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Hong Kong Exchanges and Clearing Limited

Name Hong Kong Exchanges and Clearing Limited (HKEX)
Country China
Number of listed companies 2186
Domestic market capitalization 4443082 million US$
SSE Partner Exchange Yes
Has annual sustainability report Yes

ESG reporting required as a listing rule Yes

  • Comply or explain as of 2016 – if the issuer does not report on one or more of the provisions, it must provide reasons in its ESG report.
  • In 2019, An update to the Guidance Letter (HKEX-GL86-16) sets out expected disclosure on ESG matters and requiring disclosures on gender diversity in the listing documents of new applicants (source).
  • Listing requirement can be found in the ESG Reporting Guide, Appendix 27 to the Main Board Listing Rules, here.
  • Consultation paper and conclusions on ESG reporting guide found here.
  • Changes to the Corporate Governance Code made on 1 January 2019 to strengthen the transparency and accountability of the board and/or nomination committee and election of directors, including Independent Non-Executive Directors (INEDS); improve transparency of INEDs’ relationship with issuers; enhance criteria for assessing independence of potential INED candidates; promote board diversity, including gender diversity; and require greater divident policy transparency. (source).
  • Appendix 14 Corporate Governance Code and Corporate Governance Report.

Has written guidance on ESG reporting Yes

Offers ESG related training Yes

  • The exchange has launched an e-training course, “ESG Governance and Reporting”, which explains the board’s leadership role in ESG matters and covers the following six topics: what is ESG, and why it is important; board’s role in ESG governance, why report on ESG, essential elements in an ESG report, details on ESG reporting, ESG dsiclosure by IPO applicants. The e-training takes approximately 45 minutes to complete. (source).
  • The Exchange from time to time provides training and gives presentations to promote ESG reporting.  HKEX representatives also give presentations at the events organised by various non-governmental organisations and professional organisations to identify the latest trends and share practical advice in relation to ESG reporting.
  • The Director Training Programme 2017/2018 also covers the topic of ESG reporting.

Market covered by sustainability-related index Yes

Has sustainability bond listing segment No

  • However, as at 31 March 2018, there were 10 green bonds listed on the Exchange.

Has SME listing platform Yes

Additional information
  • HKEX has been rated highly and awarded by both local and overseas rating agencies or professional institutions, in recognition of its achievement in corporate governance and CSR. More details are available on the HKEX Group website.
  • As part of the Exchange’s ongoing initiative to raise the overall standard of ESG performance and disclosures among issuers, the Exchange has conducted market consultations on proposed changes to the ESG reporting requirements under the Listing Rules.
  • In addition, the Exchange conducts periodic review of issuers’ ESG disclosures and publishes its findings on the HKEX Market website.
  • In November 2017, the Exchange published a Consultation Paper on Review of the Corporate Governance Code and related Listing Rules. The Consultation includes further measures to strengthen board diversity. The Consultation Conclusions paper will be published in 2018.

Organizational model of stock exchange
  • Listed company for profit; demutualized in 2000.

Regulatory bodies

Regulatory model
  • HKEX is a recognized exchange controller under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). The Exchange is responsible under statute for ensuring, so far as reasonably practicable, that the Hong Kong markets are fair, orderly and informed (the Exchange’s statutory duty). The Securities and Futures Commission performs a lead role in market regulation and certain areas of listing regulation, and a complementary role through the exercise of its statutory powers by providing investigation and enforcement in cases involving corporate misconduct. Details of the regulatory framework of Hong Kong’s securities market are available on the HKEX Market website. 

About the stock exchange
Location: Hong Kong

  • As one of the largest financial market operators in the world, HKEX and its subsidiaries provide world-class facilities for trading and clearing securities and derivatives in equities, commodities, fixed income and currency. Headquartered in Hong Kong, the Group has offices in London, Beijing, Shanghai, Shenzhen and Singapore.
  • In Hong Kong, HKEX is a recognised exchange controller under the Securities and Futures Ordinance. Through its subsidiaries, HKEX operates the securities and derivatives markets and is the frontline regulator of listed issuers in Hong Kong. It also provides clearing and settlement services, depository and nominee services, and information services across multiple products and asset classes.
  • In collaboration with the Shanghai and Shenzhen stock exchanges, HKEX operates Stock Connect, a mutual market access programme which gives investors in the Hong Kong and Mainland securities markets access to the other market. In London, HKEX indirectly owns The London Metal Exchange (“LME”), an exchange for the trading of futures and options contracts on base and other metals, and LME Clear Limited which provides clearing and settlement services for all exchange contracts traded on the LME.
  • HKEX was listed in Hong Kong in 2000.  More information about HKEX and its subsidiaries is available on the HKEX Group website.

Stock Exchange Database Criteria

The SSE maintains a database of sustainability activities for all stock exchanges that are either members of the SSE initiative and/or members of the World Federation of Exchanges. This database is the most comprehensive database of stock exchanges worldwide and contains data on all main stock exchanges. The information in this database is intended to inform investors and other stakeholders on the work stock exchanges are undertaking to advance sustainability in their respective markets.

The information provided in this database is based on publicly available information prepared by the SSE Secretariat with input from stock exchanges in most instances. Sources and explanatory notes on sustainability information have been included in individual Stock Exchange Fact Sheets. The criteria for each category can be found below.

While every effort is made to keep the information in this database up to date, please be aware that certain factors change frequently and therefore may not be exact, such as the number of listed companies or market cap.

Field

Criteria Considered

Conducts business in Country or Market in which the stock exchange operates
Number of listed companies (Date updated) Updated either by the stock exchange directly or using WFE data
Domestic market capitalization  Updated either by the stock exchange directly or using WFE data
Has signed the SSE Commitment Letter? To be considered an SSE Partner Exchange, the CEO or Chairperson of the exchange must sign an SSE commitment letter. Contact the SSE for more information if your exchange would like to join.
Has annual sustainability report? For a yes, stock exchanges must report, either in a stand alone report or integrated into their financial report, on their environmental and social impact and corporate governance.
ESG reporting required as a listing rule? For a yes, all three factors have been considered (environmental, social and governance) within the listing rules for some or all listed companies. This requirement may come from the regulatory authority or the exchange, depending on the market.
Offers written guidance on ESG reporting? For a yes, all three factors have been considered (environmental, social and governance). The SSE has developed a model guidance that all exchanges can use to develop their own guidance to issuers. For more details, click here.
Offers ESG related training? For a yes, training must have taken place in the previous 12 months, and must be interactive. The topic of the training must be on some area of sustainability.
Market covered by sustainability-related index? Sustainability-related indices may include environmental or social  indices, or ESG indices. This could include specific themes, such as low carbon indices, or general sustainability indices. The index must be specific to the market the exchange operates in (a region or world index is not included).
Has sustainability bond listing segment? For a yes, the exchange has developed the rules and regulations allowing for sustainability bonds to be listed, and provides a separate segment for listing making the bonds easy to find and identify.
Has an SME listing platform? For a yes, the exchange offers a listing platform specifically for Small-and-Medium sized enterprises.
Additional Information Additional Information captures exchanges’: sustainability section of websites,  sustainability products not captured under indices; information on future sustainability commitments and other information on the exchange
Organizational model of stock exchange Whether the exchange is listed or not, and when it was demutualized
Regulatory bodies The regulatory authority that sets listing requirements and capital market regulation for the exchange's market
Regulatory model

The extent to which exchanges have regulatory authority in their market. This may include: 

  • Limited exchange SRO
  • Strong exchange SRO
  • Independent member SRO
  • Government (Statutory)
  • Non-SRO
About the stock exchange The location of the headquarters of the exchange, and any additional details about the stock exchange.