Introduction of the Order Routing System By Roger Lee Senior Vice President E-Business and Information Services Hong Kong Exchanges and Clearing Limited February 2001

ORS/PNS Rollout - Purpose With the introduction of the Open Gateway Connection under AMS/3, Brokers can already develop their own order collection system through their own Broker Supplied Systems. The introduction of ORS platform will provide an alternative utility infrastructure for brokers to provide on-line trading services to investors. As a technical pre- requisite, brokers who choose to use the ORS service must either be using their own BSS or Exchange developed MWS systems. Brokers who rely on AMS/3 terminals for connection to AMS/3 will not be able to use the service. A number of research surveys have indicated that at present on-line trading amounts to a small percentage of overall Hong Kong market turnover. It will take time for it to grow, but there is vast potential.

ORS/PNS Rollout - Purpose The ORS platform provides multi-channel, multi-vendor connectivity for investors to place orders to their brokers, via:- Order placement service protected by Internet e-Cert issued by Hongkong Post, available through HKEx web site (part of Investment Service Centre), and also available from websites operated by participating Exchange Participants through hyperlinks Order collection services provided by other Proprietary Network Service vendors, including HK Stock iAsia New World Mobility (Mobile phone e-Cert) Reuters The ORS platform is an open system, and HKEx welcome additional vendor- developed channels. Through these channels, HKEx expects that brokers and investors will have more choices of services and will further enhance Hong Kong market accessibility.

Important Points to Note for Investors when Using On-line Trading Service under the ORS Channels Investors must be clients of one of the participating Exchange Participants, and have properly executed client account opening procedures and service contracts, and should have taken note of specifics, including any limitations and restrictions of the services. For those investors who chose to use HK Post e-Cert service, they must apply for an e-Cert according to Post Office established procedure. For non e-Cert based on-line trading systems, investors should take note of the associated security and authentication arrangements. On-line trading services generally are offered over open public networks such as Internet, mobile phone network, and public telephone networks. Users should have reasonable expectation with the service levels on services provided over these networks. Investors should take note of three important confirmation statuses: Acknowledgement of Trading Request Order Notification Trade Notification When in doubt, investors should enquire about status of the orders placed

AMS/3 Order Routing System - Order Flow

******** Place a Buy Order & Click Submit button

RECEIVED by Broker / 02 15:39 XYZ Securities Co Ltd Buy HKD HKD74, LIMIT 4,000

Broker Firm: XYZ Securities Co Ltd Investor ID: Address: Account No.: ORSC01 ORDER NOTIFICATION Your request has been received. Details are as follows: Type of Request: Order Placement Entered At: 09 Feb :39:53 Market Trading Date: 09 Feb 2001 Order Reference Number: 7495 Security Code/Name: HKEX (HKD) Order Side: Buy Order Type: Limit order Order Price: Order Quantity: 4000 Filled Quantity: 0 Outstanding Quantity: 4000 Request Status: Order accepted into Market Order Notification

Broker Firm: XYZ Securities Co Ltd Investor ID: Address: Account No.: ORSC01 TRADE NOTIFICATION Please be reminded your order has been executed, details and processing status are as follows. Order Details: Entered At: 09 Feb :39:53 Market Trading Date: 09 Feb 2001 Order Reference Number: 7495 Security Code / Name: HKEX (HKD) Order Side: Buy Order Type: Limit order Order Price: Filled Quantity:4000 Outstanding Quantity:0 Status:FULLY FILLED Transaction Details QuantityAt PriceTrade Time :42:40 Trade Notification