Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 3

The industry worldwide must satisfy the need for efficient, fast settlement by full adherence to the International Securities Numbering process (ISO 6166) and uniform usage of ISO 15022 based standards for all securities messages. The industry should seek to introduce a global client and counterpart identification methodology (BIC - ISO 9362) to further facilitate straight through processing. Applications and programmes should be structured in such a way as to facilitate open inter-action between all parties.

1.	Does the market use ISIN as the primary securities identification code?	No. At present, ISIN codes are kept for record purpose by the SEHK for locally listed securities. However, the market is using the local stock codes assigned by SEHK as the primary securities identification code. CCASS is being enhanced (the current "CCASS/3" project) to accept ISIN as the primary securities identification code and will technically be ready by mid 2002.
2.	Are the major participants in the market linked electronically?	Participants (other than investor participants) can access the FinNet (the "Financial Infrastructure Network" of Hong Kong) which has been built by the SFC to provide a community network to interconnect all financial institutions in Hong Kong. FinNet provides both infrastructure services and business services. The former is provided by FinNet as the network services to the user community, whilst the latter is provided by business services providers to effect straight through processing and other financial transaction services. Currently participants of HKSCC are connected to the CCASS host computer via the CCASS proprietary network using the CCASS terminals. This network is being enhanced as part of the CCASS/3 project. A CCASS/3 WAN will be implemented by mid 2002 that will allow participants direct access to FinNet if required.
3.	Does the depository communicate using true (i.e. not bilaterally agreed on sub-standards) ISO standards for securities messaging?	Not at present. CCASS/3 will adopt ISO 15022 as the message standard for communication, which will be ready by mid 2002.
4.	Does the market operate standard identification codes for counterparties or client accounts and, if so, how do (or could) these fit into a single global identification methodology?	Not at present. CCASS/3 will be able to accept BIC as the standard identification code for counterparties, which will be technically ready by mid 2002.