HKEX proposes halving share settlement cycle in bid to boost Hong Kong’s financial profile
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HKEX proposes halving share settlement cycle in bid to boost Hong Kong’s financial profile
03 mins
The city’s bourse operator said in a consultation paper on Friday that it aimed to implement a “T+1” system – under which trades are settled one day after the transaction – in the fourth quarter of 2027, replacing the existing “T+2” cycle.
If adopted, the shortened cycle would apply to equities, exchange-traded products, structured products, real estate investment trusts and listed debt securities, HKEX said. It would also cover the physical settlement of equities resulting from exercised stock options.
“Moving to T+1 is a key step forward as we further elevate the competitiveness of Hong Kong’s markets – making transactions safer, faster, and more robust, while laying the foundation for more infrastructure enhancements and innovations,” HKEX CEO Bonnie Chan Yiting said in a statement. “We invite the industry to share their feedback and start preparing for this important transition, joining us to build a stronger, more vibrant marketplace together.”
The proposal comes less than two months after Financial Secretary Paul Chan Mo-po flagged the plan in his budget speech in February. HKEX first floated the idea in July last year but did not specify a time frame for the change. The four-week consultation period ends on May 18.
The reform is a key step forward to further elevate the competitiveness of Hong Kong’s markets, according to Bonnie Chan. Photo: May James
The reform would align Hong Kong’s US$7.5 trillion market with international peers. The US and Canada shifted to T+1 in May 2024, while the United Kingdom and Europe were exploring the same option, according to Bonnie Chan. Mainland China has long operated under a T+1 cycle.
