【Paperless Securities】USM to Implement This Year - HKEx, SFC, and Financial Secretary Explain the Advantages and Benefits for Investors

Hong Kong Financial Market to Reach a Milestone in Digital Transformation!
The Uncertificated Securities Market (USM) system will be launched within this year and is planned to be implemented in phases over the next five years. This reform aims to enhance Hong Kong’s financial infrastructure and strengthen its competitiveness and operational efficiency as an international financial center.

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What is the Uncertificated Securities Market (USM)? How does it benefit investors?

Hong Kong Securities and Futures Commission (SFC) Executive Director Brian Li Cheung-yin pointed out that USM is a core initiative to improve Hong Kong’s financial infrastructure. After implementation, most new stock IPOs will be issued electronically, and already listed stocks will follow gradually.

Three major advantages for investors:

• Direct ownership rights: Investors can hold securities electronically in their personal name.

• Simplified and automated processes: Digital workflows reduce manual handling, greatly improving efficiency.

• Shorter transfer times: Future stock transfers or custody will be significantly faster, making capital utilization more flexible.

  		▲ SFC Executive Director Brian Li Cheung-yin states that USM is a core measure to improve Hong Kong’s financial infrastructure.
  

HKEX and Regulators Join Forces: Promoting Modernization of the Financial Ecosystem

Hong Kong Exchanges and Clearing Limited (HKEX) (00388) Chief Operating Officer Catherine McLaughlin said that although Hong Kong has advantages of high liquidity and connectivity, continuous structural optimization is needed. USM exemplifies industry collaboration to modernize the financial ecosystem, making investment, trading, and risk management more convenient.

Upcoming Market Optimization Measures:

• Simplify trading unit frameworks: Lower investment barriers and enhance market flexibility.

• Explore optimizing settlement cycles (T+1): Actively study shortening settlement times to align with international standards.

• Maintain market resilience: Referencing the successful implementation of “Adverse Weather Trading Arrangements,” ensuring the market remains open globally under any conditions. Data shows that during adverse weather, Hong Kong’s daily trading volume remained above HKD 200 billion.

  		▲ HKEX Chief Operating Officer Catherine McLaughlin states that USM is an example of industry collaboration to promote the modernization of the financial ecosystem.
  

Hong Kong Government Outlook: Continuous Innovation to Ensure International Competitiveness

Financial Secretary Paul Chan Mo-po emphasized that Hong Kong’s strong market performance is not accidental but the result of years of regulatory optimization and market reforms.

• Expanding connectivity: Continuing to deepen links with Mainland China markets.
• Microstructural reforms: From adverse weather trading arrangements to paperless securities, Hong Kong is responding to global financial changes through technological innovation.

Paul Chan Mo-po announced that the government will continue to work closely with the SFC, HKEX, and market participants. Future reforms will be rolled out gradually to ensure Hong Kong maintains its leading position as an international financial center.

			▲ Financial Secretary Paul Chan Mo-po previews that future reform measures will be introduced gradually.

	

			

	


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