,” while many markets in the U.S. and Europe enable trading within one day of the close of subscription.
Market participants say the gap between pricing date and first trading date cannot effectively reflect changes in investors’ sentiment and therefore affects the performance of new shares.
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