Hong Kong proposes shortening the settlement cycle for Hong Kong's cash equities market from two days to one.
The local bourse on Wednesday published a discussion paper and said it aligns with a worldwide trend expected to cover nearly 88 percent of global equity trades by value around end-2027.
Hong Kong Exchanges and Clearing (0388) said the shift to T+1 would require several years to complete, citing the need for market readiness.
It has set a deadline of September 1 for stakeholders to submit feedback on the proposed change.
The move follows similar transitions in major markets, including the United States and India, both of which adopted T+1 settlement in recent years.
HKEX noted that Australia, the European Economic Area, the UK and Switzerland are also actively studying the transition.
Hong Kong has used the T+2 settlement cycle since 1992.
While no formal timeline has been set for implementation, HKEX said it would consider the progress of global markets and local readiness when determining the transition schedule.
The proposed shift is expected to impact the entire cash equities value chain and supporting infrastructure.
HKEX plans to work with industry stakeholders to explore operational models for T+1 and will conduct comprehensive market-wide testing ahead of implementation.
The exchange said it will seek regulatory approval before launching a T+1 settlement in Hong Kong.
HKEX chief executive Bonnie Chan Yi-ting said the operator is fully committed to supporting the continued modernization of Hong Kong's financial market infrastructure, ensuring that the local financial ecosystem remains robust and fit for purpose.
STAFF REPORTER
