• T+1 settlement launch targeted for second half of 2028, taking into account market feedback
• HKEX to adopt three-layer approach to support and facilitate industry’s transition to T+1
• Market participants encouraged to begin preparing their systems and operations

Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to present its Consultation Conclusions on Accelerated Settlement for the Hong Kong Cash Market, confirming broad market support for advancing Hong Kong’s securities market to a T+1 settlement cycle. Taking into account stakeholder feedback, HKEX now targets T+1 implementation in the second half of 2028, subject to market readiness and regulatory approval.

The consultation received 109 non-duplicated responses from brokers, custodians, investment managers, industry associations, technology providers, investors and other stakeholders. Respondents showed strong support for the transition to T+1 settlement, recognising its potential to enhance market efficiency, reduce settlement risk, improve capital efficiency and strengthen Hong Kong’s competitiveness as an international financial centre.

HKEX Chief Executive Officer, Bonnie Y Chan, said: “We at HKEX are pleased to be moving ahead with this significant market infrastructure enhancement, with the broad support from participants reflecting a shared recognition of the strategic importance to move Hong Kong’s securities market to T+1. By reducing settlement risk, improving capital efficiency and strengthening market resilience, T+1 will reinforce the attractiveness and connectivity of Hong Kong’s markets, whilst keeping our infrastructure aligned with the continued evolution of major international markets.”

Consultation feedback identified several key focus areas for the transition to T+1, such as managing the increased operational demands from a compressed settlement cycle; ensuring securities availability and settlement preparation in a timely manner; enhancing automation and settlement data quality; and affirming the critical role of industry-wide coordination and readiness.

Following careful consideration of the feedback and to facilitate the transition, HKEX will adopt a three-layer implementation framework that covers:

• Layer 1: Enhancements to its own post trade infrastructure and operating model
• Layer 2: Development of targeted workflow tools and services
• Layer 3: Industry-wide coordination on market practices and ecosystem readiness for topics outside of its own infrastructure and operating model

In the first layer, HKEX will implement a refined T+1 settlement operation model across its market infrastructure. This includes extending Settlement Instruction processing windows, introducing additional free-of-payment¹ settlement runs, providing risk reports earlier, and enabling real-time Settlement Instruction input and status updates via Application Programme Interface (API), as well as real-time matching through the Orion Cash Platform (OCP).

As part of the second layer, HKEX will develop value-added workflow tools, including a Settlement Profile Repository and Status Dashboard, to enhance settlement visibility, automation and the quality of Standing Settlement Instructions (SSI) data. HKEX will continue its engagement with stakeholders on trade allocation and confirmation matching, settlement instruction automation and other use cases that may support wider market adoption.

In parallel, HKEX will also support the Exchange Traded Product (ETP) market’s transition to T+1 through an ETP platform that facilitates the digitalisation and standardisation of ETF primary market creation and redemption activities under the conversion agent model.

Considering the importance of market ecosystem readiness as part of the third implementation layer, HKEX will proactively engage the market, industry associations, and facilitate the establishment of industry working groups. As a start, HKEX will host industry townhalls in 2026 to provide further details on arrangements to support the industry’s coordinated end-to-end preparation.

The journey to T+1, together with HKEX’s measures and the industry’s support across the three layers, presents a unique opportunity to streamline and modernise Hong Kong’s settlement value chain and cash market.

Ms Chan added: “The transition to T+1 is a market-wide transformation that will require coordinated effort across the entire industry. HKEX is committed to delivering the infrastructure, tools and support needed for implementation, whilst working closely with market participants to ensure readiness. We sincerely thank all the stakeholders for their very constructive feedback during the consultation process, and we encourage them to start preparing early as we work together towards a smooth and successful transition.”

Consistent with the home market principle, Southbound Stock Connect transactions will continue to follow Hong Kong’s settlement arrangements and advance to T+1 as well. HKEX will work closely with China Securities Depository and Clearing Corporation and relevant stakeholders to facilitate an orderly transition.

To support the market’s readiness preparations, HKEX also published an Information Paper and will provide further technical specifications on a dedicated webpage. Market participants are encouraged to begin reviewing and preparing their systems and operational arrangements for the transition to T+1 settlement.

Industry-wide testing and readiness assessments will be conducted at a later stage to help market participants familiarise themselves with the new and updated arrangements. HKEX will announce the exact transition date in due course, subject to regulatory approval and market readiness.

The Consultation Conclusions and respondents’ feedback are available on the HKEX website.

Source: HKEX