Hong Kong Stock Exchange history dates back to 1866 but the first formal stock market, the Association of Stockbrokers in Hong Kong, was established in 1891. It was renamed the Hong Kong Stock Exchange in 1914.
A second exchange was incorporated in 1921 - the Hong Kong Stockbrokers' Association. The two exchanges merged to form the Hong Kong Stock Exchange in 1947.
The rapid growth of the Hong Kong economy led to the establishment of three other exchanges in the late 1960s and early 1970s.
Prompted by the 1973 market crash and the need to strengthen market surveillance, the Hong Kong government set up a working party in 1977 to consider the unification of the four stock exchanges. As a result, the unified exchange - the Stock Exchange of Hong Kong (SEHK) - was incorporated on 7th July 1980. The four exchanges ceased trading after the close of business on 27th March 1986.
This was a pivotal point in Hong Kong Stock Exchange history as this merger allowed the market to grow and compete on an international scale.
October Crash in 1987, SEHK underwent a complete reform, including the
establishment of a more widely representative Council and a strong,
professional executive management team, to safeguard the interests of
all participants and to operate and develop the market effectively.
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To enhance the competitiveness of the Hong Kong stock exchange and to meet the challenge of an increasingly globalised market, the Financial Secretary of the Hong Kong SAR Government announced in his Budget Speech on 3rd March 1999, a comprehensive market reform for the securities and futures market.
Under the reform, SEHK and Hong Kong Futures Exchange Limited (HKFE) were demutualised, the two exchanges and their respective clearing houses were merged with the Hong Kong Securities Clearing Company Limited (HKSCC) to form a single holding company - Hong Kong Exchanges and Clearing Limited (HKEx).
In accordance with the Schemes of Arrangements of the exchanges and the Exchanges and Clearing Houses (Merger) Ordinance which took effect on 6th March 2000, SEHK became a wholly-owned subsidiary of HKEx together with HKFE and HKSCC.
As you can see, the Hong Kong stock exchange history is one of massive growth and increasing market regulation to improve investor safeguards.
None of the above, however, discusses the role of overall governance. Sovereignty of Hong Kong was handed over from the UK to the People's Republic of China on 30th June 1997. As a part of the process, an agreement was signed between the UK and China that would enshrine a 'One Country, Two Systems' policy for a minimum of 50 years.
At the time of writing, this agreement has held for almost 15 years. Considering the freewheeling capitalist traditions of Hong Kong, this continuation is good for both the territory and it's stock exchange. Long may it continue...
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