Hong Kong Securities Clearing Company Limited (HKSCC), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), plans to increase the penalty fee for securities settlement failure.
HKSCC will submit the proposed rule changes to the Securities and Futures Commission (SFC) for approval today.
HKSCC proposes to increase the penalty fee, known as the default fee under the CCASS Rules, from the current level of 0.25 per cent of the market value of the failed transaction to 0.50 per cent. The maximum penalty fee would remain at $100,000 for each short stock position.
HKEx has agreed to seek the increase in the penalties for failure to deliver securities for settlement on T+2 at the request of the SFC in view of the uncertainties surrounding the current global financial market situation.
Subject to the SFC's approval of the rule amendments, the proposed penalty fee will be effective for transactions due for settlement on 2 October.