Multi-counter settlement mapping information to be integrated into three platforms: CCASS and the HKEX Orion market data platform – securities market (OMD-C).
In addition to the Mainland market data hub (MMDH); new message field being added to existing security definition (11) message in both OMD-C and MMDH.
Updated interface specifications now available on the web corner for both platforms.
Exchange participants, their CPs must jointly review pre-trade checking mechanisms.
Focus specifically on preventing any settlement failures under the new arrangement.
In Jan. 2025, HKEX enhanced settlement for multi-counter securities, see #240278.
On May 30, HKEX made enhancements to settlement arrangements.
HKEX Hong Kong Securities Clearing Company issued circular on enhancing settlement arrangement for multi-counter eligible securities, to improve scalability of their trading.
Background
Currently, trades in a multi-counter eligible security executed under the respective counters are cleared and settled in CCASS under different stock codes.
Clearing participants (CPs) are required to perform manual inter-counter transfers in CCASS to enable settlement, despite the fact that respective counters are fully fungible.
Enhancement
Eliminates need for manual inter-counter transfer of multi-counter eligible securities.
All multi-counter eligible securities, e.g. dual counter securities and exchange traded products, will be cleared and settled under this change; mandatory for CPs to follow.
Trading arrangement remains unchanged; post-trade activities will be consolidated.
There will only be one stock code/ISIN for post trade activities in CCASS, but separate continuous net settlement positions will be recorded for each currency counter.
Introduced same stock netting to streamline settlement by offsetting opposite stock positions; no offsetting for money settlements among different currency counters.
New receipt after payment mechanism introduced, CPs are expected to fulfill their money obligations in accordance with existing timeline, which will remain unchanged.
Effectiveness
Stock Exchange of Hong Kong said the enhancement will come into effect in the first half of 2025 tentatively, subject to regulatory approval and market readiness.
CPs are advised to review their systems and internal controls to comply with the new settlement arrangements and prevent potential settlement failures.
Exchange participants shall check systems and operations to ensure smooth trading; review compliance with applicable contract notes, statements of accounts, receipt rules.
Oct. 3, 2024 Update on Schedule
On Oct. 3, 2024, HKEX updated on the enhancement, scheduled to come into effect by Jun. 2025 tentatively; practice sessions for participants to be held in Q2 2025.
Further details about the practice sessions will be announced in due course.
Relevant information about the enhancement is available on the web corner.
Participants are advised to consult internal IT support teams or system vendors early for necessary preparation; early preparation is suggested for smooth implementation
Multi-counter settlement mapping information to be integrated into three platforms: CCASS and the HKEX Orion market data platform – securities market (OMD-C).
In addition to the Mainland market data hub (MMDH); new message field being added to existing security definition (11) message in both OMD-C and MMDH.
Updated interface specifications now available on the web corner for both platforms.
Exchange participants, their CPs must jointly review pre-trade checking mechanisms.
Focus specifically on preventing any settlement failures under the new arrangement.
In Jan. 2025, HKEX enhanced settlement for multi-counter securities, see #240278.
