Hong Kong Securities Clearing Company Limited (HKSCC), under the Hong Kong Exchanges and Clearing Limited (HKEX) umbrella, is spearheading a critical advancement in securities settlement mechanics. Announced in Circular PT/SCS/CCASS/026/2025, the upgrade introduces a streamlined single tranche settlement mechanism for Multi-Counter Eligible Securities within the Central Clearing and Settlement System (CCASS), effective June 30, 2025.

The Core of the Enhancement: Single Tranche Multiple Counters Arrangement

Multi-Counter Eligible Securities—those tradable across different currency counters, namely Hong Kong Dollar (HKD), Renminbi (RMB), and US Dollar (USD)—pose unique settlement challenges due to the multiplicity of currency legs and settlement paths. The current system, which processes settlements on a per-counter basis, often involves fragmented obligations, increasing operational overhead and reconciliation complexity.

The new single tranche multiple counters arrangement fundamentally reengineers this process by consolidating settlement instructions for the same security, regardless of currency counter, into one unified tranche. This means that instead of settling obligations separately for HKD, RMB, and USD counters, all settlement obligations are aggregated into a single settlement event. Such consolidation enhances netting efficiency and reduces settlement fragmentation.

Technical Architecture and Operational Flow

This reconfiguration relies on CCASS's enhanced capacity to map multiple currency-denominated positions for a given security into an integrated settlement tranche. The settlement instructions submitted by Clearing Participants (CPs) are aggregated centrally, enabling more effective cross-currency netting.

Key operational modifications include:

Settlement Instruction Aggregation: CPs submit currency-specific instructions which the system aggregates, generating a netted obligation that accounts for inter-counter offsets.

Liquidity Management Nuances: Although obligations are netted, CPs must maintain adequate liquidity across all relevant currencies as settlement ultimately occurs in the respective currency accounts.

Post-Trade Risk Controls: Enhanced real-time monitoring ensures that participants'multi-currency positions do not exceed predefined exposure thresholds, maintaining systemic stability.

Verification and Testing Phase

To facilitate a seamless transition, a post-release verification is scheduled on June 28, 2025. During this window, Clearing Participants can simulate settlement scenarios under the new tranche framework, allowing operational teams to validate system compatibility and confirm readiness ahead of full deployment.

Comprehensive documentation, including FAQs and migration samples, is provided by HKSCC to guide market participants through the technical nuances and procedural changes.

Regulatory and Market Infrastructure Context

This initiative reflects HKEX's strategic commitment to align Hong Kong's clearing infrastructure with international best practices in cross-currency settlement and post-trade efficiency. It also complements broader regional trends promoting RMB internationalization and multi-currency trading facilitation.

The aggregation of settlement obligations into a single tranche offers not only operational simplification but also fosters a more transparent and auditable settlement trail — critical for compliance and risk management in today's complex regulatory environment.

Data and Metrics to Consider

Historical data from CCASS reveals that multi-counter eligible securities account for a significant portion of trading volume, with RMB-denominated trades growing steadily amid increased international adoption. By consolidating settlements, the expected reduction in settlement instruction volumes could exceed 20%, translating into lower operational risk and faster reconciliation cycles.

Final Thoughts

While the complexity of multi-currency securities settlement has long posed challenges, HKSCC's latest enhancement ushers in a new era of post-trade efficiency and technological sophistication. The single tranche approach streamlines the clearing ecosystem, harnessing advanced aggregation and netting algorithms to simplify what was once a fragmented settlement landscape.

Market operators, infrastructure providers, and clearing participants alike stand to benefit from the clarity, precision, and robustness this upgrade delivers — marking another milestone in Hong Kong's evolution as a premier international financial hub.

For full technical details, please refer to the official circular at:
HKSCC Circular PT/SCS/CCASS/026/2025.