The Stock Analysts Association calls for the optimization of the fractional share trading mechanism, with a long-term goal of "one share per lot."

The Hong Kong Society of Financial Analysts has officially submitted a position paper regarding the consultation document issued by the Hong Kong Stock Exchange on "Optimizing the Framework for Minimum Trading Unit in the Hong Kong Securities Market," supporting three core proposals, including lowering the minimum value guideline for each trading unit to HKD 1,000, establishing a maximum value guideline of HKD 50,000 for each trading unit, and standardizing the number of shares per trading unit to eight options, including 1 share, 50 shares, 100 shares, 500 shares, 1,000 shares, 2,000 shares, 5,000 shares, and 10,000 shares. Enhancing Secondary Market Operational Efficiency The Chairman of the Hong Kong Society of Financial Analysts, Tang Shengxing, stated that the current system of trading unit numbers dominated by issuers has led to over 40 different trading unit numbers in the market, which increases the complexity of trading, settlement, and delivery processes, as well as complicating hedging operations and product matching. Standardizing the number of shares per trading unit will help enhance the operational efficiency of the secondary market and align with the long-term development interests of the market. Regarding the reduction of the minimum value guideline to HKD 1,000, the society believes this adjustment aligns with the current market situation, primarily because the execution costs of small transactions have significantly decreased over the past decade, helping to lower the investment threshold and is expected to increase the daily transaction volume by approximately 1.9%, which is still within an acceptable range. The society mentioned that if further reductions to lower levels are made, it could significantly increase the risk of negative transactions and system pressure, making it inappropriate to adopt at this stage. As for the establishment of a maximum value guideline of HKD 50,000 for each trading unit, applicable only to issuers with trading units greater than 100 shares, the society believes this can address the bottleneck of retail investor participation and help align with international practices. Additionally, implementing this as a guideline at this stage can provide issuers with clear direction while retaining flexibility to adjust according to their circumstances. Call for Research to Optimize Odd Lot Trading Mechanism Regarding the standardization of the number of shares per trading unit to eight options, the society provided supplementary suggestions, including clearly setting "one share per trading unit" as a long-term goal, supporting a six-month adjustment period, and paying attention to implementation challenges. This includes recommending that the Hong Kong Stock Exchange provide clear technical guidelines and sufficient testing environments, while simultaneously researching to optimize the odd lot trading mechanism and suggesting the introduction of a one-time odd lot matching or repurchase mechanism, among others. Furthermore, the society also proposed several suggestions to improve the implementation effectiveness of the new framework, including establishing quantitative indicators to monitor policy effectiveness, reviewing related fee structures, and strengthening coordination with the mainland market