The Zhitong Finance App learned that Hong Kong Central Clearing Limited issued a notice on September 1, clarifying the physical stock handling principles related to the paperless securities market (USM), which will be officially implemented on November 16, 2026, stressing that physical stocks will continue to be effective, that de-materialization will adopt a voluntary model, and that there is no mandatory time limit.

The notice points out that after the paperless securities market came into effect, existing physical stocks in the hands of investors still have legal effect, shareholders' rights and interests are not affected, and investors do not need to passively handle deposit, withdrawal, or de-materialization operations due to system changes. The conversion of physical stocks to paperless dematerialization is a voluntary choice. There is no time limit, and investors independently decide the form of holding based on their own circumstances.

Hong Kong Settlement reminds brokerage firms and other settlement participating institutions to clearly communicate relevant rules to customers. Unless customers have actual needs, they should not actively encourage customers to handle physical stock deposits, withdrawals, and dematerialization services.

Hong Kong Settlement said it will continue to monitor market depository business trends and issue additional guidelines depending on market conditions to ensure a smooth transition in the paperless securities market.

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