On April 17, 2025, the SFC announced plans to launch an uncertificated securities market regime in early 2026. This initiative will increase market efficiency and provide better protection for investors.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On April 17, 2025, the Securities and Futures Commission ("SFC") commended the passage of crucial legislation enabling the implementation of the uncertificated securities market ("USM") in early 2026, contingent on market readiness.
Feedback from various market participants during recent consultations showed strong support for the USM initiative, which aims to bolster market efficiency and offer enhanced investor protection and convenience.
To aid in market comprehension and readiness for USM, the SFC introduced a specialized webpage containing FAQs for listed issuers and investors. Key changes encompass:
1. Mandatory use of paperless forms for newly listed securities from the moment of listing.
2. Existing securities holders can retain their paper certificates until specified deadlines for issuer action, after which issuers will no longer be permitted to issue new paper certificates.
The SFC, collaborating with Hong Kong Exchanges and Clearing Limited ("HKEX") and the Federation of Share Registrars Limited, is formulating a five-year implementation plan encompassing issuers from Hong Kong, Mainland China, Bermuda, and the Cayman Islands.
Mr. Rico Leung, the SFC's Executive Director of Supervision of Markets, underscored the importance of market participants' preparation for USM. The SFC plans to intensify its engagement efforts over the coming months to support stakeholders in grasping the new regime, its advantages, and subsequent steps.
All primary law amendments related to USM were enacted by the end of 2024, and the subsidiary legislation was finalized this week. The implementation date will be announced shortly. A comprehensive five-year timeline, with clear deadlines for each issuer, will enable the participation of over 2,500 existing issuers.
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