Hong Kong Stock Exchange's FINI system encountered a loophole and was unable to identify duplicate subscriptions for new stocks by "Hong Kong Cheung Kei".

The Hong Kong Stock Exchange (00388) will launch an electronic platform FINI in 2023 to handle new stock subscriptions, speeding up the pricing process and better combatting "repeated subscriptions". Recently, there has been a resurgence of frenzy in the Hong Kong stock market for new stocks, with some experiencing difficulties in acquiring them, leading to signs of repeated subscriptions. Currently, Hong Kong residents can only open accounts and subscribe to new stocks with their Hong Kong ID cards, and can only submit one application for new stocks. However, most active new stock market brokers accept Mainland Chinese residents to open accounts and subscribe to new stocks using Mainland ID cards or passports/travel documents. On March 10th, there were reports that Mainland Chinese individuals were opening accounts and subscribing to popular new stocks like BLOKS (00325) and Hui Lau Shan (02097) in Hong Kong using different forms of identification such as Mainland ID cards, Hong Kong ID cards, or passports. According to market sources, there are suspicions that Mainland investors in Hong Kong are using different forms of identification such as Mainland ID cards, Hong Kong IDs, or passports to subscribe to hot new stocks at different brokers. Simon Cheung, Co-Director of CITIC Securities, believes that the Hong Kong Stock Exchange should make every effort to plug all potential loopholes to make the entire subscription process fairer. However, chairman of the Hong Kong Securities and Futures Professional Association, Kevin Chan, admitted that allowing Mainland investors to use different forms of identification to open accounts is a loophole, making it difficult for the Hong Kong Stock Exchange to identify, but even if the new prospectus states that applicants need to prioritize using Hong Kong IDs to prove their identity, brokers still need to verify all applicant declarations, which is not an easy task. In response to inquiries, the Securities and Futures Commission of Hong Kong also stated that FINI will identify repeated subscriptions based on the new stock subscription information submitted by brokers. Investors must adhere to requirements when submitting applications, such as using their Hong Kong ID to subscribe if they have one. Brokers have a responsibility to ensure that their clients meet FINI's requirements when submitting new stock subscription applications.