Hong Kong: Proposed stamp duty exemption for certain transactions relating to dual-counter stock
Draft legislation introduced for consideration before the Legislative Council
Certain transactions relating to dual-counter stock
Draft legislation introduced for consideration before the Legislative Council on 30 November 2022 would provide a stamp duty exemption for:
- Transactions relating to dual-counter stock made by the market-makers conducting market making activities
- Transactions relating to dual-counter stock made by market-makers conducting liquidity providing activities
Dual-counter stock is defined as Hong Kong stock in two tranches denominated in different currencies both of which may be traded in two counters, which are designated by a recognized exchange company as the primary counter and the secondary counter of the stock.
Similar to the existing market making mechanisms for exchange-traded funds (ETFs) and derivatives, the Hong Kong Exchanges and Clearing Limited (HKEX) and the Inland Revenue Department (IRD) would formulate the detailed administrative rules and devise the administrative arrangements for the proposed stamp duty exemption and set up a monitoring mechanism (including regular review of the trading activities and the record keeping and reporting requirements) to prevent any abuse of the proposed stamp duty exemption.
For more information, contact a KPMG tax professional:
David Ling | firstname.lastname@example.org
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.