Hong Kong Exchange (HKEX) Issues Discussion Paper on T+1 Settlement Cycle for Cash Equities Market, Implementing Improvements to Post-Trade Services for Cash Equities Market in Starting from Mid-2025 & Able to Support T+1 Settlement Cycle by End-2025
17th July | Hong Kong
The Hong Kong Exchange (HKEX) has issued a discussion paper on T+1 settlement cycle for the cash equities market. In 2024 December, the Hong Kong Exchange (HKEX) will implement improvements to post-trade services for cash equities market starting from mid-2025, and able to support T+1 settlement cycle by the end of 2025. HKEX (16/7/25): “Hong Kong Exchanges and Clearing Limited (HKEX) today (Wednesday) published a discussion paper examining the accelerated settlement for the Hong Kong cash equities market, aiming to lead market-wide discussion and build consensus with industry participants on how and when to move to a shorter settlement cycle for Hong Kong. HKEX’s cash market has been operating under a T+2 settlement cycle since 1992, while other cash markets globally have also been gradually shortening to a T+2 cycle over the past two decades. More recently, many markets have moved or are considering moving to a T+1 or faster settlement cycle. By the end of 2027, up to 88 per cent1 of cash equities globally by trade value will be in T+1 or T+0 markets, according to HKEX’s analysis based on World Federation of Exchanges and global exchange statistics. The discussion paper outlines the potential benefits and challenges of shortening the current T+2 settlement cycle in Hong Kong, referencing the experience of other jurisdictions during their transition journey, offering the basis for all stakeholders to join an informed discussion. As the discussion paper shows, transitioning to T+1 in Hong Kong brings both benefits and challenges. Potential benefits include enhanced market efficiency, reduced systemic risk, and closer alignment with global markets. At the same time, a transition also presents challenges, particularly for market participants navigating time zone differences, foreign exchange transactions, and shorter post-trade timelines. To adapt, market participants would need to upgrade systems, automate processes and coordinate across the market ecosystem to maintain efficiency and stability. For the avoidance of doubt, the settlement cycle acceleration under discussion covers secondary transactions in the Hong Kong Cash Market. Primary transactions such as Initial Public Offerings aren’t included in this discussion. HKEX will actively engage market participants and stakeholders in this discussion and welcome their feedback. Industry participants are encouraged to read this paper, consider their existing circumstances, and respond on the topics of discussion by submitting their feedback through this portal by 1 September 2025 (Monday).”
“ Hong Kong Exchange (HKEX) Issues Discussion Paper on T+1 Settlement Cycle for Cash Equities Market, Implementing Improvements to Post-Trade Services for Cash Equities Market in Starting from Mid-2025 & Able to Support T+1 Settlement Cycle by End-2025 “
HKEX CEO, Bonnie Y Chan: “As a market operator, HKEX is fully committed to supporting the continued modernisation of Hong Kong’s financial market infrastructure, ensuring that our financial ecosystem remains robust and fit for purpose. We are therefore delighted to be launching a discussion paper to lead the conversation on how and when to move to a shorter settlement cycle for our cash equities market … … In a rapidly evolving global market landscape, there is urgency to seek a way forward, and we must as a financial community collaborate and act decisively to implement necessary enhancements. By leading the conversation, we hope to build consensus and develop a detailed implementation timeline that incorporates comprehensive stakeholder feedback. We encourage market participants to actively participate in this discussion, and we look forward to hearing from you.”
Notes:
1. Markets operating under a T+1 or T+0/T+1 basis currently include Mainland China, the US, Canada, Mexico, Argentina and India, and this is expected to also include the European Economic Area, the UK, and Switzerland by 2027.
HKEX – Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code: 388) and one of the world’s leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange. As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets. HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.
Hong Kong Exchange to Implement Improvements to Post-Trade Services for Cash Equities Market in Starting from Mid-2025 & Able to Support T+1 Settlement Cycle by End-2025
13th December 2024 – The Hong Kong Exchange (HKEX) will implement improvements to post-trade services starting from mid-2025, and able to support T+1 settlement cycle by the end of 2025. HKEX (12/12/24): “Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Thursday) that it is embarking on a multi-year post-trade services enhancement programme for its cash equities market, reflecting the Group’s ongoing commitment to build future-ready market infrastructure. Starting from mid-2025, new features will be progressively added to the Orion Cash Platform (OCP), HKEX’s integrated cash market platform, to provide more advanced, reliable and efficient post-trade services for the securities market. New features include automated post-trade report download and information exchange, as well as enabling real-time transmission and processing of trade data, related positions and reference data, and real-time matching of settlement instructions. As part of the enhancement programme, HKEX’s post-trade systems will become technically ready to support a T+1 settlement cycle by the end of 2025, though any future changes to Hong Kong’s settlement cycle will be subject to extensive market engagement. HKEX will progressively introduce these new post-trade features and services on OCP, with respective release dates to be announced in due course. Meanwhile, HKEX will continue to provide core post-trade processing through its Central Clearing and Settlement System (CCASS). HKEX will engage with stakeholders and market participants on the future of CCASS as the new OCP post-trade features progressively become available … … Earlier this year, HKEX also announced plans to develop the new Orion Derivatives Platform (ODP) for Hong Kong’s derivatives market. The ODP and OCP development demonstrate the Group’s strategic focus on building the long-term resilience of Hong Kong’s market infrastructure with technology developed in-house. For more details on HKEX’s post-trade services enhancements scheduled for 2025 – 2027, please refer to the circular published today.”
HKEX Chief Executive Officer, Bonnie Y Chan: “At HKEX, we are committed to the long-term vibrancy of Hong Kong’s capital markets through ongoing investment in our technology and market infrastructure. We are pleased to be launching the modernisation programme for our cash market platform, developing the capabilities for real-time and more efficient post-trade services. The ongoing development of OCP will ensure that our markets remain well-positioned for future opportunities as they continue to expand in breadth and diversity, strengthening Hong Kong’s status as an IFC.”
HKEX Group Chief Information Officer, Richard Leung: “Platform development is a core part of HKEX’s strategy to futureproof its business and its markets. We are delighted to adopt modular architecture to introduce new post-trade features, in order to provide maximum flexibility for market adoption. We look forward to engaging and collaborating with our market participants on this infrastructure advancement journey, as together we work to enhance the competitiveness of Hong Kong’s capital markets.”
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