HKEx to Further Enhance Market Data Services
Hong Kong Exchanges and Clearing Limited (HKEx) announced today (Tuesday) three major initiatives to further improve its market data services. These initiatives will provide broader access to real-time market prices for the investing public, faster derivatives market data and a simpler licensing regime for information vendors. Fees of the new services are subject to the regulatory approval.
Commenting on the initiatives, Bryan Chan, HKEx’s Head of Market Data, said, “Over the past several years, our market has evolved, and so has the demand for market data. It has become obvious that we can no longer satisfy all the different investors’ needs with one single product. Diversification in terms of the products and types of service we offer is the key if we want to provide the best solutions for our investors.
“We are very excited about these new initiatives, and we will continue to increase our efforts in this direction so we can respond to the changing demand for market data services,” Mr Chan added. “We expect implementation of these initiatives will have no material impact on HKEx’s revenue in the near term.”
Free Prices Website Service to be expanded effective 1 April 2011
Following a review of a Pilot Programme in which HKEx has been providing a Free Prices Website Service1 since October 2009, HKEx has decided to open up the service and allow more service providers to participate beginning 1 April 2011.
The Free Prices Website Service Pilot Programme was aimed at enhancing transparency of HKEx’s securities market and raising HKEx’s profile in the Mainland. In September 2010, the Pilot Programme provided a total of over 1 billion stock quotes to the investing public in both Hong Kong and the Mainland, an increase of 200 per cent since the launch of the programme. On average, nearly 650,000 investors use the service each day.
Given the overwhelming interest in the service and in order to broaden access to real-time market prices for the investing public, HKEx has decided to re-package the service as the Basic Market Prices (BMP) Service and make it available for a flat-rate subscription for all HKEx licensed real-time market data information vendors.
The data content will remain unchanged, containing nominal/last traded price, closing price, today’s high/low prices, trading volume and turnover value of individual securities on the SEHK2, as well as their Indicative Equilibrium Price, or IEP, and Indicative Equilibrium Volume, or IEV, during the pre-opening session. To help increase transparency of the HKEx derivatives market, a similar BMP Service will also be introduced for derivatives market data, available for subscription separately.
Based on user feedback gathered during the first year of the Pilot Programme, the service scope and delivery channels of the BMP Service will be broadened to make it more investor-friendly. Information vendors may provide the BMP Service not only on their websites, but also on other service platforms such as the mobile web, mobile phones and PDAs, smart phone applications, interactive TVs and pagers.
Subject to separate fees, information vendors may also provide the BMP Service on their client’s websites (referred below as the Third Party Website BMP Service). The Third Party Website BMP Service is specially designed for users such as Exchange Participants, financial institutions, listed companies and issuers of structured products who are interested in the service but do not wish to be an information vendor themselves.
New High-speed Derivatives Market Datafeed to be Introduced in Early 2011
To meet continuing market demand for faster data and provide more choice to reflect the different needs of the market, HKEx will launch a new derivatives market datafeed named PRS Plus, tentatively scheduled for release in the second quarter of 2011. The update interval of the new datafeed will be shortened to one-fifth of that of the Price Reporting System, or PRS, which will also see the frequency of data updates increased fivefold. Upon its launch, PRS Plus will be the source of the most frequently updated market data for the derivatives market.
The PRS Plus will be offered to the market a data option in addition to the existing PRS. This product strategy will on one hand help meet different data needs in the market without adding unnecessary costs to those users who are satisfied with current market data offerings. HKEx will also make the PRS and the PRS Plus available for subscription at a lower fee for market users who need the market data for internal use only and not for redistribution, thereby saving them the cost in association with acquiring an information vendor licence from HKEx.
Single License Regime for Securities and Derivatives Market Data
To further streamline the management of license agreements and the operation of services applications by information vendors, HKEx will introduce a Single License Regime on 20 December 2010. This will result in the consolidation of various market data license agreements into a single agreement accommodating multiple datafeed products. A new derivatives market data package including both market data from HKFE2 and Stock Options data from SEHK2 will also be introduced.
Migration to the new regime is not mandatory. However, most of the directly connected information vendors will see reduced rates under the new regime. In addition, special discounts will be offered until the end of 2011 to those information vendors who join the new regime and redistribute both securities and derivatives market data.
1 Under the Pilot Programme, six websites (three from Hong Kong and three from Mainland China) have been allowed to provide free real-time basic market prices to the public. The Pilot Programme is set to expire at the end of 2011.
2 SEHK refers to The Stock Exchange of Hong Kong Limited. HKFE refers to the Hong Kong Futures Exchange Limited. Both SEHK and HKFE are wholly-owned subsidiaries of HKEx.