Hong Kong Stock Exchange's board lot size reform will increase the bourse's revenue and attract more smaller investors but its implementation will require significant investment, the South China Morning Post reported Sunday, citing analysts.
Both the bourse and financial firms said they need to upgrade their systems to accommodate changes to the board lot size, or the number of shares defined as a single trading unit, according to the report.
Board lot sizes are currently not uniform, and are generally large, which could take smaller investors aback, the report said.
While the reforms could help bring in more investors, upgrades could be costly and could pressure brokerages, the report quoted City University of Hong Kong Adjunct Professor Wilson Chan Fung-cheung as saying.
During the budget speech in February, Hong Kong Financial Secretary Paul Chan Mo-po called on the Hong Kong Exchanges and Clearing (HKG:0388) to upgrade the system to accommodate the liquidity characteristics of shares of different sizes, as well as improving trading efficiency, the report said.
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