The Zhitong Finance App learned that on October 16, the Hong Kong Stock Exchange published a consultation summary document on shortening the Hong Kong stock spot market settlement cycle, showing that the market broadly supports the Hong Kong stock market in implementing the T+1 settlement cycle. Following the comprehensive opinion, HKEx plans to complete the relevant transition in the second half of 2028, provided that the market is ready and approved by regulators.
The consultation received a total of 109 unique responses from market stakeholders such as brokers, custodians, investment managers, industry associations, technology suppliers, and investors. Respondents endorsed Hong Kong's adoption of a T+1 settlement cycle and agreed that this move would help improve market efficiency, reduce settlement risk, improve capital efficiency, and strengthen Hong Kong's competitiveness as an international financial center.
HKEx Group CEO Chan Yi-ting said she was pleased that market participants agreed on the strategic importance of the Hong Kong securities market moving towards T+1 and strongly supported the promotion of this important market infrastructure upgrade. Adopting the T+1 settlement cycle helps reduce settlement risks, enhance capital efficiency and strengthen market resilience, further enhance the attractiveness and global connectivity capabilities of the Hong Kong market, and promote the integration of Hong Kong's market infrastructure with the international community.
Respondents put forward a number of comments on the implementation plan, focusing on additional operating arrangements after shortening the settlement cycle; ensuring that securities are properly prepared before settlement; improving the level of automation and the quality of settlement and settlement data; and coordinating the industry's preparations for the transition.
After comprehensively considering the relevant opinions, HKEx will adopt the following three-tier implementation plan to ensure a smooth market transition:
Tier 1: Enhancing HKEx's post-trade infrastructure and operating model;
Level 2: Develop targeted workflow tools and services;
Level 3: Coordinate industry-wide market practices and carry out related preparations for arrangements other than HKEx's infrastructure and operating model.
At the first level, the Hong Kong Stock Exchange will adopt an optimized T+1 settlement operation model, which includes extending the processing period for settlement instructions, increasing the number of settlement instructions that do not require payment, providing risk reports early, and an application program interface (API) on the Pioneer Star Spot Platform (OCP) to enable real-time input and status updates of settlement instructions, and support real-time matchmaking.
At the second level, HKEx will develop new workflow tools, including a clearing and settlement data repository and providing a settlement status display to enhance the level of transparency and automation of settlement and enhance the quality of standard settlement instructions (SSI) data. HKEx will also continue to communicate with stakeholders on transaction allocation and confirmation matching, automation of settlement instructions, and other application scenarios conducive to widespread market adoption.
At the same time, the Hong Kong Stock Exchange will also launch an exchange-traded product (ETP) platform to promote the digitalization and standardization of subscription and redemption activities in the ETF primary market under the conversion agent model, and support the transition of the ETP market to T+1.
At the third level, HKEx will coordinate the market ecosystem to prepare for the transition to T+1, including actively communicating with the market and industry associations, and promoting the establishment of industry working groups. HKEx will hold a briefing session in 2026 to further explain the relevant arrangements and support the industry in coordinating end-to-end preparations.
With the support of the T+1 and HKEx three-tier implementation plans across the market, Hong Kong's settlement and settlement value chain and spot market processes will be further streamlined, and the level of market modernization will also be further enhanced.
Chen Yiting continued, “The transition to T+1 is a comprehensive market transformation that requires the joint efforts of all sectors of the market. HKEx is committed to providing the infrastructure, tools and support required for implementation, while working closely with all stakeholders to ensure market readiness. We sincerely thank everyone who provided very constructive comments during the consultation process and encourage the industry to begin early preparations to work together to promote a smooth and successful transition to the market.”
In accordance with Hong Kong's local market principles, Hong Kong Stock Connect will continue to use Hong Kong's settlement arrangements and transition to T+1 simultaneously. HKEx will work closely with China Securities Registration and Settlement Co., Ltd. and related parties to facilitate an orderly transition in the market.
HKEx will conduct market testing and readiness assessments at a later stage to help market participants familiarize themselves with the new and revised operating arrangements. The final implementation date will be announced separately based on regulatory approval and market preparations.