Hong Kong Exchanges and Clearing (HKEX) released a consultation paper on Friday proposing to shorten the share settlement cycle from T+2 to T+1, targeting implementation in the fourth quarter of 2027. The reform aims to align the city’s US$7.5 trillion market with international peers and enhance market efficiency and liquidity.
Hong Kong Exchanges and Clearing (HKEX) said in a consultation paper released on Friday that it aims to implement a “T+1” settlement system—under which trades settle one day after the transaction—in the fourth quarter of 2027, replacing the existing “T+2” cycle.
If adopted, the shortened cycle would apply to equities, exchange-traded products, structured products, real estate investment trusts and listed debt securities, HKEX said. It would also cover the physical settlement of equities resulting from exercised stock options.
The reform would align Hong Kong’s US$7.5 trillion market with international peers. The US and Canada shifted to T+1 in May 2024, while the United Kingdom and Europe were exploring the same option, according to Bonnie Chan. Mainland China has long operated under a T+1 cycle.
HKEX seeks to boost Hong Kong’s financial profile through the change, aligning with international investors and improving market efficiency and liquidity. The proposal also relates to market reform and secondary listings.
