• Fee structure enhancement to align with the notional value traded, taking effect in June 2025

• Minimum and maximum components of the stock settlement fee will be removed, with a new ad valorem rate at 0.42 bps (0.0042%) for each trade

• Eligible market making trades for Exchange Traded Products (ETP) will be charged at 0.20 bps (0.0020%)

Hong Kong Exchanges and Clearing Limited (HKEX) announce today (Friday) enhancements to the securities market stock settlement fee structure that are aimed at boosting market efficiency and ensuring consistent fee application across all trade sizes.

The current stock settlement fee structure, which includes a minimum fee of $2 and a maximum fee of $100, disproportionately impacts lower-value trades. To address this, HKEX will remove the minimum and maximum fee components, and adjust the ad valorem rate to 0.42 bps (0.0042%) for each trade. The new fee structure is designed to be cost-neutral to the market as a whole, creating a more equitable fee structure across all trade sizes.

In addition, the stock settlement fee for eligible market making trades for Exchange Traded Products (ETPs) will be set at a rate of 0.20 bps (0.0020%), removing the minimum and maximum fees. This adjustment aligns with the historical costs of ETP market-making activities and aims to ensure the ongoing provision of liquidity to the ETP market.

Based on HKEX data, about 77 per cent of all securities trades conducted between 2019 and 2024 would benefit from lower fees under the new structure.

HKEX Chief Operating Officer and Group Chief Financial Officer, Vanessa Lau, said: “At HKEX, we are committed to building a vibrant and efficient marketplace for our global investors. We are, therefore, pleased to introduce an enhanced stock settlement fee structure that is clear, consistent and equitable for all trades sizes, supporting our retail and institutional investors in executing their trading strategies. This is also part of our ongoing initiatives to elevate the breadth and depth of our securities market, reinforcing Hong Kong’s position as a premier financial centre of choice.”

The new fee structure, which has been approved by the Securities and Futures Commission (SFC), will take effect in June 2025, ahead of the implementation of Phase 1 of the minimum spreads reduction, subject to market readiness. The reduction of minimum spreads would encourage trades to be executed in smaller sizes, thus benefiting from the new fee structure.