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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.