Legislation paving way to paperless securities market in Hong Kong

We have previously reported on the Securities and Futures and Companies Legislation (Amendment) Bill 2021 (the Bill) which was gazetted in March. The Bill laid down the framework for an uncertificated securities market (USM) in Hong Kong. On 11 June 2021, the Hong Kong Government gazetted the Securities and Futures and Companies Legislation (Amendment) Ordinance 2021 (the Ordinance). The provisions in the Bill concerning the USM regime have remained largely unchanged in the Ordinance. The Ordinance does not specify a date for the implementation of the USM regime. Instead, the Securities and Futures Commission (SFC) is empowered by the Ordinance to make rules for, amongst other things, “the transition to full dematerialization of prescribed securities, including the setting of timetables and deadlines for, and otherwise controlling the progress of, the dematerialization of prescribed securities”. The SFC will consult the market on subsidiary legislation to prescribe detailed rules of the USM regime in due course.