What are the stamping requirements for listed Hong Kong stock where the stamp duty is paid through SEHK to Stamp Office?
In relation to sale and purchase of listed Hong Kong stock where the stamp duty is paid through SEHK to the Stamp Office, the contract note is regarded as ‘stamped’ if the following requirements are met:
Imprint on the contract note of:
Stamp duty amount (in Hong Kong dollar); and
A note to the effect that the amount of stamp duty has been or will be paid through a recognized exchange company.
(For example: “the stamp duty imprinted herein has been / will be paid through the Stock Exchange of Hong Kong Ltd.”)
Is there any transitional arrangement for stamping of a contract note for non-HKD listed products?
Stamp duty has to be shown and imprinted on the contract note in Hong Kong dollars even if the Hong Kong stocks are denominated in a currency other than HKD (e.g. RMB or USD) so that the investor knows the amount of stamp duty paid in Hong Kong dollars to the Stamp Office. Recognising that the industry may have difficulties to make the necessary changes to their systems within a short period of time and for the purpose of compliance with the Stamp Duty Ordinance, it is agreed that, as a transitional arrangement, an existing note be amended as follows:
“We confirm that the stamp duty imprinted herein has been / will be paid through the Stock Exchange of Hong Kong Ltd. Where the consideration is in a foreign currency, the stamp duty paid / to be paid will be based on the Hong Kong dollar equivalent of the consideration at the rate of exchange prescribed by the Stamp Duty Ordinance (Cap 117).”
How to imprint the specified note on the contract note for non-HKD listed products ?
So long as the specified note appears on the contract note, legible and can be clearly identified as made by the parties concerned, it will be acceptable.
How to calculate stamp duty for non-HKD listed products?
The stamp duty rate is 0.1% of the amount of the consideration or of its value on every sold note and every bought note. For stamp duty purposes, if the consideration is in a currency other than HK dollar, it should be converted into Hong Kong dollars by using the rate of exchange determined by the Hong Kong Monetary Authority.
Purchase of 10,000 XYZ shares @RMB 12.52 on T day
Exchange rate: 1.176 for T day
Step 1: Consideration in HK$ equivalent:
10,000 x RMB12.52 x 1.176 = HK$147,235.20
Step 2: Stamp duty in HK$:
HK$147,235.20 x 0.1% = HK$148 (round up to the nearest $)
How can I find the rate of exchange for calculating the stamp duty?
To facilitate the calculation of stamp duty to be paid through the SEHK for transactions in RMB and USD, the exchange rates for each trading day are made available on the HKEx website by 11:00 am or earlier on that day.