Hong Kong to speed up stock settlement time to catch up with West, mainland China
HKEX proposes to shorten stock settlement cycle from current two days after transactions to one day to bolster city as global financial centre
Hong Kong will consider shortening the stock trading settlement cycle to one day after the transaction, as well as attracting more international firms to have secondary listings in the city, to strengthen the city’s status as an international financial centre, according to Financial Secretary Paul Chan Mo-po’s budget speech on Wednesday.
The United States and Canada shortened their stock trading settlement times to T+1 in May 2024, while the United Kingdom and Europe are exploring the same option, according to HKEX CEO Bonnie Chan Yiting. The T+1 cycle has always been the norm on mainland China.
The accelerated settlement time would enhance market efficiency and liquidity, which would boost Hong Kong’s stock market turnover, said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators.
The market’s average daily turnover stood at HK$272 billion (US$34.7 billion) in January, an increase of 89 per cent from a year earlier, according to HKEX data.
The financial secretary also said the HKEX would introduce more listing reforms to provide specific guidelines for overseas companies seeking secondary listings in Hong Kong, as well as to add more overseas stock exchanges as recognised bourses.
