Hong Kong to launch one-day settlement in second half of 2028

Oct 16 (Reuters) - Hong Kong's securities market aims to transition to a T+1 settlement cycle by the second half of 2028, replacing its current T+2 system, Hong Kong Exchanges and Clearing 0388.HK said on Friday.

Here are more details:

• Under a T+1 settlement cycle, securities transactions are settled one business day after the trade date, as compared with two business days under the prevailing T+2 settlement cycle

• The T+1 settlement system has been adopted by the US, while Europe has plans to do so in 2027

• By reducing settlement risk, improving capital efficiency and strengthening market resilience, T+1 will reinforce the attractiveness and connectivity of Hong Kong's markets, said HKEX Chief Executive Officer Bonnie Y Chan.

• The exchange operator said it will implement the new settlement plan in three layers: upgrading its post-trade systems, developing workflow tools and services, and coordinating with the industry on broader market readiness.

• "The transition to T+1 represents an important step in maintaining Hong Kong's competitiveness as an international financial centre and ensuring alignment with developments in global markets," said Rico Leung, executive director of Supervision of Markets at the Securities and Futures Commission, in a separate statement.