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HONG KONG EXCHANGES AND CLEARING LIMITED 香港交易及結算所有限公司




An aerial tour of HK's monopolies and anti-competitive practices
The slides from a presentation by Webb-site founder David Webb to the Asian Competition Forum at Polytechnic University this morning. When you get to slide 30, click the box to launch the online video. (9-Dec-2014)
HK Govt proposes to exempt HKEx and subsidiaries from competition law
HK Legislative Council, 24-Nov-2014
Comment: this is outrageous. There is no reason why the stock and futures exchanges, and their clearing houses, should be exempt from the law. These are commercial activities and HKEx should not be allowed to defend their monopolies with anti-competitive practices. HK Govt owns nearly 6% of HKEx.
Webb-site CCASS Analysis shows HK through-train holdings and changes
The CCASS data shows total positions held by mainland investors on the through-train from Shanghai, which are all held through China Securities Depository & Clearing. Settlement dates are 2 days after trade dates. Click the column-headings to sort. Click "Changes" to see the daily movements. (23-Nov-2014)
Submission to HKEx on Weighted Voting Rights
Webb-site calls on HKEx to keep 1-share-1-vote and not to introduce second-class shares or allow companies to install trapdoors in their articles of association. We also launch a petition - please sign it if you agree! (21-Nov-2014)
HKEx signs MoU with CCB (0939)
Company media release, 15-Sep-2014
This MoU, for "strategic cooperation" again puts HKEx into a conflict of interest with its role as listing regulator of CCB, as it has done with China Minsheng Banking (1988). The SFC should take over as listing regulator of both banks.
The ruling: LME is an organ of the UK Government, and was not engaging in "commercial" activity
US Court: Southern District, New York, 25-Aug-2014
The judge grants sovereign immunity and says: "Whether the LME manipulated its load-out rules to make more money is irrelevant to whether it was a 'commercial' activity as defined".
Minsheng tax grab, HKEx conflicts
Minsheng Bank (1988) just grabbed RMB115.6m from H-share holders and paid it to the Government with no good reason. We explain why bonus share issues by PRC issuers are not just silly but damaging to shareholder value. We also look at the conflict of interest for HKEx, which recently signed a strategic MoU with Minsheng and is pursuing relationships with other banks while acting as their listing regulator. The SFC should now take over regulation of these listings, but has declined to do so. (30-Jun-2014)
HKEx (0388) and China Minsheng Bank (1988) sign MOU.  Listing Rules Chapter 38
Company media release, 23-Apr-2014
Comment: now that HKEx is in business with Minsheng Bank (1988), it should stop being the listing regulator of that company and the SFC should take over, under the conflict of interest provisions of Listing Rule 38.16. The SFC is already the listing regulator of HKEx.
Give public access to ALPs
We need your help! The SFC is proposing to ban retail investors from accessing Alternative Liquidity Providers, which could provide faster and better execution than just placing the order with SEHK. Webb-site urges the SFC to give the public the same options that institutional investors enjoy. They almost did with HSBC's ill-fated Stockmax. We also urge the Government to abolish SEHK's statutory monopoly and allow competition to drive down fees and innovate. (15-Apr-2014)
Survey on Alibaba & non-standard shareholding structures
Asian Corporate Governance Association, 15-Apr-2014
Managers of over US$14tn respond that if HK allows non-standard shareholding structures then it can expect a discount of 13% to be applied to the market.
Why did the SFC kill HSBC's Stockmax?
Two years after the SFC shut retail investors out HSBC's automated trading system, an SFC announcement gives some indication of what happened, but still leaves retail investors wondering why a pioneering service which offered potential price improvement and competition for HKEx's monopoly stock market was not allowed. (20-Dec-2013)
We had a dream too!
Following the hallucinations in HKEx non-elected director and CEO Charles Li Xiao Jia's blog yesterday, Webb-site had a dream last night! (26-Sep-2013)
Alibaba's spotlight on HK regulation
10 years after the Expert Group report, Alibaba's requests spotlight the unresolved conflict of interests of HKEx between profit and regulation, creating an opportunity for Government to put this back on the agenda. They should now follow through, strip HKEx of its regulatory role, create a Listings and Takeovers Authority under the SFC, and remove the special provisions of HKEx's own constitution which make it a Government-controlled company. (18-Sep-2013)
HKEx announces appointments to various Committees
Company media release, 25-Apr-2013
None of the 5 directors on the ESG Committee was elected by shareholders. Only 1 of the 5 directors on the Remuneration Committee was elected by shareholders. Only 1 of the 6 members of the Listing Nominating Committee (which appoints the Listing Committee) was elected by shareholders. The rest are Government-appointed.
Low turnout at HKEx (0388) AGM
Company announcement, 24-Apr-2013
Only 30.52% of eligible shares were voted, presumably including the 5.80% owned by the Government. So only 26.24% of eligible non-Government shares were voted. Perhaps institutions have already voted with their feet.
HKEx chief calls for muddier water in China
Company web site, 2-Apr-2013
Charles Li of HKEx (0388): in China, "there is very little flexibility, if any, for broker-dealers to move funds across client accounts, let alone embezzle funds or engage in other malpractice...there is no incentive for financial institutions to innovate". At Webb-site, we think that embezzlement of client funds and other malpractices are the kind of innovative broking we can do without. Does he also think that more listed company disclosure would reduce the potential for "innovative" insider dealing by making the water "too clean"?
Hopewell Highway's RMB shares (80737) drain to HKD counter (737)
That sucking sound you hear is the noise of Hopewell Highway's RMB-traded shares (80737) draining away as people convert them to the HKD-traded counter (0737). After 6 days, 15% of the stock in CCASS has moved to the other counter. This is the first RMB-traded ordinary share, and it underlines the pointlessness of trading with a non-convertible currency in an international market like HK. (6-Nov-2012)
HKEx's new "Chief Regulatory Officer"
Company media release, 8-Oct-2012
Comment: the Head of Listing is a key regulatory role and should be a full-time job. We don't see how one person can be both Head of Listing and also carry responsbility for the regulatory, legal and compliance functions of all the other businesses in HKEx, including the HKFE futures exchange, 3 clearing houses (options, futures, stocks) and soon, an overseas commodity exchange. Some clarity is needed.
HKEx RMB equity Trading Support Facility seeks a reason to exist
Company media release, 30-Jul-2012
Having had found no companies willing to do an RMB IPO in HK (and who would be?), HKEx extends its forex system to the only REIT and the only ETF currently quoted in RMB.
At last, HKEx confirms it is involved in the LME bidding process
Company announcement, 30-Apr-2012
This follows a complaint by Webb-site to the SFC on 25-Apr that despite extensive leaks and a slump in the share price since the first leak on 18-Feb, HKEx had failed to issue any announcement under Listing Rule 13.09(1) regarding its involvement in the LME process.
HKEx preps for placing
Apart from seeking a steep pay hike, the HKEx board is seeking to double its mandate to issue shares for cash without a rights issue, at double the discount of last year's mandate. Couple that with the leaked bid for the London Metal Exchange, and you can see where this is going. We urge shareholders to protect their rights by voting down the general mandate. If HKEx proceeds with LME (and we query why), then a rights issue can fund it. (15-Mar-2012)
HKEx's yuan-denominated gaffes
Yesterday's comments by HKEx's CEO indicate a fundamental misconception driving its obsessive attempts to price its products in a currency which is not freely convertible. (20-Jan-2012)
Francis Kwan Hung Sang v HKEx
HK Court of First Instance, 12-Dec-2011
Donald decrees: HKEx will move
A little-noticed paragraph of the recent Policy Address dictates that HKEx will move to the offices to be developed on the site of the West Wing of the Central Government Offices. What does this say about the Government's attitude to HKEx? (14-Nov-2011)
HSBC's StockMax becomes StockMin
It was a false dawn for retail investors - the SFC has caved in to pressure and amended the license conditions of HSBC's Stockmax Crossing platform to restrict it to "professional investors" only. History will prove them wrong. (14-Aug-2011)
StockMax and competition for HKEx
We look at the implications of HSBC's proposed StockMax dark pool with retail investor participation. It's a wake-up call to the Government, SFC and HKEx that we need to move forward with allowing competition to innovate services both inside and outside HKEx. We propose measures to achieve this while preserving fair and orderly markets. (7-Aug-2011)
Reforming HK Markets - the Political Realities
A presentation by David Webb to the FIX Protocol conference. (25-May-2011)
LCQ: the competitiveness of the Hong Kong stock exchange
HK Government, 6-Apr-2011
Comment: nothing prevents a "flash crash" in HK, and indeed we had a mini-version of this in HSBC on 9-Mar-2009. There are no circuit-breakers on SEHK. Regarding trading spreads, HKEx U-turned on that in 2007 and there has been no progress since then.
HKEx adopts VAMPIRE mandate
Webb-site is pleased to note that HKEx, seeking its first general mandate in 7 years, is now complying with VAMPIRE limits of 5% issued for cash and a maximum 5% discount. Having set an example, SEHK should now amend the Listing Rules and bring the market up to international best practice. HKEx has also unbundled amendments to the Articles of Association, and is not repeating last year's fiasco. (29-Mar-2011)
Response to SEHK on Corporate Governance Consultation
Webb-site publishes a detailed response to the Exchange's consultation on the corporate governance rules and code, including recommendations for fundamental reform and the results of the opinion poll on INEDs. (25-Mar-2011)
HKEx welcomes iBonds, hopes to list them
Company media release, 23-Feb-2011
It would be nice if the bonds were actually admitted to CCASS and traded on the stock exchange, rather than the phoney "listings" that all the existing Government bonds have, where there is no trading on HKEx and retail investors are held captive by the banks in the over-the-counter market.
The three wise monkeys of HK boards
SEHK has proposed minor reforms to the composition of boards which completely miss the core issue - INEDs are only as independent and competent as the controlling shareholder wants them to be, as long as he or it votes on the INED elections. We call for independent directors to be independently-elected. Tell us what you think!. Read our article and then take our poll on INEDs. (15-Feb-2011)
Truly pointless bonus issues and splits
Why do boards propose bonus issues and stock splits? We look at the drawbacks and the false and misleading reasons often advanced for such actions. If liquidity is really a concern, then a reduction in board lot size is the simplest and best way to go. Splits and bonuses are more a sign of desperation than of a sophisticated, value-focused board. (27-Dec-2010)
HKEx screws up voting at Hang Lung Properties (0101) AGM.  CCASS analysis
HKEx, 4-Nov-2010
HKSCC is owned by HKEx and operates the Central Clearing and Automated Settlement System (CCASS). Looking at the Webb-site CCASS Analysis, we can see that the 873.982m missing votes exactly matches the number of shares held by subsidiaries of Hang Lung Group Ltd (0010) in their Investor Participant accounts. Ironically, HKEx Chairman Ronald Arculli has been an INED of HLP for 30 years.
Trading hours poll results
We analyse the results of the Webb-site opinion poll on trading hours, which will be submitted to HKEx today. The results favour a trading day from 09:30 to 16:30 with a 1-hour lunch break. (27-Oct-2010)
Hong Kong's broker siesta
We need your help! Read our article on the debate over HK stock exchange trading hours, and then take our opinion poll. The results will be submitted to HKEx, without names. (14-Sep-2010)
Arculli's rant against competition for HKEx
The HKEx Chairman has apparently launched a campaign to exempt it from the Competition law currently going through LegCo. We dissect his factually flawed and technophobic arguments. Investors in HKEx should not expect its monopolistic profit margin to continue forever. Let the competition begin. (29-Jul-2010)
Shareholders veto HKEx resolution
Following our recommendation, Webb-site.com is pleased to note that investors have sent a clear message, voting by 70.2% against a proposal to allow the company to bypass board meetings and pass resolutions with a simple majority of signatures. We now call on HKEx to make this right by amending the Listing Rules to prohibit such articles, which would weaken corporate governance. (22-Apr-2010)
HKEx responds to criticism of proposed resolution
Company media release, 12-Apr-2010
Comment: Webb-site.com affirms its recommendation to vote against item 7. Contrary to HKEx's suggestion, it is not a "common provision" to allow a simple majority of directors to approve things without a board meeting, nor should it be. And once resolved, a lot of things cannot be undone, including the approval of contracts which are then signed and legally binding.
HKEx AGM: veto item 7
We urge shareholders of HKEx (0388) to veto a proposed change to the Articles of Association which would damage good governance and facilitate the stifling of dissenting views. We speak from first-hand experience. HKEx is setting a bad example to the companies it regulates, and the rot should stop now. In passing, we also cast an eye on the ongoing CITIC Pacific case. (11-Apr-2010)
Statement regarding the shares of Asian Citrus
HKEx, 26-Nov-2009
There you go, they DO comment on individual cases. Occasionally.
Moses Cheng's appointments
A Government press release claims his appointments comply with the 6-board rule - but we count 8 - and a 9th was quietly dropped. He also finds time to hold down 10 other non-executive directorships. (19-Jul-2009)
No futures for foreigners - SFC
The SFC, under pressure from vested interests, has put on indefinite hold proposals to allow remote participants (overseas brokers and traders) in HK's futures market, leaving it looking protectionist and backward. (11-Jul-2009)
Bob Bunker runs for HKEx Board
Webb-site.com is pleased to announce that Bob Bunker has accepted a nomination to run in the contest for election as a director of HKEx. Two board seats are available. We recommend shareholders vote in favour of Mr Bunker and incumbent director Mr Bill Kwok Chi-piu, and against all other candidates. We also update you on the Ocean Grand case. (31-Mar-2008)
Intervention Returns
We look at the HK Government's surprise disclosure of 5.9% of HKEx, where it might go next, and how it quietly scrapped a 5% benchmark on the Exchange Fund weighting in HK stocks, leaving it as the 2nd-biggest investor after the mainland Government. With about HK$1 trillion of surplus liquid assets, whatever happened to Donald Tsang's "big market, small government"? We call on the Government to return its surplus capital to the people with a 10-year program of deliberate budgeted deficits. (10-Sep-2007)
Results of AGM
Company announcement, 26-Apr-2006
Loh Joins Webb in Run for HKEx Elections
MEDIA RELEASE: Webb-site.com is pleased to announce that Christine Loh, Chief Executive of Civic Exchange, has accepted a nomination to run for election as a director of HKEx, increasing the representation of investor interests on the board of HKEx. (7-Apr-2006)
Hong Kong's casino
Never mind Lantau, Hong Kong does have a fully operational casino with a legally protected monopoly. We comment on the M-chip craze and the hypocrisy that permits the public to take risks in the markets and on property, but prohibits risk-taking in other forms of gambling outside of the Jockey Club monopoly. We call for liberalisation of the gambling sector. (24-Nov-2004)
Time to Close the Floor
It's been nine years in the making, but trades which touch the floor of the Stock Exchange have now dwindled to 3% of market volume, and the lease expires on Halloween 2005. It is time to close the floor and celebrate the fact that we have an electronic order-driven market rather than a living museum. Anyone for go-karting? (12-Oct-2004)
Almost No Mandate
The tide is turning in Hong Kong's battle for pre-emptive rights. In a close shareholder vote, the board of HKEx almost lost its general mandate to issue new shares, by asking for a 20% cash mandate, against the recommendations of Project Vampire. And this is the company whose subsidiary makes the Listing Rules which allow such mandates in the first place. Things weren't much better over at Bank of East Asia, either. (5-Apr-2004)
Results of AGM
Company announcement, 31-Mar-2004
HKEx voting recommendations
At last year's AGM, Webb-site.com editor David Webb was elected to the board of HKEx on a shareholder nomination, a first for a HK-listed company, we think. Now we give you our voting recommendations for the 2004 AGM, and the reasons. (14-Mar-2004)
HKEx AGM Shake-up
We look back on an eventful evening on the floor of the Hong Kong Stock Exchange, as shareholders seized their first chance to shake up the board of HKEx, electing the first investors, including Webb-site.com editor David Webb, to serve on the board, and rejecting 5 out of the 8 broker candidates, 3 of whom were incumbent directors recommended by the board. (16-Apr-2003)
Shareholder activist joins H.K. bourse
International Herald Tribune, 16-Apr-2003
Full Voting results at 2003 AGM
Company web site, 15-Apr-2003
Partial voting results at 2003 AGM
Company media release, 15-Apr-2003
HKEx should adjourn the AGM
Yesterday HKEx announced 3 new candidates for elections at next Tuesday's AGM, leaving practically no time for institutional shareholders to respond before their custodians close the voting window. Two of the candidates are backed by broker associations, who already have 4 members on the board. We call on the Chairman, if he believes in corporate governance and shareholder equality, to adjourn the AGM for 14 days to allow all shareholders time to submit new voting instructions on the elections. (9-Apr-2003)
Disserving the Public Interest
HKEx, having announced a commitment to co-operate with Government's adoption of the Expert Group's plan to shift its regulatory role to the SFC, is now fighting it. We sat down last Monday with Charles Lee, who said that HKEx was obliged to put the public interest first and co-operate with the Government's proposal. Now he has done a U-turn. Did HKEx make a false and misleading announcement? And what about dictum meum pactum? (31-Mar-2003)
HKEx voting recommendations
The race is on, and we need your help. If you own shares in HKEx, and want a better-run market, then you should elect an HKEx board which for the first time includes investor representatives. Vote for David Webb and Oscar Wong and against the incumbent broker-directors at the AGM. Vote now! We also urge investors to vote against the new issue mandate and support Project Vampire. (28-Mar-2003)
Ex-City man's sights on Hong Kong
London Evening Standard, 19-Mar-2003
HKExciting!
Webb-site.com announces the candidacy of David Webb for directorship of HKEx, which is holding its first elections after almost 3 years of listing, or listlessness, depending on your view. Under its unique constitution, only 6 out of 13 directors can ever be elected. This may also be the first time a shareholder has nominated a director at the AGM of a HK-listed company. Please support us, and help make a more representative board at HKEx! (17-Mar-2003)
Listing Chaos
We review a chaotic month on the Government policy front in general and the HKEx in particular, and look at the broader issues surrounding the current proposals, or rather the lack of them. Merging two issuer-dominated Listing Committees together will not address the needs of investors, while the Government ducks the real problem of having a for-profit toothless regulator rather than SFC regulation and statutory backing for the Listing Rules. (28-Jul-2002)
HKEx to Merge with Jockey Club
In another scoop, Webb-site.com has learned of secret plans to merge the HKEx and the Jockey Club, capitalising on the obvious synergies of the casino-like stock market and the broad gambling customer base of the Jockey Club. The move has implications for the MPF as well as the battle against offshore football betting. Read our exclusive story... (1-Apr-2001)
SEHK hit over data access
HK Standard, 20-Sep-1999
Former investment banker calls for central information warehouse for listed firms.
Terms of Engagement
Terms of engagement have now been agreed between the Hong Kong Stock and Futures Exchanges. In this article, for the first time Webb-site.com shows you what the combined profits and earnings per share of the HKEC have been. This deal is so sweet that almost nobody will accept the partial cash alternative of $3.88 per share. We tell you what the shares are really worth, particularly in the absence of effective tariff controls - you will be amazed! (6-Aug-1999)
Icing on the Cake
In the latest development in the proposed merger of the Hong Kong Stock and Futures Exchanges, it has been suggested that HKEC will underwrite the value of trading rights by offering to buy them back from brokers, in addition to giving them shares in the new company. We explain how future technology will create a surplus of trading rights, and that HKEC will end up buying something that nobody else wants. We argue the case for nationalisation of the exchanges. (26-Jul-1999)
Government Concessions Widen Value Gap
The Hong Kong exchanges are at loggerheads over their merger valuations, with a key sticking point being the value of HKSCC. The Government is responsible for this, having made a U-turn on its earlier position that HKSCC should not be attributed any value. This is one of a series of concessions they have made in an effort to avoid a showdown with small brokers. We take you through the valuation debate and the wider issues discussed in the latest policy paper. (13-Jul-1999)
Serving the Public Interest?
With the negotiations on the proposed merger and flotation of the Stock Exchange and Futures Exchange slowly inching their way forward, we take another look at the inevitable problems that are created by floating a monopoly which on the one hand has a duty to maximise returns to its shareholders while on the other is supposed to serve the public interest. (14-Jun-1999)
Flotation of Exchanges not in the Public Interest
Why the HK Government's proposal to merge the stock and futures exchanges is commendable, but the proposal to float the merged entity is against the public interest. (3-Mar-1999)
Consultation on a proposed new listing status
SEHK, 9-Sep-1991
This document was catalysed by a request from the Jardine Matheson Group to have a trading-only listing in HK after it shifted its Primary Listing to the UK, even though most of the trading volume was expected to remain in HK. Ultimately SEHK did not proceed with the proposal, and the 5 Jardine companies moved their primary listing to the UK. HK became a secondary listing but the group in 1994 delisted from HK.

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