Enhancements of Information Dissemination under the Electronic Disclosure Project

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Enhancements of Information Dissemination under
the Electronic Disclosure Project

Briefing for Exchange Participants 11 May
2007
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Outline

• Overview of Electronic Disclosure Project
• Current Information Dissemination Arrangement
• Further Information for Exchange Participants
• Preparation by HKEx
• Timetable for Exchange Participants
• Question and Answers

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Electronic Disclosure is the right direction
Overview of Electronic Disclosure Project

• Electronic Disclosure will
• provide fair, timely, accurate, secure and cost
  effective access to regulatory information
• enhance investors confidence in our market
  infrastructure and regulations
• align Hong Kong with international norms and
• enhance Hong Kongs competitiveness.
• It will also provide the foundation for
• Dissemination of issuer information during
  trading hours
• Modified suspension policy to minimise adverse
  effect on trading and
• Allow the use of electronic templates to collect
  enhanced issuer disclosures.

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Brief History of the Electronic Disclosure Project
Overview of Electronic Disclosure Project
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Electronic Disclosure - Market Impact
Overview of Electronic Disclosure Project

• Electronic Disclosure proposals in summary
• Abolish paid advertisements in newspapers
• Mandate electronic submission
• Provide straight-through processing
• Require issuers to establish their own website by
  25 June 2008
• Consequential changes to suspension policy.
• Proposals effective from 25 June 2007
• Transitional arrangements
• Until 24 December 2007 issuers to publish a
  notification in newspapers
• Until 24 June 2008 issuers without their own
  website must continue to publish announcements in
  newspapers
• Communication, education and familiarisation.

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Overview of Electronic Disclosure Project
Detailed New Operation Model
?
Scope of NPA
Shareholder circulars and press releases
Issuers
??
?
?
?
?
?
HKEx website
Investors
(All announce-ments)
eSubmission System (ESS)
ePublication System (EPS)
No
Yes
Vetting?
?
PDF format
Issuer Information Feed (IIS)
Information vendors
?
?
ESS for vetting
?
?
(All announcements)
Market Data Feed (MDF) /
News alerts
News alerts
Clearance
EMSIS
AMS/3
?
?
?
Trading terminals
???
Listing Division
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Overview of Electronic Disclosure Project
Impact on Investors

• Go online for full version of issuer
  announcements
• Newspapers continue to cover corporate news
• Stay alert by signing up for HKExs free
  email/SMS alert service
• More timely dissemination of issuer news
• Free online central repository of issuer
  documents
• Upgraded functionality and capacity of HKEx
  website for access to issuer documents
• Easier retrieval and searching of issuer archives
  with newly introduced headline categories

Investors
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Overview of Electronic Disclosure Project
Preparing Investors

• Enhancements of website functionality for display
  and searching of issuer information
• Enhancements to ISC email/SMS alert service in
  April
• Alert Investor programme to raise awareness of
  the publication of issuer information on HKEx
  website
• Communication paper outlining Electronic
  Disclosure regime and its implications for
  investors and other stakeholders
• Public Viewing Room opened to facilitate investor
  access to issuer information posted on HKEx
  website

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Overview of Electronic Disclosure Project
Impact on Exchange Participants

• AMS/3 will no longer provide full text of issuer
  announcements. Brokers have to rely on HKEx
  website or information vendors services for
  access to issuer announcements
• HKEx will introduce a News Alerts Service so that
  AMS/3 traders will be alerted whenever a listed
  issuer announcement or document is published
• Floor traders at the Trading Hall have to bring
  their own portable PC for access to Internet, or
  use the online facilities available at back-up
  trading booths

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Overview of Electronic Disclosure Project
Preparing Exchange Participants

• New issuer news alert service for AMS/3 and
  Market Data Feed users from 25 June 2007
• Provision of headline categories for all issuer
  information
• Briefings and circulars to Exchange Participants
  on implications of Electronic Disclosure

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How issuer provides issuer documents?
Current Information Dissemination Arrangement

• To HKEx
• E-Submission System (ESS)
• CD-Rom or computer diskette delivered to HKExs
  designated collection box
• By fax (only limited types of documents)
• To other parties
• Published on one Chinese and one English local
  newspaper in the form of paid advertisements
  (Main Board issuers only)

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How to obtain issuer documents?
Current Information Dissemination Arrangement

• HKEx
• HKExs official website (www.hkex.com.hk)
• GEM website (www.hkgem.com)
• AMS/3 trading terminals
• Information vendors terminals
• Others
• Paid advertisements on local newspapers
• Shareholder circulars (for existing shareholders
  only)

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Further Information for Exchange Participants

• Limitations of AMS/3 for display of issuer news
• AMS/3 News Alert Messages
• Issuer Information on HKEx website
• Relocation of Trading Information
• .

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Further Information for Exchange Participants
Limitations of AMS/3 for display of issuer news

• Limited coverage Only vetted announcements and
  financial results of listed companies are
  uploaded to AMS.
• No graphics and tables Only ASCII text format is
  allowed.
• No archive depository All news will be erased
  at the end of the trading day.
• Incomplete News issued earlier will be pushed
  out by new incoming news.
• System design AMS/3 screen is not designed for
  display of lengthy issuer announcement.

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Further Information for Exchange Participants
AMS/3 News Alert Message
Headline Categories will be used to facilitate
the search of issuer documents
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Further Information for Exchange Participants
Headline category
Free-text title
Issuers own website
Headline Categories will be used to facilitate
the search of issuer documents
Caveats
Inspection of announcement
SAMPLE Notification
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Further Information for Exchange Participants
Issuer Information on HKEx Website Latest
Listed Company News

Quick Access Icon at Homepage
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Further Information for Exchange Participants
Issuer Information on HKEx Website Latest
Listed Company News
Latest Announcements
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Further Information for Exchange Participants
Issuer Information on HKEx Website News Archive
Multiple Search Functions
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Further Information for Exchange Participants
Issuer Information on HKEx Website Information
Search
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Further Information for Exchange Participants

Email / Mobile Alerts for Issuer News

• news alert service available through the
  Investment Service Centre (ISC) on the HKEx
  website
• Facilitate to keep track of latest issuer
  disclosures
• notify registered users by email and/or mobile
  phone text message alert of any announcements or
  disclosure
• Free of charge

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Further Information for Exchange Participants


News Alert Service Promotion Program

• Placing advertisement in local newspapers and
  issuing news release
• Forming Informed Investor Network with over 20
  Exchange Participants to promote the service
• Distributing promotional material ( posters,
  handbills and stickers)
• 23,000 registered subscribers
• Over 20 organisation joined the Informed Investor
  Network

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Further Information for Exchange Participants
Relocation of Trading Information and Information
Table
Effective 2nd May 2007
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Further Information for Exchange Participants
Centralised location for all Trading Information
Effective 2nd May 2007
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Enhancements of Information Dissemination
Centralised location for all Trading Information
Effective 2nd May 2007
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Preparations by HKEx

• Revised Listing Rules and guidance materials
  approved.
• Revised internal procedures adopted.
• Contingency measures and procedures established.
• Staff redeployed.
• Upgraded security, functionality and capacity of
  related IT systems
• Development and testing completed
• Familiarisation exercises support system
  readiness
• Upgraded HKEx websites to improve issuer
  information display and archive searching.

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Preparations by HKEx

• Upgraded the Investor Service Centres alert
  service which provides personalised notifications
  of announcements by SMS or email.
• Modified HKExs information products to support
  electronic disclosure changes.
• Introduced issuer news alert to AMS/3 and Market
  Data Feed.
• Developed training and familiarisation
  initiatives to educate listed issuers and their
  agents.
• Ready to educate investors and general public
  about Electronic Disclosure changes.

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Timetable for Exchange Participants
HKEx will work closely with Exchange
Participants to prepare investors and themselves
for the forthcoming implementation of the
Electronic Disclosure Project
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Thank You
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Disclaimer

• The material contained herein is for reference
  and education purpose only and does not
  constitute an invitation or offer to acquire,
  purchase or subscribe for any securities or
  HKExs products. Comments of speakers does not
  represent HKExs standpoint. HKEx takes no
  responsibility for the contents of this material
  or comments of speakers and expressly disclaims
  any liability whatsoever for any loss howsoever
  arising from or in reliance upon the whole or any
  part of the contents of this material or comments
  of speakers. Investors should read the listing
  document carefully, ensure that they understand
  the nature of and risks associated of their
  investment, and where necessary consult their
  financial advisers as to the suitability of the
  investment in light of their particular financial
  circumstances and objectives prior to making any
  investment decision.