New Amendments Will Affect the Allotment and Redemption of Shares
Hong Kong’s Stamp Duty Ordinance comes into effect on 1 August 2020. It is an Amendment of Schedule 8 Regulation 2020.
With the changes, stamp duty will be exempted on the purchase and sale of stocks in Hong Kong. This applies to stock that involves ETF activities and pertains to the redeeming and allotting of ETF units or shares.
Who Is a Market Maker?
This is a person who must be approved or registered with the Stock Exchange Company (SEC) in Hong Kong. They must operate within the rules and guidelines set out by the SEC.
New Changes to the Allotment of Shares
The new changes in the Stamp Duty Ordinance in Hong Kong will impact the following areas:
- Purchasing Hong Kong Stock by the ETF market maker (settled within the period for allotment).
- Purchase and sale of stocks in Hong Kong by the ETF market maker (settled within the period for allotment).
- Purchases made by ETF participating dealers (settled within the period for allotment).
A participating dealer is someone who has been authorised by the ETF manager to handle the management and allotment of shares.
New Changes to the Redemption of Shares
The new changes in the Stamp Duty Ordinance in Hong Kong will impact the following areas:
- Hong Kong stock sales by ETF market makers (within redemption period).
- Purchase and sale of stocks in Hong Kong by the ETF market maker (settled within the period for redemption).
- Purchases made by ETF participating dealers (settled within the period for redemption).
