What is FINI?

On November 22, 2023, the Hong Kong Stock Exchange (HKEX) officially launched its new Initial Public Offering (IPO) settlement platform, FINI (Fast Interface for New Issuance). FINI significantly shortens the time from IPO pricing to the commencement of trading from 5 business days (T+5) to just 2 business days (T+2), greatly reducing the risk of price fluctuations before the stock begins trading. This also improves the overall efficiency of the market.

FINI is a new IPO settlement platform introduced by HKEX, providing a system for various Hong Kong IPO market participants, such as intermediaries, investment banks, securities firms, share registrars, and regulatory authorities, to collectively handle IPO subscriptions and settlements, thereby enhancing the efficiency of the IPO settlement process.

HKEX has also introduced a new fund pre-payment model through FINI, which helps to reduce the amount of capital locked up in oversubscribed IPOs.

The New Public Offering Fund Pre-payment Model

With the launch of the FINI IPO settlement platform, the historical challenges of "millions of people subscribing for new shares and billions of dollars being frozen" in the Hong Kong stock market will become a thing of the past.

In the past, every time a popular new stock was issued, it would result in a large amount of capital being locked up, affecting the overall liquidity of the Hong Kong stock market and even leading to an increase in the interbank lending rate. According to Deloitte's data, the capital locked up in the top 10 new stock offerings in Hong Kong in 2021 and 2022 was around HKD 5,154 billion and HKD 24.52 billion, respectively. However, in the first three quarters of this year, the amount has already decreased significantly to around HKD 8.8 billion, a decline of 61%.

This situation will no longer exist with the implementation of the FINI platform. FINI will introduce a new public offering fund pre-payment model, where investors only need to pre-pay the maximum number of shares they may be allocated, without having to lock up the entire oversubscription amount. This not only significantly reduces the amount of capital being locked up, but also improves the efficiency of capital utilization, preventing any negative impact on the overall Hong Kong stock market.

The launch of the FINI platform undoubtedly injects new vitality into Hong Kong's IPO market and is conducive to the further development of Hong Kong's financial market. Investors can look forward to a more convenient and efficient IPO subscription experience on the new platform.

Positive Impacts of the FINI Launch

1. Improved efficiency of Hong Kong IPOs

FINI significantly shortens the time from IPO pricing to the commencement of trading, allowing investors to obtain new listed shares more quickly.

2. Reduced investor capital costs

Investors only need to pre-pay the maximum number of shares they may be allocated, without having to lock up the entire oversubscription amount, which reduces their capital costs.

3. Decreased market risks

Investors can obtain new shares more quickly, reducing the time window for stock price fluctuations and lowering potential market risks.

4. Improved capital utilization efficiency

The reduction in large amounts of capital being locked up benefits the overall efficiency of capital utilization.

5. Decreased margin interest expenses

The reduction in investor capital costs also means a decrease in margin interest expenses.

Other Questions

· Do investors need to use FINI?

FINI is a Business-to-Business (B2B) platform provided for market intermediaries, issuers, advisors, and their representatives, as well as regulators. Regular investors only need to subscribe to new shares through their securities firms or banks as usual, and do not need to directly use FINI.

You can apply for IPOs through uSMART HK. The uSMART HK app has a dedicated IPO center, where customers can instantly subscribe to public offering of new shares.

Three reasons to choose uSMART HK for new share subscription:

1. Low commission: The commission for new share subscription can be as low as $0.

2. Aftermarket trading: uSMART supports aftermarket trading, with a commission as low as 0.05%, and a minimum commission of HKD$12 per order.

3. Safe and reliable: Independent asset custody, Hong Kong dual data center encryption transmission, protecting asset and data security.

· Can FINI help monitor the subscription of new shares?

After the launch of FINI, investors subscribing to new shares need to provide personal identification documents according to the Hong Kong Investor Identification Regime. If the system detects duplicate subscriptions, it will issue a prompt to the issuer and its intermediary agents. Duplicate subscriptions will be excluded during the share allocation process.

· Will FINI handle settlement procedures other than new shares?

Currently, FINI will only be responsible for the settlement procedures of new shares and REIT listings. Other trading and settlement arrangements in the Hong Kong market remain unchanged.