HKEK releases paper on T+1 move for cash markets
20 April 2026 Hong Kong
Image: YiuCheung/stock.adobe.com
Hong Kong Exchanges and Clearing (HKEX) has published a consultation paper on accelerated settlement for the Hong Kong cash market.
The paper outlines the proposed operational model to shorten the settlement cycle for Hong Kong’s cash market to T+1 from the current T+2, and seeks public comment.
Subject to market readiness and regulatory approval, the transition to a T+1 settlement cycle in the cash market is intended to take place in the fourth quarter of 2027.
The stock exchange has proposed certain amendments to the existing operating model covering the cash market trade lifecycle, which include adjustments to the timing of clearing procedures, as well as settlement-related processing to facilitate timely and orderly settlement under a shortened cycle.
The existing delivery-versus-payment framework and batch settlement structure will remain unchanged.
HKEX also proposes to extend service windows for settlement-related activities such as settlement instruction input and matching, providing participants with greater flexibility to complete their post-trade processing ahead of settlement.
The existing clearing risk management framework would continue to apply, with certain timelines adjusted to reflect the shorter settlement cycle.
Based on feedback from the discussion paper, HKEX will consider developing a tool that enhances operational efficiency for institutional market stakeholders, including investment managers, custodians, and brokers, under the T+1 settlement model.
The proposed T+1 settlement cycle would apply to secondary market exchange trades, including equities, exchange traded products, structured products and debt securities, as well as the physical settlement of equities arising from stock options exercise and assignment.
Initial public offerings and Stock Connect Northbound trading would continue to operate based on their existing settlement timetables.
HKEX encourages market participants to review their securities and money-side activities, such as securities borrowing and lending, funding, and foreign exchange arrangements, in order to support the proposed changes.
The newly released paper follows a previous discussion paper in which feedback indicated an overall support for Hong Kong’s cash market to move to a shorter settlement cycle.
HKEX CEO Bonnie Y Chan says the stock exchange is committed to “future-proofing Hong Kong’s market infrastructure” and are consulting the market on its proposed operational model for a T+1 settlement framework.
“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,” she adds.
The consultation period will close on 18 May 2026. Interested parties are invited to respond to the consultation paper by filling out and submitting a questionnaire on the HKEX website.
The paper outlines the proposed operational model to shorten the settlement cycle for Hong Kong’s cash market to T+1 from the current T+2, and seeks public comment.
Subject to market readiness and regulatory approval, the transition to a T+1 settlement cycle in the cash market is intended to take place in the fourth quarter of 2027.
The stock exchange has proposed certain amendments to the existing operating model covering the cash market trade lifecycle, which include adjustments to the timing of clearing procedures, as well as settlement-related processing to facilitate timely and orderly settlement under a shortened cycle.
The existing delivery-versus-payment framework and batch settlement structure will remain unchanged.
HKEX also proposes to extend service windows for settlement-related activities such as settlement instruction input and matching, providing participants with greater flexibility to complete their post-trade processing ahead of settlement.
The existing clearing risk management framework would continue to apply, with certain timelines adjusted to reflect the shorter settlement cycle.
Based on feedback from the discussion paper, HKEX will consider developing a tool that enhances operational efficiency for institutional market stakeholders, including investment managers, custodians, and brokers, under the T+1 settlement model.
The proposed T+1 settlement cycle would apply to secondary market exchange trades, including equities, exchange traded products, structured products and debt securities, as well as the physical settlement of equities arising from stock options exercise and assignment.
Initial public offerings and Stock Connect Northbound trading would continue to operate based on their existing settlement timetables.
HKEX encourages market participants to review their securities and money-side activities, such as securities borrowing and lending, funding, and foreign exchange arrangements, in order to support the proposed changes.
The newly released paper follows a previous discussion paper in which feedback indicated an overall support for Hong Kong’s cash market to move to a shorter settlement cycle.
HKEX CEO Bonnie Y Chan says the stock exchange is committed to “future-proofing Hong Kong’s market infrastructure” and are consulting the market on its proposed operational model for a T+1 settlement framework.
“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,” she adds.
The consultation period will close on 18 May 2026. Interested parties are invited to respond to the consultation paper by filling out and submitting a questionnaire on the HKEX website.
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