HONG KONG - Hong Kong plans to launch the uncertificated securities market (USM) regime on Nov 16, the Securities and Futures Commission (SFC) of Hong Kong announced on Monday.

Major work streams for implementing USM are now at advanced stages following steady progress over the past year, said the SFC, adding that Hong Kong Exchanges and Clearing Ltd (HKEX) and relevant share registrars are at an advanced stage of developing and testing their USM-related systems and processes, with market participants to be invited to participate in testing in the coming months.

Amendments to various HKEX rules and operational procedures that are necessary for implementing USM have also been approved, the SFC said.

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The SFC is reportedly reviewing applications from six FSR (the Federation of Share Registrars Limited) members who seek to become Approved Securities Registrars (ASRs). Information on the status of their applications will be published on the SFC's website in the coming weeks.

Implementation of the USM regime will further elevate Hong Kong's financial market infrastructure through greater investor choice, more streamlined processes and more opportunities for straight-through-processing, said Rico Leung Chung-yin, the SFC's executive director of supervision of markets.

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Upon implementation, newly listed securities will be required to be issued in paperless form from the time of listing. For securities already listed prior to the launch date, issuers will be gradually integrated into the USM regime over a five-year period. Issuers and the market will receive advance notice regarding these arrangements.

Investors who possess share certificates will have the flexibility to decide when they wish to convert their shares into paperless form.