Hong Kong Exchanges and Clearing Limited (HKEX) today announced the finalization of the operating model and arrangements that will enable Hong Kong’s securities and derivatives markets to remain open during adverse weather conditions.
HKEX plans to implement Severe Weather Trading (SWT) from 23 September 2024, subject to regulatory approval.
HKEX is today (Tuesday) publishing the conclusions of a consultation paper on the Proposal on trading in severe weather conditions in Hong Kong’s securities and derivatives markets.
HKEX will proceed with proposals to maintain trading, resale and listing arrangements in its securities and derivatives markets, including Stock Connect, holiday derivatives trading and after-hours trading, during a severe weather event.
In order to ensure safety, remote working and the use of online services are strongly encouraged on SWT day and no brick-and-mortar stores will be providing services. Some minor adjustments will be made to ensure the operational resilience of the market, as some services provided only through brick-and-mortar stores will not be available.
HKEX CEO Bonnie Y Chan said:
“Hong Kong markets will remain open and operational during severe weather conditions. This is an important step that will make Hong Kong markets always available to regional and international investors during trading hours, regardless of the weather, and underlines HKEX’s commitment to supporting Hong Kong’s resilience and competitiveness as a global financial center. class”.
“Staff safety remains a key priority: remote working capabilities and online banking and trading services will enable our markets to operate robustly and resiliently in difficult weather conditions. HKEX would like to thank the HKSAR government, financial regulators, market participants and other stakeholders for their constant support and valuable feedback that helps us deliver this critical market improvement. We look forward to continuing to work closely with our entire stakeholder community to facilitate safe, secure and reliable market operations during severe weather events,” added Ms Chan.
The Hong Kong Bankers Association and Hong Kong Interbank Clearing Limited have confirmed that, during severe weather conditions, banking services such as electronic funds transfer channels will be available from designated banks and settlement banks of the relevant HKEX clearing offices , in full support of clearing participant functions and money settlement requirements.
To allow small- and medium-sized brokers sufficient preparation time, HKEX plans to offer special arrangements to eligible participants who need assistance, for example by temporarily fulfilling margin payment or settlement obligations for these participants on a SWT day. These participants will be subject to trading restrictions on the SWT Day and will have to complete their outstanding obligations after the severe weather signals have abated. The above special arrangements will apply from the effective date of the SWT until the end of 2024.
HKEX’s trading, clearing, settlement and market data systems will be fully accessible over remote networks during severe weather conditions. HKEX has made improvements to its infrastructure and operational arrangements to reduce the need for physical access between participants and will organize test sessions ahead of the SWT launch to ensure the readiness of market participants and other relevant industry stakeholders . Investors are also advised to consult their brokers and banks regarding the availability of services during SWT.
In consultation with the HKSAR government, HKEX has recommended best practices for working arrangements in adverse weather conditions for employers and their employees. Certain clarifications have also been made in the conclusion paper in relation to market operations such as intraday SWT import, trading, clearing and settlement agreements.