Introduction to Uncertificated Securities Market (USM) for issuers

At present, there are only two ways to hold securities in Hong Kong listed companies:

1. As a certificated shareholder - that is, by holding paper documents of title issued by the listed company which evidence legal title ownership. The records of certificated shareholders are managed by each company's share registrar.
2. As a beneficial owner holding via HKSCC Nominees Limited (HKSCC-NOMS). In this case, typically, the investor has an account with a Clearing Participant or Custodian Participant (CP i.e. intermediaries such as a bank or broker) but HKSCC-NOMS holds the legal title to the securities, with the investor listed as a beneficial owner by the bank or broker.

The current set-up has some limitations:

• A certificated shareholder can only trade their securities on market by having their paper certificates deposited by a CP (such as a bank or broker). If an investor purchases securities but wants to hold legal title in their own name, they must ask their intermediaries to withdraw the securities from the Central Clearing and Settlement System (CCASS) and then have new certificates printed. The need for conversion from and back to paper imposes significant delays and inefficiencies in the market, as well as being less environmentally sustainable.
• As title holders, HKSCC-NOMS is responsible for handling a wide range of actions on behalf of beneficial holders - distributing dividends, interest and bonus securities, and collecting participant instructions for corporate events such as rights issues or voting on meeting resolutions. Having an intermediary between beneficial holders, issuers and their registrar create friction – additional time and costs to fulfil these actions – and less transparency from the issuer’s point of view.

Going digital – the Uncertificated Securities Market (USM)

In recent decades, global securities markets have adopted digital-first systems of title, record-keeping, communications and transaction processing. Printed forms, mailed letters and cheques have increasingly been replaced with web-based forms, online voting, email and electronic funds transfers. This has enhanced shareholder participation and benefits without any lessening of their rights.

From November 2026 on, Hong Kong will start replacing the issuance of paper-based title instruments (such as paper share certificates) with a wholly digital system for recording title. The process for converting from physical title documents to electronic book-entry systems (uncertificated securities) is known as dematerialisation.

In 2021, Hong Kong enacted an ordinance to establish the framework for the implementation of an Uncertificated Securities Market regime – USM for short. Further legislation has been enacted to cover the operation of the new USM regime, the regulation of Approved Securities Registrars (ASRs), and other particulars such as allotments, transfers, lost share certificates and new methods for collecting stamp duty relating to transfers.

Since the USM Amendment Ordinance was enacted, regulators, registrars and the HKEX have worked together to develop a model for implementing USM by the proposed start date in 2026. The model was finalised in 2024.

Computershare has committed considerable resources and expertise, both locally and globally, to fulfil the technical, operational and regulatory requirements to become an ASR under USM. Having already completed similar dematerialisation projects in other jurisdictions, we’ve been able to leverage our strong track record to play a leading role in the development of the USM model for Hong Kong.

Moving to USM

The move to an uncertificated market in Hong Kong has two main aspects:

1. Phasing out paper share certificates and replacing them with a new digital form of legal title

The new way for investors to view and manage their holdings will be using a USI facility, implemented and operated by the relevant ASR for each issuer of a participating security. This facility provides registered holders with secure digital systems to monitor, manage and control their uncertificated holdings, including initiating or affirming transfers.

The provision of digital platforms will give investors greater visibility of their holdings and more efficient ways of managing them, while also having the protection of retaining legal title at all times.

The USI facility will interface with the Hong Kong Stock Exchange’s settlement system (CCASS)  via secure digital channels, streamlining the day-to-day operations of the market.

Computershare is creating a mobile app for shareholder to manage their securities easily, efficiently and securely online.

2. Expanding the role for registrars in the Hong Kong market

Due to the vital role of the new USI facility and the increased importance of the digital title and secure digital transactional systems, only registrars that have passed an exacting series of SFC accreditation checks will be authorised to maintain a register of securities under USM; these will be known as Approved Securities Registrars (ASRs).

ASRs will operate a secure digital interface with the CCASS, reducing processing time for transfers and settlement, and replacing a range of manual, paper-based processes.

While all exchange trades will continue to be settled in CCASS via HKSCC-NOMS, investors who purchase securities can choose to hold digital title in their own name by supplying their USI name and identifier to their broker to initiate a withdrawal. Once the transfer is complete, the securities will be recorded in the investor’s name on the digital Register of Holders (ROH, maintained by the ASR). For such holdings, the company’s ASR will manage all communications and corporate events directly, improving efficiency and timeliness.

When a holder wishes to sell uncertificated securities that are held in their own name on the market, they will need to instruct their broker to initiate a deposit to HKSCC-NOMS and affirm the transfer of those securities to the broker’s CCASS account. Computershare’s platform for investors will provide shareholders with a simple way to approve these transfers.

When a certificated holder transitions to the USI facility, Computershare will establish their profile to default to receiving shareholder communications via digital channels, and for payment of all dividends to be completed electronically. These options are cheaper, faster and more secure than the current paper-based alternatives.

Computershare is making substantial investments to facilitate the transition to USM. Over time, as paper share certificates are progressively dematerialised, shareholders' ability to transact digitally will enable quicker and more efficient operations. These benefits will take time to be fully realised, though, given some investors will opt to retain their paper certificates.

Over time, we expect the take-up of the USI facility to grow as shareholders become aware of the benefits outlined above and as new investors receive their securities in uncertificated form. We can also partner with you to boost shareholder awareness and provide incentives for them to transition. However, as there is currently no mandate for investors to dematerialise their certificated holdings, all ASRs will be required to maintain current processes for these investors, although differential fee schedules may be introduced at some point to incentivise transition. The need to maintain two parallel operations for certain transactions will bring some increases in registry costs as a result.

There are mandatory features of USM that will accelerate the take-up of dematerialisation. Once a given issuer and its securities enter the USM regime (i.e. becoming a participating security): 

1. New units can only be issued in uncertificated form, including for placements, rights issues, scrip dividends and options exercises.
2. All transfers must be into a dematerialised position; all existing certificated units are dematerialised at the point of transfer. All transferees are required to have a USI profile.
3. No units can be withdrawn from CCASS in certificated form. All withdrawals must be to a holder with a USI profile.
4. Any replacements of lost or damaged title documents must be in uncertificated form to a holder with a USI profile. Equally, name changes and corrections must result in the dematerialisation of the holding as new/replacement certificates cannot be issued.
5. All securities held by HKSCC-NOMS must be dematerialised within 6 months of an issuer’s participation date for entering USM (i.e. when it becomes a Participating Security). 

Millions of title instruments are currently held in HKSCC-NOMS’s vault, representing a substantial portion of certificated securities that will be converted at an early stage of the dematerialisation process for each company. ASRs and HKSCC-NOMS will manage this as part of the onboarding of an issuer into USM.

The scope and timeline for USM

The initial scope of USM is for listed companies incorporated in Hong Kong, Bermuda, the Cayman Islands, and Mainland China. This constitutes the vast majority of issuers listed on HKEX. It is expected that issuers from other countries will be introduced in a later phase of the USM regime. This will allow lead time for any changes required for USM to align with corporate law in their own jurisdictions.

Securities within USM are referred to as prescribed securities. When they are migrated to USM, they become participating securities.

Subject to the passage of relevant subsidiary legislation and finalisation of operational details, the initial implementation of USM is scheduled for 16 November 2026. The primary significance of this date is the requirement for all HKEX listed issuers to have ASRs as their registrar, regardless of the timing of the issuer’s securities becoming participating securities. While the supporting regulatory framework and systems infrastructure for USM will go live by 2026, the first migrations of securities to participating securities are expected to begin in early 2027.

Because of the scale of the work ahead, the transition of securities to USM will need to take place in an orderly schedule over several years. By law, all eligible issuers of prescribed securities that are listed on HKEX at the start date must complete the required steps within 5 years.

The USM implementation timeline will be divided into a series of tranches, each of which contains an associated set of securities. The issuer of each security will be allocated a tranche timeslot (participation date) determined in cooperation with HKEX and the issuer’s ASR; the date at which it is expected to become a participating security under USM. Each issuer that has appointed Computershare as its ASR will be notified of their proposed timeslot well in advance, first as a date range but with increasing precision over time. The official date will be announced by HKEX Listing periodically, on a rolling basis, looking ahead multiple months. Note: there will be no trading halts around the participation date for a security, although there will be cut-off dates for transfers prior to conversion. 

As far as possible, these participation dates will be planned to avoid scheduled corporate action activities, including AGMs and cash dividend distributions. New corporate actions should not be scheduled in the window from 13 days before and 10 days after the participation date (This window may be revised through consultation between the FSR and HKEX). If you become aware of any potential issues with your date, please let us know immediately. 

The position of an issuer within the schedule of tranches will be governed by a range of considerations, including: 

• Avoiding anticipated or scheduled corporate actions
• The number of certificates in circulation (including those held by HKSCC-NOMS) and the total number of registered holders
• Other operational considerations 

Due to the complexity of this process, rescheduling will not be considered except for pressing issues. 

Hong Kong-based companies will be given priority for earlier migrations rather than later tranches, but this does not mean all issuers outside Hong Kong will be deferred to the later tranches without exception. 

The transition to USM will be relatively simple for listed companies. The bulk of the changes required will be carried out by your ASR and HKSCC-NOMS. Consequently, your choice of ASR is crucial – the capabilities of your registrar will be fundamental to the success of your company’s conversion to USM, and to the ease with which shareholders can participate in the dematerialisation process.

It is, however, important for all issuers of prescribed securities to understand their obligations under USM and the new functions their ASR will undertake; issuers should obtain their own independent legal advice in this respect. Equipped with this knowledge, issuers should engage in discussions with Computershare well ahead of time to understand the role that each party will play in meeting these new obligations and plan accordingly.

Actions for issuers – preparing for USM

The following steps must be taken by issuers of prescribed securities in scope for USM. They should be completed before the participation date of your assigned tranche; it is expected, though, that the USM legislation for companies in Hong Kong will include provisions to offer some flexibility around the completion of some actions.

1. Appoint an Approved Securities Registrar (ASR)

By USM go-live in 2026, your register of holders will need to be administered by an ASR, i.e. an approved share registry that operates a USI facility.

We anticipate that the SFC will publish a list of ASRs in Q3 2026 as they undertake the authorisation of registrars that have lodged applications. We will keep you updated on the progress of our application with the SFC.

Computershare will work with you to update existing contracts to reflect the new regulatory requirements and the provision of new services under USM. Our objective is to make the transition to USM as simple as possible for you, while complying with all of the SFC’s requirements on issuers and share registries.

If, at any point after USM goes live, an issuer of a prescribed security has not appointed an ASR, such securities may be suspended from trading.

2. Change your Articles to be consistent with USM

The SFC has included sample provisions in a Guidance Note published in July 2026. The amendments should be straightforward to draw up and bring to general meetings of the issuers to be ratified by vote. For example, the updated company articles should make it clear that physical title documents will not be issued after the participation date for that security.

SFC recommended that these changes should be adopted at your first general meeting held after USM go-live in 2026 so that you are ready for USM participation whenever it is scheduled.

3. Issue an announcement on the HKEX website

This formalises the steps above, informing shareholders and the wider market of your intention to join USM, along with the participation date. According to HKEX’s “Guide on the Uncertificated Securities Market” published in July 2026, issuers are required to make the following mandatory announcement:

1. Notification of Participation date – As soon as reasonably practicable and no later than one business day after being served a written notice by the Exchange
2. Participation plan – As soon as reasonably practicable following the finalisation of its plan for its prescribed securities to become participating securities

The above two items can be completed together.

3. Reminder – No later than 21 business days prior to Participation Date​

4. Communicate the upcoming changes under USM to their shareholders

In addition to the announcement above, HKEX also requires issuers to have a webpage dedicated to USM kept for at least one year after participating in USM.

Computershare can assist you by publishing online resources covering a range of topics, such as:

• How USM works and the benefits it offers to investors
• Applying for a USI profile with Computershare
• How to dematerialise existing certificated securities
• How to transfer holdings to and from HKSCC-NOMS, and
• New processes for on-market transactions and other transfers

We can work with you to tailor a shareholder engagement campaign that reflects your values and reinforces key messages relevant to your investors.

5. Dematerialise all securities held by HKSCC-NOMS

Within six months of your USM participation date, all units of securities held in the HKSCC-NOMS vault must be converted into uncertificated form. HKSCC-NOMS will initiate this process, returning the physical certificates to Computershare to complete verification, cancellation and recording of HKSCC-NOMS’s securities as uncertificated.

USI profiles and the USI facility

To ensure lawful and secure market operations under USM using the new digital form of title, each ASR is required to verify the identity of all registered holders in the ROH for each security. This applies to individual investors, joint holders, as well as entities such as businesses and corporate holders. The verification requirements may differ between ASRs and for different types of holders.

Once verified by an ASR, each registered holder’s identity and associated information will be recorded on that ASR’s systems – this digital record is the holder’s USI profile. This profile will then enable the shareholder to connect all of their holdings in uncertificated securities that are administered by that ASR. The holder information contained in their profile will become part of the ROH for each new holding, for instance after a transfer or IPO allocation.

To gain the full benefits of USM, a registered holder will need to apply for a USI profile from each ASR that administers one or more securities in their portfolio. Once issued with a USI profile by Computershare, a holder will be able to connect all of their holdings with that profile, both certificated and uncertificated, using our secure, dedicated platform Investor Centre Hong Kong app. Using our platform, registered holders can view and manage all of their securities that are administered by Computershare. For their uncertificated securities, most registered holders will also be able to:

• initiate transfers to other registered holders with a USI profile
• affirm or reject transfers from other holders
• affirm or reject transfers initiated by a broker via CCASS

Each USI profile will have a unique ID known as the USI identifier, which must be provided to other parties to facilitate transactions involving participating securities:

• To brokers, for transfers to or from the registered holder and HKSCC-NOMS
• To other registered holders, as part of an agreement to transfer securities to the registered holder
• To the ASR, for the allocation of new securities (e.g. through an IPO, rights issues or other events).

Registered holders should provide the USI identifier created by Computershare to other parties when dealing in securities managed by Computershare.

The USI identifier should be kept secure by the registered holder and only given to the ASR, broker or other party with which they are performing a transfer.

USM from the perspective of investors

It is important to note that there are no mandatory actions for investors following the implementation of USM. There will be no impact on investors who retain beneficial ownership of securities held by HKSCC-NOMS HKSCC Nominees Limited. Those who hold paper share certificates in securities that have been migrated to USM will not need to dematerialise them to participate in corporate events, receive dividends or attend company meetings and vote on resolutions.

ASRs will continue to provide all services currently available to certificated holders. Computershare is committed in supporting Issuers with communications and education to their shareholders. Our newly renovated counter is now open for with upgraded shareholder experience. The new counter features a ticketing system for improved time management and an investor education space in anticipation of USM launching.

Actions for investors who wish to participate in USM

1. Apply for a USI profile with each registrar (ASR) of securities of interest

For individuals (sole or joint holders), proof of identity needs to be presented – that is, a Hong Kong ID, or their passport, or other national ID, if neither of those is available.

In the case of corporations, a legal entity identifier registration document (LEI), a certificate of incorporation, a certificate of business registration, or another equivalent identity document needs to be provided.

According to the SFC’s requirements (for both individuals and corporations), if the investor does not hold the first-named document, then the next mentioned document should be provided.

The USI profile will include a range of details pertinent to the person or entity, including an associated HKD bank account in the name(s) of the holder(s), mailing address, email address, mobile phone number, and so on. If an issuer changes their ASR, holders of those securities will need to apply for a USI profile with the new ASR (if they do not already have one).

2. Connect certificated holdings with their USI Profile

Computershare will provide a digital facility (i.e. mobile app) by which investors can connect certificated holdings to their USI profile by entering their certificate numbers. This step can be taken before the security enters USM. If the same investor has multiple holdings of a security in the same name (perhaps under different holder identifiers with the same or different addresses), these must be consolidated into a single holding before this step can be completed.

3. Dematerialise certificated holdings

As USM progresses, investors with a USI Profile can dematerialise some or all of their certificated holdings after they become participating securities. Importantly, the holding must be in the same name as their USI profile. This will involve returning the physical title documents for every holding to be dematerialised, completing an authorisation and paying any applicable fees. Each certificate to be dematerialised must be extinguished in full and this step cannot be reversed after the fact.

4. Move participating securities held by HKSCC-NOMS to their own title

After a security becomes a participating security, investors with brokerage accounts may opt to move their holdings from beneficial ownership (with HKSCC-NOMS as the title holder) to their own name on the issuer’s Record of Holders (i.e. within the USI facility implemented by the issuer’s ASR). To do so, the holder would instruct a broker (or other CP) to initiate the transfer via CCASS. After receiving a notification from the ASR, the investor can then log in to the USI facility to affirm the transfer.

The same applies when making new investments. When an investor with a USI profile purchases a participating security, instead of keeping them in their brokerage account as a beneficial owner, they can have those units added to the register of holders, with title under their own name, by providing their USI name and identifier to their broker to initiate a withdrawal.

Steps 3 and 4 can both be done on a per security basis. For instance, a shareholder may choose to dematerialise certificated securities held with Company BCD, but retain them in Company XYZ, even if those two companies have the same ASR.

Why you should appoint Computershare as your Approved Securities Registrar

Our team

Computershare’s advantage is our unique combination of local talent and global expertise. Our Investor Services teams have extensive experience in Hong Kong and China markets; this is supplemented by many people in other countries who have led similar projects in their own jurisdictions. These include leaders in technology, a crucial element in enabling USM and the enhanced services that follow.

Next steps

This introductory information is the first we will be releasing. While our primary focus will be providing you with details on the topics that are most useful to issuers, we will also be publishing guides for your shareholders, carefully crafted to make USM easy for them to understand. These will provide clear guidance on the actions they can take to gain the full benefits of USM, as well as how to use the new platform we will provide to streamline their journey. More broadly, Computershare is committed to providing leadership across the Hong Kong market as a whole, to ensure all market participants are well prepared for the introduction of the USM regime.

Resources

• Federation of Share Registrars Limited (FSR)
  Information Paper for Issuers and Shareholders – Implementation of an Uncertificated Securities Market (USM) in Hong Kong
• Hong Kong Exchange
  Useful information for intermediaries
• SFC
  Information on Uncertificated Securities Market

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Computershare accepts no responsibility for any loss or damage arising directly or indirectly from the use of or reliance on any information contained in this webpage. Nothing in this information paper constitutes legal or other professional advice. You should obtain independent legal or other professional advice before taking actions relating to any matters provided in this webpage.