On Jul. 17, HKEX issued changes re market maker participation.
HKEX said it is planning to allow market maker participation in pre-opening session (POS), closing auction session (CAS) for ETFs, leveraged and inverse products in Nov. 2024.
The draft obligations for market makers covers aspects like maximum spread limits, minimum quote sizes, and participation rates during various trading sessions.
In addition, HKEX also explained that market makers are required to maintain minimum participation rate of 80% during POS, continuous trading session (referred to as CTS), CAS, with specified lengths of time for maintaining quotes in the system.
Next Steps
Relevant rule amendments will be issued at a future date via a separate circular.
Oct. 10, 2024 Amendments to Rules
On Oct. 10, 2024, HKEX said HK SFC approved amendments to Rules of the exchange to introduce market maker participation in pre-opening and closing auction session.
Securities market maker must input, maintain two-sided market making orders, at or above the minimum quote size during the pre-opening and closing auction sessions.
Must be maintained until end of random matching/random closing periods, respectively.
Minimum participation rate counting period is set by HKEX, ranging from 0 to 900 seconds for pre-opening session and 0 to 360 seconds for the closing auction session.
Amendments will come into effect on Nov. 1, 2024.
Oct 10, 2024 Market Making Obligations
On Oct. 10, 2024, HKEX announced new market maker participation rules will be effective from Nov. 1, 2024; updated market-making obligations have been provided.
