Chapter 5 of 612% of exam
Stock Market Administration
The plumbing of the market: the automatic order-matching system, clearing and settlement, transaction costs, internal controls and the technology behind trading.
Trading, settlement and costs
The Exchange's automatic order-matching and execution system fills orders on a price-then-time priority basis. Trades clear and settle through CCASS in dematerialised book-entry form. Transaction costs include broker commission, exchange and SFC levies, and government stamp duty on transfers of Hong Kong stock. Firms rely on internal controls such as segregation of duties to reduce error and fraud.