On 18 Aug 2025, the HKMA urged Authorized Institutions to prepare for a potential transition to T+1 settlement in Hong Kong's cash equity market, following HKEX's proposal to accelerate from T+2. The HKMA emphasized that AIs must assess operational, liquidity, and client service impacts, enhance systems, and collaborate with HKEX and industry participants to facilitate a smooth transition, noting many AIs are already prepared based on overseas experience.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
Opening Bank Accounts: Duties of Banks in Hong Kong to Combat Tax Evasion
Hong Kong money laundering laws require banks to assess the risk of tax evasion in evaluating bank account opening applications. Prospective customers applying
Opening a Bank Account in Hong Kong: Latest Regulatory Developments
For many new businesses, opening a bank account is a mission critical task. Unfortunately, as a result of significant growth in laws intended to combat money l
SPOTLIGHT ON
FAMILY OFFICES
Introduction and Context
On 18 Aug 2025, the Hong Kong Monetary Authority (HKMA) issued a letter to all Authorized Institutions (AIs) encouraging early preparations for an accelerated settlement cycle in the Hong Kong cash equity market, following a discussion paper published by Hong Kong Exchanges and Clearing Limited (HKEX) on 16 July 2025 proposing a transition from the current T+2 to a T+1 settlement cycle.
HKEX Proposal and HKMA's Position
HKMA acknowledges HKEX's discussion paper, which highlights that transitioning to T+1 settlement would enhance market efficiency, reduce risk, and strengthen Hong Kong's status as a leading international financial centre. While noting that many AIs have indicated readiness for the change based on overseas experience with T+1 or T+0 settlement, HKMA emphasizes that the banking sector's preparedness is critical for a successful transition.
Key Preparation Requirements for AIs
HKMA directs AIs to proactively assess the impact of accelerated settlement on business activities, operations, liquidity, funding arrangements, and client service delivery, particularly given the significant participation of international investors in Hong Kong's equity market. AIs are required to allocate sufficient resources to enhance systems, infrastructure, and operations, engage with service providers and vendors, and actively participate in industry-wide testing with HKEX to ensure a smooth transition.
View the full article:Source
