HONG KONG: HKEX Outlines Preparation Work for Transition to USM

Friday June 6 2025

On 30^th May 2025, Hong Kong Exchanges and Clearing Limited (HKEX) updated reference materials for market participants and issuers in preparation for the implementation of the Uncertificated Securities Market (USM) regime in 2026.

Following the completion of relevant legislative processes, USM will become effective in early 2026 (USM Implementation Date), subject to market readiness. HKEX has been working closely with the Securities and Futures Commission (SFC) and the Federation of Share Registrars Limited to support operational readiness for the implementation of USM.

Upon the full implementation of USM, nearly all Hong Kong-listed securities will be held in uncertificated form. This advancement aligns with global best practices and enhances market efficiency, providing investors with shorter processing times and the convenience of managing their portfolios electronically. Other market participants, including issuers and intermediaries, will also benefit from increased efficiencies through streamlined and automated processes.

In addition, the Exchange will introduce new operational procedures for the transfer of participating securities to and from HKSCC Nominees Limited. There will also be a transition period where special arrangements will be in place with respect to the deposit, dematerialization and withdrawal of physical certificates prior to the relevant prescribed securities becoming participating securities.

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