Accelerating Settlements: HKEX Considers T+1 Cycle, Plans to Consult Market Participants

HKEX is contemplating on decreasing the stock-trading settlement duration to a day

HKEX plans to discuss with market players about decreasing its cycle to a single day

HKEX intends to confer with market participants on reducing its cycle to one day

The Hong Kong Stock Exchange (HKEX) is planning to prepare a white paper that will encapsulate the financial community's views on the settlement cycle process, according to a blog post by CEO Bonnie Chan on Monday. The document is set to be released in the first half of the coming year.

Following settlement talks, the exchange plans to progress with improving its systems and developing an advanced clearing and settlement platform. This will update the technology that supports the HKEX's cash market infrastructure, enabling a one-day settlement process, referred to as "T+1", to be operational by the close of 2025.

At present, it requires a period of two days following the trading day for transaction clearance and settlement.

"Our commitment is to foster an environment that leads to success and to establish enduring resilience," stated Chan. "We're embodying the ethos of the Olympic Games to progress 'quicker, higher, and more robust – collectively."

"Boosting the vitality of our markets is crucial to this vision," Chan stated.

The initiative is a strategy to strengthen the trading platform by the Chief Executive Officer, who assumed her role in March. In her online article, she expressed that the role has proven to be more demanding yet more gratifying than she initially anticipated.