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Hong Kong plans market making regime for yuan-denominated shares

The Hong Kong government and the Hong Kong Exchanges and Clearing (HKEX) have planned to set up a market-maker system in H1 of 2023 to allow the Stock Connect transborder investment channel to handle yuan-denominated shares in Hong Kong. Christopher Hui Ching-yu, secretary for financial services and the treasury, said introducing a market-maker regime will enhance the overall efficiency and quality of the trading system of yuan stocks and promote the liquidity of these shares, and avoid the widening of spread and excessive price fluctuations caused by a lack in product liquidity. Alibaba Group Holding and more than a dozen publicly traded companies came out in support of the plan. Tencent Holdings, New World Development, Ping An Insurance, and Xiaomi were among the companies that said they would explore yuan-denominated offerings.

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