Editorial:Typhoon Trading Finally Decided On

【明報專訊】The arrangements regarding stock trading during typhoons and other severe weather conditions have been finalised at last and will officially take effect from 23 September this year. In order to reinforce Hong Kong's status as an international financial centre, the city must move with the times and enhance its competitiveness. Across the globe, rarely does a major stock market shut down due to severe weather like in Hong Kong. With the advanced information technology of today, stock trading is mostly done online, and technically, remote operations would not be too difficult. Stock trading in Hong Kong should have kept up with the mainland and international markets long ago.

Discussions on continuing trading during severe weather have lasted for a long time, and there is no reason why a decision should not be made as a result. A preparation period of about three months is already more than sufficient. If individual small-sized brokers are unable to solve problems like remote operations in time, the authorities can provide them with technical support. However, it must also be pointed out clearly that if they still fail to keep up with the times, they will only become obsolete.

Since 2018, the Hong Kong stock market has suspended trading due to severe weather 11 times in total. Last year alone, that happened four times, of which three suspensions were for the whole day. In 2021, the then Hong Kong Exchange (HKEX) CEO Nicolas Aguzin frankly expressed his bewilderment at the closing of Hong Kong stock trading because of the black rainstorm signal. He remarked that the global finance industry was already used to working from home amid the pandemic, and Hong Kong should leverage what it has learnt to keep the stock market operating. Last November, the authorities launched a three-month consultation exercise, and the results showed that brokerage firms representing 90% of all market trading supported keeping the stock market open during severe weather.

HKEX said that the new arrangements will take effect from 23 September. Trading of Hong Kong stocks will be maintained regardless of a black rainstorm signal or a typhoon signal number eight or above. During that time, brokers will not provide services at physical outlets, and investors can use online trading and bank services.

At the beginning of the plan's implementation, if some small or medium-sized brokerage firms cannot arrange for their staff to work remotely during severe weather, they can apply for assistance from the authorities. HKEX will temporarily fulfil settlement and clearing obligations for qualified brokerage firms on the day with severe weather. However, they will be subject to trading restrictions and will not be able to increase the position size. This special arrangement will be available until the end of this year.

Hong Kong is a modern, cosmopolitan city. Even in adverse weather conditions, many industries will try to keep operating as far as circumstances allow. After three years of the pandemic, many companies and employees are fairly used to working from home. Nowadays, stock trading is already highly digitalised. Investors can buy and sell stocks using a mobile phone or a computer, and brokers do not necessarily have to go to the office for work. Not only is the traditional practice of market suspension during severe weather outdated, but also out of touch with the world.

Across the world, major financial markets rarely halt trading because of severe weather. Places like New York, London and Singapore certainly have no such practice. Even on the mainland, in Shenzhen and Shanghai, where typhoons also hit, stock markets do not close for this reason. As the connection between Hong Kong and mainland stock markets continues to deepen, if the markets on the mainland operate normally while the Hong Kong market halts and fails to match up, it will pose inconveniences to local, mainland and international investors.

明報社評 2024.06.19:打風不停市終有定案 看齊國際須與時並進








/ Glossary生字 /

obsolete:no longer used because sth new has been invented

bewilderment:a feeling of being completely confused

halt:to stop; to make sb/sth stop

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