1. Operating Features (Quote Request Function) Provision of Derivative Warrant Liquidity Lawrence Fok HKEx Deputy Chief Operating Officer 28 November 2001
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2. Agenda Derivative Warrant Liquidity Provider (DWLP)
Provision of Derivative Warrant Liquidity
Trading Devices for DWLP
Emergency / Backup Arrangement
Obligations and Non-Compliance
Information Dissemination
Q & A Session
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3. (1) Derivative Warrant Liquidity Provider (DWLP)
DWLP must be an Exchange Participant
DWLP must be appointed by Issuer
An issuer may appoint more than one DWLP for different issues
Each derivative warrant can only have one DWLP
A DWLP can quote more than one issues for the same or different issuers
Each DWLP assigned with a unique broker ID - 95xx
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4. (2) Provision of Derivative Warrant Liquidity
Each DWLP acts an agent for the issuer
by automatching and reporting of manual/cross trades
quotation rule - not applicable
short selling - not allowed
transaction fee/charges - same
trading hours - same
CCASS settlement - same
trading terminal page - no change except broker ID 95xx and phone number(s) on free text area
existing listed derivative warrants - not applicable
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5. (3) Trading Devices for DWLP
Only through a separate DW Open Gateway (“OG”) / DW AMS Terminal for order / trade input of derivative warrants.
DW OG - Two standard throttles (i.e. two orders per second) assigned for the first 5 warrants.
DW AMS Terminal - Two terminals for the first 5 warrants.
One standard throttle / terminal provided for the next 5 additional derivative warrants (i.e. 6-10, etc.)
Cost of trading devices borne by DWLP
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6. (4) Emergency / Backup Arrangement
Backup DWLP
Backup devices
- an existing OG
- a separate standby terminal
Only activated upon request by issuer/broker during emergency
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7. (5) Obligations & Non-Compliance
Obligations per Issuers’ listing document
Suspend the issuer from further issuance
Disconnect DW OG / DW AMS Terminal
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8. (6) Information Dissemination
Daily report to the Stock Exchange
- trading warrant
- newly listed warrant
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9. Q & A Session
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