1. Structure and Role of Financial Market

2. Learning points of this lesson Describe the roles of different participants in the financial market.

3. Class activity (5 mins) Identify any three participants in the financial market on the contract notes and state their roles in the market. Participants in the Financial Market A real contract notes of the teacher (covering the address)

4.  Retail investors are individual investors To provide capital for the financial market and listed companies Two types of investors: retail investors and institutional investors  Institutional investors are organisations the hold a large amount of capital Participants in the Financial Market Investors An real contract notes of the teacher (covering the address) Part of the contract notes showing your name My photo

5. The securities of listed companies are traded on a stock exchange The capital raising activities of listed companies can improve the image of the financial market If the listed companies can maintain good corporate governance, the investors’ confidence can be raised Participants in the Financial Market Listed Companies Replaced with the company shown on your contract notes

6. Stock brokers have to obtain a license issued by the Securities and Futures Commission before they executive trades of any securities for their clients Stock brokers act as an agent which are responsible for managing the transactions between the buyers and sellers Participants in the Financial Market Stock Brokers Replaced with the broker’s name shown on your contract notes E.g. securities companies, bank

7.  To receive trading orders from clients  To input the order for sale and purchase of securities into the computer-trading system of HKEx  To notify clients that the transactions have been completed The roles of stock brokers are: Participants in the Financial Market Stock Brokers

8. To regulate and supervise the operations of the financial market To protect people who invest in financial products To set standards for authorisation of financial products and licensing standards for intermediaries Participants in the Financial Market Regulators Replaced with that part shown on your contract notes

9. To set and enforce market regulations To educate the public about the financial market of Hong Kong Participants in the Financial Market Regulators HKEx defends `secret' decision 07/08/2012 Hong Kong Exchange and Clearing (0388) yesterday defended its decision to allow China High Precision Automation 中國高精密 (0591) to resume trading. The mainland firm had earlier hidden part of its operation from auditors, citing "national security" concerns. http://finance.thestandard.com.hk/en/business_news_view.asp?aid=125097 Replaced with more updated news relating to SFC To license and supervise intermediaries seeking to conduct regulated activities To supervise market operators

10. Participants in the Financial Market Replaced with that part shown on your contract notes HKEx is the frontline regulator of issuers listed in Hong Kong. Regulators It strictly enforces its listing, trading and clearing house rules in order to maintain open, fair, transparent and efficient markets in accordance with international standards and best practices Kong.

11. Conclusion Participants in financial market _______________ _________ companies Share. Stock. Regulators - _____________________ Bank

12. Conclusion Participants in financial market Investors Listed companies Stock brokers Regulators - Securities and Futures Commission - Hong Kong Exchanges and Clearing Limited Bank

13. Test your learning 1)In Hong Kong, retail investors can trade listed securities on the stock exchange by themselves. True/False

14. Test your learning 1)In Hong Kong, retail investors can trade listed securities on the stock exchange by themselves. True/False Retails investor need to trade securities on HKEx through Stock brokers (E.g. securities company, bank)