A integration & demutualization of exchanges

Abstract

Mr. Dickens will discuss Hong Kong's experience in demutualizing, merging and self- listing its securities and derivatives exchanges and clearing houses to form HKEx. The drive for change and the Government-led process by which industry agreement was achieved are briefly discussed. The move to a profit-driven entity necessitated additional checks and balances to ensure HKEx acted in the public interest, that conflicts between its business interests and remaining regulatory roles were minimized, and that its monopoly position was not abused. Demutualization also meant the abandonment of industry self- regulation, an expansion in the role of the statutory regulator and a change in the previous relationship between the industry participants, the statutory regulator and the Government. Mr. Choi will present a study on self regulation of the demutualized exchanges. Over the past few years, there has been a trend towards stock exchanges becoming for-profit shareholder-owned companies.