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HKEX to Remove Min. & Max. Components of Stock Settlement Fee in June 2025
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HKEX (00388.HK) announced 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% of all securities trades conducted between 2019 and 2024 would benefit from lower fees under the new structure. The new fee structure, which has been approved by the Securities and Futures Commission, 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. AAStocks Financial News |
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