HKEX chief: AI to speed IPO reviews, shorter settlement cycle 'global trend'
Hong Kong Exchanges and Clearing (HKEX) chief executive Tse Ting-yu said the bourse will use artificial intelligence to speed up initial public offering (IPO) reviews as a large number of new listings queue up. She also described shortening the stock settlement cycle from T+2 to T+1 as a global tren
The chief executive of Hong Kong Exchanges and Clearing (HKEX), Tse Ting-yu, has said the bourse will use technology, including artificial intelligence (AI), to improve efficiency in handling a large number of new listing applications. Speaking on RTHK's programme "Broadcast Way Guest Room", she stressed that while many new initial public offerings (IPOs) are queuing up for listing in Hong Kong, the exchange will not compromise on the quality of listed companies.
To cope with the workload from the influx of new listings, Tse said HKEX will recruit more staff and deploy technology, including using AI in the listing division to screen whether new listing applicants meet all disclosure requirements. The exchange and the Securities and Futures Commission (SFC) have committed to completing their review within 40 business days and two rounds of regulatory comments, provided the listing applicant's materials are ready. For companies already listed on the A-share market in mainland China, the process can be compressed to 30 business days and one round of comments.
Tse said these service commitments are largely being met. Last year, Hong Kong regained the top spot globally for IPO fundraising, which she said reflected the effectiveness of these measures. The exchange will continue to find ways to improve work efficiency and enhance the user experience for companies seeking to list in Hong Kong.
Regarding the proposed shortening of the spot market settlement cycle from "T+2" to "T+1", Tse said a thorough market consultation has been conducted. HKEX's internal review concluded that Hong Kong has the capability to implement the change, but it must ensure all market stakeholders can adapt. She said the exchange will announce supporting measures when it publishes the consultation conclusions to help the industry adjust.
Tse described shortening the stock settlement cycle as a global trend, but noted that consideration must be given to the working capital needs of investors who borrow stocks, as well as the foreign exchange needs of overseas investors. She said she hopes to provide more support when implementing the measure to help the market complete each transaction step within a shorter timeframe.
On the possibility of 24-hour trading for Hong Kong stocks, Tse said the trading system needs time windows for updates and maintenance, and the exchange must carefully consider the matter to ensure operations are error-free. She suggested that the spot market and derivatives market could be treated differently. For example, the derivatives market could extend its closing time from 3am to 4am or 5am to cover US stock trading hours, while the spot market would require analysis of the potential impact on different types of market participants, including retail investors and mainland Chinese investors participating in the stock-connect schemes.