"Uncertificated Securities Market" at a glance

A new way to hold shares: Investors can choose to hold shares electronically in their own names and be recorded on the issuer’s register as the registered shareholders. This means they can:

• enjoy and exercise full shareholder rights directly;
• manage their holdings electronically through online platforms; and
• effect transfers much more quickly, potentially within the same day.

Existing shareholding options remain valid: Investors can choose to hold shares in the new uncertificated form or continue with the existing arrangements, namely:

• continue to hold their existing physical certificates; or
• continue to hold their shares through banks or brokers.

Effective Date: 16 November 2026

Shares that are already listed: Issuers of shares that are already listed will have to participate in USM in phases over a five-year period, from November 2026 to November 2031. The first group of issuers will begin participating in the first quarter of 2027. Once USM is implemented, investors can visit the Hong Kong Exchanges and Clearing Limited (HKEX) website for the participation timeline of issuers.

IPOs: Shares that are first listed after 16 November 2026 will be issued in uncertificated form only, ie, no physical share certificates will be issued.

• Applying for IPO shares in your own name (White Form Subscription): Investors should set up a USI Facility with the issuer’s securities registrar.
• Applying for IPO shares via banks/brokers (Yellow Form Subscription): Existing processes remain unchanged.

Applicable to: Over 2,700 Hong Kong-listed issuers that are incorporated in Chinese Mainland, Hong Kong, Bermuda, or the Cayman Islands. These represent more than 90% of all Hong Kong-listed issuers.

Covers: Listed shares, depositary receipts, stapled securities, real estate investment trusts (REITs), and exchange-traded funds (ETFs) that are withdrawable from the Central Clearing and Settlement System (CCASS), as well as subscription warrants and rights to subscribe for any of these securities.

Excludes: Warrants, callable bull/bear contracts and most ETFs.

What is a USI Facility? It is an electronic / online facility that enables investors to hold and manage their shares electronically in their own names.

How to set up a USI Facility? USI Facilities are provided by securities registrars. Investors can contact relevant securities registrars for details of the set-up process. As an initial step, the Securities and Futures Commission (SFC) has approved two securities registrars to offer such facilities. Investors can visit the SFC’s website for the list of securities registrars approved. Investors can also visit the HKEX’s website to identify the relevant securities registrar for their shares.

No need to rush into taking any action: Investors can familiarise themselves with the features and arrangements of USM, and compare the new and existing shareholding options, before deciding whether to stay with their current arrangement or switch to the new option. However, if investors want to subscribe for an IPO and hold the IPO shares in their own names (White Form Subscription), they should – as far as possible – set up a USI Facility in advance.

If investors switch to the new shareholding option: They can set up a USI Facility in advance and then watch out for issuer’s announcement about when the issuer will participate in USM. This information will also be available on the HKEX website. Once the issuer participates, investors can dematerialise their share certificates (convert into uncertificated form).

If investors continue to hold paper certificates: Existing share certificates will remain valid, and investors can continue to hold them after the relevant issuer participates in USM. However, no share certificates will be issued once an issuer participates in USM. This means all entitlements (eg, bonus shares) will be distributed in uncertificated form. Additionally, the shares will have to be dematerialised in the following circumstances:

• if any of the shares covered by the certificate are to be transferred,
• if any of the shares covered by the certificate are to be deposited into CCASS, or
• if the holder passes away, and any of the shares covered by the certificate are to be transmitted to the holder’s personal representative or beneficiaries.

If investors continue to hold their shares through banks or brokers: Existing processes and procedures remain largely unchanged, and no action from investors is required. The existing process of buying and selling of shares, receiving dividends, and exercising shareholder rights through brokers and banks will remain unchanged.

Following the implementation of USM, some of the fees charged by securities registrars will be adjusted. Please contact the respective registrars for details.

The SFC has set the following limits on major fees charged by securities registrars:

• USI set-up fee: HK$50 per USI.
• Dematerialisation fee: HK$5 per certificate, subject to a minimum of HK$20 per request.
• Transfer fee: 0.02% of the value of the shares transferred, subject to a minimum of HK$20 per request.

The fees charged by banks or brokers may also be adjusted, subject to the policies of each individual institution. Investors are advised to contact their respective banks or brokers for further details.

As USM is a new initiative, investors should beware of fraudulent schemes seeking to exploit its launch. Scammers may impersonate regulatory bodies, securities registrars, banks, or brokers to lure investors into disclosing personal and account details, clicking on malicious links, or downloading fraudulent mobile applications.

Members of the public should remain vigilant and carefully verify any information they receive. If in doubt, contact the relevant organisation through its official website or a verified telephone number, or call the Hong Kong Police Force’s Anti-Deception Helpline 18222 for assistance.