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.
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