Response to Severe Weather Trading Arrangements
Release Date: 2024-06-18
June 18, 2024
The Government of the Hong Kong Special Administrative Region announced today, June 18, that the securities market will continue to operate under normal trading conditions during severe weather events, referred to as "the Arrangement." This policy will take effect on September 23. Additionally, the government has expressed its commitment to assisting small and medium-sized brokerages in their preparations for this Arrangement.
Our association endorses any governmental initiatives aimed at enhancing market liquidity and strengthening Hong Kong's competitive position. However, we believe that the implementation of the Arrangement for sustaining market operations during severe weather conditions could be improved. Below is our formal response to the Arrangement:
In conclusion, our organization asserts that sustaining regular trading activities during extreme weather conditions encompasses several domains and introduces a range of operational risks. Of particular concern are the risks associated with personal and data security, which remain our top priority. Consequently, we emphasize the necessity for the government and pertinent institutions to formulate detailed contingency plans and supportive strategies aimed at mitigating these risks. The effective implementation of policy is contingent upon the establishment of these plans and measures.
Should you have any inquiries regarding this letter, please feel free to contact the Public Relations and Development Department (Tel: 2384 2026 (Tsim Sha Tsui) / Email: pr@hksfpa.org).
Wishing you good health,
Mofiz Chan
Chairman
The Hong Kong Securities and Futures Professionals Association
The Government of the Hong Kong Special Administrative Region announced today, June 18, that the securities market will continue to operate under normal trading conditions during severe weather events, referred to as "the Arrangement." This policy will take effect on September 23. Additionally, the government has expressed its commitment to assisting small and medium-sized brokerages in their preparations for this Arrangement.
Our association endorses any governmental initiatives aimed at enhancing market liquidity and strengthening Hong Kong's competitive position. However, we believe that the implementation of the Arrangement for sustaining market operations during severe weather conditions could be improved. Below is our formal response to the Arrangement:
- According to the government's pan, the Arrangement is set to be officially implemented on September 23, providing a preparation window of only three months. During this timeframe, the Hong Kong Stock Exchange will conduct two drills with brokers in July and August. The transition period is expected to conclude by the end of 2024. While the government deems the September launch to be well-timed, we have reservations regarding whether a three-month period is adequate for brokers to effectively manage critical tasks such as upgrading trading systems and making necessary employee arrangements.
- The government's strategy stipuates that the Arrangement will be formally launched on September 23, allowing a mere three months for preparation. Throughout this timeframe, the Hong Kong Stock Exchange plans to carry out two simulation exercises with brokers in July and August. The transition phase is set to conclude by the end of 2024. While the government views the September implementation as an opportune moment, there are apprehensions regarding whether the three-month window is adequate for brokers to effectively tackle challenges such as upgrading trading systems and organizing employee logistics.
- The Stock Exchange, aong with the Securities and Futures Commission and the Hong Kong Monetary Authority, will publish guidelines and notices to assist the industry in navigating operational requirements and protocols during severe weather and extreme conditions. While specific details remain undisclosed, brokers are anticipated to adopt these guidelines within the next three months, which may present challenges for small to medium-sized brokerage firms.
- For empoyees mandated to work in office environments under extreme conditions, the government advises that employers adhere to the Labour Department's guidelines regarding work during severe weather and challenging circumstances. This includes obtaining appropriate insurance and ensuring necessary supplies are available for employees. However, uncertainties persist regarding the availability of suitable insurance products in the market. Additionally, if brokers do not sufficiently prepare supplies or establish employment contracts as stipulated, will they incur penalties? These questions remain unresolved.
- If brokers do not impement the necessary measures by the conclusion of 2024, will this indicate that they will be unable to function normally? This matter requires additional clarification.
In conclusion, our organization asserts that sustaining regular trading activities during extreme weather conditions encompasses several domains and introduces a range of operational risks. Of particular concern are the risks associated with personal and data security, which remain our top priority. Consequently, we emphasize the necessity for the government and pertinent institutions to formulate detailed contingency plans and supportive strategies aimed at mitigating these risks. The effective implementation of policy is contingent upon the establishment of these plans and measures.
Should you have any inquiries regarding this letter, please feel free to contact the Public Relations and Development Department (Tel: 2384 2026 (Tsim Sha Tsui) / Email: pr@hksfpa.org).
Wishing you good health,
Mofiz Chan
Chairman
The Hong Kong Securities and Futures Professionals Association