HONG KONG: SFC Updates Guidance to Prepare For HKD-RMB Dual Counter Model

Wednesday June 7 2023

On 6^th June 2023, the Securities and Futures Commission (SFC) published revised guidance on short selling reporting and stock lending record keeping to prepare for the launch of the HKD-RMB Dual Counter Model in the Hong Kong securities market on 19^th June 2023. 

The Guidance Note on Short Selling Reporting and Stock Lending Record Keeping Requirements has been updated to cover inter-counter transactions of securities under the Dual Counter Model. Corresponding revisions have also been made to the SFC’s Frequently Asked Questions for Short Position Reporting. 

The Guidance Note clarifies that as HKD and RMB counters for the same security are of the same class, the following inter-counter transactions fall within the current framework: 

• when an investor buys a security at one counter first and sells at another, the sale is considered an ordinary sale, and 
• when a Dual Counter Model market maker sells a security at one counter and buys it at another, the inter-counter transaction falls under the current exemption, subject to certain conditions. 

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