Insights
Hong Kong prepares to move its cash market to T+1 settlement
Hong Kong is preparing for T+1 settlement transition in Q4 2027. This marks a major post-trade market structure change, aligning its cash market settlement cycle with the US, Europe, and other major capital markets. The shift will pressure operational readiness, automation, settlement efficiency, FX funding, and cross-border liquidity management for brokers, custodians, asset servicing teams, and global investors.
What’s next post T+1?
The US, along with Canada, Mexico, Argentina, Peru and Jamaica, successfully migrated from a T+2 settlement cycle to T+1 in late May, joining India and China as trailblazers in settling trades just one business day after transaction. The total stock market capitalisation of these eight countries combined accounts for over 60% of the global market. This not only spurs other markets to expedite their own transitions to T+1, but also sparkles interest in looking for ways to slash the settlement cycle further.
Countdown to T+1
Finance firms worldwide are waking up to implications of T+1 settlement and most are unprepared for the conversion.
Moving to T+1 settlement
Shortening the securities settlement cycle to T+1 will have a profound impact on global financial markets, helping to cut risk in volatile markets. In the Asia Pacific, India has begun T+1 implementation with a phased approach.