Hong Kong Bourse Said to Target July 25 for Closing Auction

  • Exchange yet to announce official date for new mechanism
  • Auction would bring HKEx in line with developed markets

Hong Kong Exchanges and Clearing Ltd. is aiming to reintroduce a daily auction to set closing stock prices on July 25, according to two people familiar with the plan.

The bourse operator hasn’t yet announced an official date for the roll out because preparations for the new mechanism may be delayed, said one of the people, who asked not to be identified because the talks between the exchange and market participants are private.

The exchange said in July that the auction would be rolled out in phases starting from the third quarter of 2016. Reuters reported the July 25 start date earlier on Tuesday. Scott Sapp, exchange spokesman, declined to comment.

The planned system would apply to a limited number of heavily-traded stocks and impose an order entry band of 5 percent during the auction. A closing auction would bring the Hong Kong exchange in line with most developed markets and help institutional investors improve their ability to track indexes by executing trades at the close.

The exchange’s last attempt at running such a mechanism lasted less than a year. Introduced in May 2008, HKEx dropped the auction in March 2009 days after HSBC Holdings Plc sank more than 10 percent in the final seconds of trading.

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