On Jun. 13, 2025, HKEX issued supplemental information on settlement arrangement enhancement for multi-counter eligible securities in the ETF primary market.
The single tranche multiple counters arrangement will be launching on Jun. 30, 2025.
All ETF primary market activities for multi-counter ETFs and multi-counter eligible securities in underlying basket will be displayed under domain settlement counter.
Domain settlement counter refers to stock code of trading counter in HKD, or for multi-counter ETF paired with RMB/USD only without HKD trading counter, RMB stock code.
Participating dealers (PDs) must input CCASS stock code of domain settlement counter in ETF in-kind creation/redemption and ETF book-entry deposit/withdrawal instructions to CCASS; those using stock code of non-domain settlement counter will be rejected.
PDs must use domain settlement counter for the forms as listed in the circular.
Current ETF creation and redemption process, submission channels, and instructions/ authorization forms remain unchanged; relevant information on HKEX web corner.
On Jan. 15, HKEX enhanced settlement for multi-counter securities.
HKEX introduced enhancement to settlement arrangement for multi-counter eligible securities in CCASS, known as single tranche multiple counters (STMC)arrangement .
Follows HKEX May 2024 made enhancements to settlement arrangements, #213928.
Enhancement
Streamline post-trade activities by combining them under domain settlement counter.
Domain settlement counter means the HKD counter and reflects the stock code of the HKD counter, or another currency counter of a multi-counter eligible security.
HK Securities Clearing Company (HKSCC) will automatically convert shareholdings from other currency counters to the domain settlement counter on the effective date.
Investor participants (IPs) do not need to submit multi-counter transfer instructions.
IPs must use CCASS stock code of the domain settlement counter in their instructions, as any use of stock codes from other currency counters will result in rejection.
Supplemental Information
Single ISIN will be assigned to all trading counters of same multi-counter eligible security, replacing current practice of separate ISINs for different currencies.
HKSCC is working on revising ISIN guidelines for HK-specific assignment practices.
Revised guides will remove exception of having separate ISINs for different currency.
Clearing participants (CP) must input CCASS stock code or ISIN of domain settlement counter; instructions with other currency counters' codes or ISINs will be rejected.
Effectiveness
The enhancement is expected to take effect in Jun. 2025.
Mar. 2025 Migration Preparation
On Mar. 21, 2025, HKEX published a set of sample migration reports to web corner and encouraged CPs to study those reports to prepare for migration of the enhancement.
HKEX will hold participant webinars on Apr. 23, 25, and 28 to share information re the implementation of the enhancement, including the rollout approach and timeline.
CPs should nominate no more than 2 representatives to attend; registration required.
HKEX advised CPs to review their funding arrangement, in particular, their adequacy of funding and banking facilities for non-Hong Kong dollars (i.e., RMB and USD).
CPs shall consult the internal IT support units/system vendors for the implementation.
Apr. 2025 Practice Session and Revised FAQ
On Apr. 23, 2025, HKEX issued circulars regarding registration for practice session for enhancement of settlement arrangement for multi-counter eligible securities in CCASS.
Enhancement is tentatively scheduled to take effect in Jun. 2025, subject to approval.
Optional practice session for exchange participants (EPs) scheduled for May 24, 2025.
3 readiness checks are scheduled: connectivity test on May 17, 2025 (optional), practice session 1 on May 24, 2025, mandatory for clearing participants (CPs) clearing cross-counter trades, practice session 2 on Jun. 7, 2025 (for CPs that fail session 1).
EPs who wish to participate must complete, submit registration form by May 21, 2025.
CPs wish to register test and practice sessions must be completed by May 9, 2025.
EPs and clearing participants are advised to review and adjust their internal systems and operational setups to ensure a smooth transition and avoid settlement failures.
HKSCC has further updated the FAQ to provide more detailed information regarding the enhancement, particularly the migration arrangements outlined in part 6 of FAQ.
CPs are strongly encouraged to review revised FAQ and study the migration sample available on web corner to adequately prepare for migration scheduled for Jun. 2025.
May 2025 Enhanced Settlement Arrangement
On May 29, 2025, HKEX said the enhanced settlement arrangement will be launched Jun. 30, 2025 following the successful practice session held on May 24, 2025.
HKEX will announce the list of securities to be included in the migration on Jun. 16, 2025, and the mapping file will be distributed via CCASS terminal on Jun. 27, 2025.
From Jun. 30, 2025 onward, the settlement mapping data will also be available.
HKEX will migrate holdings, unsettled CNS/IT positions, SI/ISI transactions, stock collateral of multi-counter eligible securities to domain settlement counters on Jun. 28.
For corporate actions, non-voting instructions remain valid, while voting and proxy instructions will be transferred to the domain counter and may require authorization.
From the launch date, instructions must use the domain settlement counter’s stock code or they will be rejected; single ISIN will apply to all counters of a security.
Updated settlement fees apply to trades from Jun. 30, 2025; trades on Jun. 27, 2025 remain under old fee structure; post-release verification will be held on Jun. 28, 2025.
On May 30, 2025, HK SFC updated FAQs on Contract notes, statements of accounts and receipts rules, explaining the STMC arrangement which takes effect Jun. 30, 2025.
Intermediaries have flexibility in presenting the securities held under the arrangement.
They may present them as an aggregated holding across all currency counters, showing total quantity, closing price of one counter, and corresponding market value.
Optionally, they may also consider including the closing prices of other counters.
They may also report stock as separate holdings by currency counter, disclosing for each counter respective quantity, closing price, corresponding market value.
Jun. 2025 HKEX Supplementary Information
On Jun. 13, 2025, HKEX issued supplemental information on settlement arrangement enhancement for multi-counter eligible securities in the ETF primary market.
The single tranche multiple counters arrangement will be launching on Jun. 30, 2025.
All ETF primary market activities for multi-counter ETFs and multi-counter eligible securities in underlying basket will be displayed under domain settlement counter.
Domain settlement counter refers to stock code of trading counter in HKD, or for multi-counter ETF paired with RMB/USD only without HKD trading counter, RMB stock code.
Participating dealers (PDs) must input CCASS stock code of domain settlement counter in ETF in-kind creation/redemption and ETF book-entry deposit/withdrawal instructions to CCASS; those using stock code of non-domain settlement counter will be rejected.
PDs must use domain settlement counter for the forms as listed in the circular.
Current ETF creation and redemption process, submission channels, and instructions/ authorization forms remain unchanged; relevant information on HKEX web corner.
