China News Service, Hong Kong, November 11 (Reporter Wei Huadu) The Hong Kong Stock Exchange launched a new new IPO settlement platform FINI (Fast Interface for New Issuance, referred to as "FINI") on the 22nd, shortening the time from pricing to official listing of new shares from 22 business days to 5 business days.
FINI is a system for intermediaries, investment banks, brokerages, share registrars and regulators to jointly process IPO subscription and settlement in Hong Kong, enhancing the efficiency of IPO settlement processing. HKEX has completed a number of rounds of testing, mock practice and market exercises with IPO market participants on the FINI operation process.
It is learnt that the pricing of new shares will be carried out after the end of the subscription period of the public offering, and after the pricing, market participants need to deal with the procedures of share allocation, fund settlement and share delivery, which previously took 5 business days before the new shares can be officially traded, while FINI has streamlined and integrated this process to shorten the time to 2 business days.
According to HKEX, FINI allows investors to trade IPOs faster, reducing the cost of capital required to subscribe for IPOs and the potential risks associated with IPO price fluctuations. At the same time, a new prepayment model was introduced through FINI to help reduce the amount of funds locked in the event of oversubscription of new shares.
Wu Lixian, securities strategist of China Everbright Securities International Co., Ltd., said in an interview with China News Service: "Because FINI has shortened the time from IPO pricing to listing, the time for investors to occupy funds has also been shortened, so that investors with their own funds have more flexibility in handling funds, and those with loan funds can save interest costs." On the other hand, if the time between the pricing of an IPO and the listing time is too long, the IPO price will be significantly different from the listing price, and the shortening time will reduce the volatility of the IPO price. Listed companies have benefited from these factors, and I believe that FINI can increase the willingness of Mainland and overseas companies to IPO in Hong Kong. ”
Lau Tai Cheong, Partner, Capital Markets, KPMG China, believes that by digitalising the IPO settlement process, FINI will enable market participants and regulators to manage IPO settlement and obtain real-time information on the same cloud-based platform, thereby enhancing market efficiency and effectively reducing the risks faced by market participants from IPO pricing to listing. Promote its long-term development as a global fundraising hub.
The Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, Christopher Hui, previously said that after the implementation of FINI, the Securities and Futures Commission and the Hong Kong Stock Exchange will continue to closely monitor the management of client funds and public offering and lending activities by licensed corporations and registered institutions, and continue to assess relevant risks to maintain financial market stability. (ENDS)