HKICPA welcomes HKEX’s streamlined board lot framework to reduce market complexity and enhance trading efficiency

The Hong Kong Institute of Certified Public Accountants (HKICPA) welcomes the Hong Kong Exchanges and Clearing Limited’s (HKEX) newly announced enhancements to the board lot framework for the Hong Kong securities market. HKICPA believes this reform represents a meaningful step forward in reducing market complexity and improving overall operational efficiency.

As a key stakeholder in Hong Kong's financial ecosystem, the HKICPA actively participated in the HKEX consultation process by submitting a formal written response. The submission outlined a series of comprehensive recommendations aimed at improving market microstructure.

Under the newly reformed framework, board lot units for applicable securities will be streamlined into a defined set of eight options (1, 50, 100, 500, 1,000, 2,000, 5,000, and 10,000 shares). Additionally, the board lot value floor guidance will be reduced from HK$2,000 to HK$1,000, and a ceiling guidance of HK$50,000 will be introduced for issuers with board lot units larger than 100 shares.

Stephen Law, President of the HKICPA, said, "We believe the streamlined board lot framework will bring clear and tangible benefits to our stock market. By lowering the entry barriers and reducing trading friction, these adjustments will make the Hong Kong securities market more accessible and inclusive for a wider base of investors. Standardising and simplifying market arrangements is crucial to maintaining our competitive edge. We look forward to seeing continuous market enhancements and innovations in financial infrastructure that will further boost market liquidity."

The HKICPA is pleased to see that several suggestions mentioned in the HKEX consultation paper, which are supported by the Institute—specifically the reduction of the value floor and the standardisation of board lot units—have been adopted in the finalized framework being implemented. To build upon this momentum, the HKICPA urges the HKEX to consider its further recommendations in future upgrades, including further reducing the number of standardized board lot units to 4 options (1, 100, 2,000 and 10,000 shares), especially introducing one-share board lot to align Hong Kong with international common practice to lower entry barriers for retail investors and foster greater liquidity across all listed securities. Providing that 56% of stocks on the current market trading at $0.01 to $1, HKICPA would also suggest that HKEX consider developing a plan to deal with these "penny stocks" on the market.

Looking ahead, the HKICPA remains committed to contributing to Hong Kong's market development by actively participating in public consultations across financial markets, taxation regimes, and public policies. We look forward to leveraging the deep professional expertise of our members to help uphold and further strengthen Hong Kong’s status as a premier international financial centre.

^{The Hong Kong Institute of Certified Public Accountants welcomes the Hong Kong Exchanges and Clearing Limited’s newly announced enhancements to the board lot framework for the Hong Kong securities market.}