HKEx confirms intent on closing auction

Mar 4, 2014

Hong Kong's exchange has set a timetable for re-implementing a long-sought-after closing auction for its cash market. A price cap is expected to be introduced to dampen volatility.

Hong Kong Exchanges & Clearing will consult this year on reinstating a closing auction for the cash equities market, a much-sought-after mechanism that is thought to dampen trading volatility and help fund managers reduce portfolio tracking error. Hong Kong is the only one of the 23 MSCI developed markets where the closing price is not determined by a closing auction. In May 2008 it introduced one, only to retract it in March 2009 after HSBC, a major component of the Hang Seng…

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