Settlement services - Hong Kong
Pre-matching service
The table below summarises CBL’s pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CBL’s pre-matching services, see Pre-matching services for external settlement instructions.
| Service offered | Method employed | Start (local time) |
| Debt securities | ||
Immediate Release Flag available | Automatic or electronic in CMU system | SD |
| Equities | ||
Immediate Release Flag available | Automatic via CCASS | SD-1 |
For transactions in CCASS-eligible equities and warrants, when the counterparty is a custodian bank (Clearstream Banking), its safekeeping account with the receiving or delivering agent (Citibank) must be quoted in the settlement instructions.
In addition, the CCASS pre-matching system requires that the account numbers of global custodian accounts at the receiving/delivering agent be correctly formatted (see Account formats for Global Custodians).
N.B.: Clients are strongly urged to comply with global custodian account formats. Clearstream Banking is not in a position to verify these formats and non-compliance will result in unmatched and consequently unsettled trades, which may lead to a buy-in. Any costs, expenses or damages arising from incorrect formatting by the client shall be borne by the client exclusively.
Domestic allegement matching service
Complementary to the pre-matching services offered as described above and where no pre-matching instruction has been sent to the market, CBL accepts allegements via its depository from domestic market counterparties. It will then use these allegement messages to search for the best matching client instruction.
If no matching client instruction is found, the allegement is reported to the client provided that its Clearstream Banking account number is present.
For details of CBL's domestic allegement service, see Pre-matching services for external settlement instructions.
Procedures for domestic counterparties
| Procedure for the domestic counterparty | Deadline | ||
Receipt in CBL / Delivery from CBL for CCASS, non–CCASS eligible equities and warrants | |||
Clients delivering/receiving securities to/from the Hong Kong market must request their domestic counterparty to receive/deliver the securities from/to CBL sub-account no. 8457910000 with Citibank as follows: | Market deadline | ||
Receiving/Delivering Agent: Citibank Hong Kong, BIC: CITIHKHXXXX, CCASSID: C00010. | |||
| Receiver’s/Deliverer’s custodian: CBL (BIC: CEDELULL), for/from account 8457910000a. | |||
Buyer/Seller: beneficiary's/ordering party's account number in CBL. | |||
| Receipt in CBL / Delivery from CBL for CMU instruments | |||
Clients delivering/receiving securities to/from the Hong Kong market must request their domestic counterparty to receive/deliver the securities from/to CMU member code CIHK008 Citibank for CBL as follows: | Market deadline | ||
Receiving/Delivering Agent: Citibank Hong Kong, BIC: CITIHKHXXXX, CIHK: CIHK008. | |||
Receiver’s/Deliverer’s custodian: CBL (BIC: CEDELULL), for/from account 8457910000. | |||
Buyer/Seller: beneficiary's/ordering party's account number in CBL. | |||
Allowed countervalue difference
CCASS-eligible instruments
A maximum difference in countervalue of USD 25 or currency equivalent is allowed for the matching and settlement of against payment transactions with domestic counterparties for all non–CMU-eligible instruments eligible in CBL’s link to the Hong Kong domestic market.
CMU instruments
A difference of less than HKD 1 only is allowed for the matching and settlement of against payment transactions with domestic counterparties for CMU instruments. In the case of a discrepancy, the CBL counterparty’s cash countervalue prevails.
Specific settlement rules/settlement restrictions
Against payment transactions with domestic counterparties in all eligible securities can be effected in HKD and CNY depending on the currency denomination of the securities.
Dual Counter Model HKD-RMB
For clients to participate in the Dual Counter Model, HKD and RMB counters must be issued with separate ISIN codes (that is, one ISIN for the HKD counter and a different ISIN for the RMB counter). Settlement instructions deadlines and instruction formats remain the same as per current setup for the existing Hong Kong equities.
RMB (CNY) counter securities will not be Bridge eligible, only internal and domestic instructions are allowed.
Clients will not be able to safekeep and settle securities with an RMB counter if both HKD and RMB are issued with a single (same) ISIN code. In the scenario whereby CBL has received a settlement instruction with a one ISIN issued with two counters, CBL will settle the HKD counter by default.
The Dual Counter conversion service will not be available until further notice.
RTGS instructions for CMU and CCASS instruments
Real-Time Gross Settlement (RTGS) instructions for CMU instruments are not required for domestic instruction because CMU settlement is real-time by default.
Note: A domestic instruction flagged with "NRTG" will be rejected by CMU.
RTGS instructions for CCASS instruments must be flagged to indicate that they are to be processed in the mandatory and/or optional settlement processing, as follows:
| Connectivity medium | Field to be used | Value |
| Xact via SWIFT and Xact File Transfer | Field :22F: Real Time Gross Settlement Override Indicator, sequence E | :RTGS//YRTGa |
| Xact Web Portal | Securities RTGS | Yes |
a. To settle in real time, the client must specify ‘YRTG’. If ‘YRTG’ is not specified, the instruction will automatically settle during the intra-day batches.
If the client specifies YRTG, which is a matching criteria in the instruction, the counterparty must also match otherwise the transaction will be unmatched and ultimately fails on SD.
If, on a domestic instruction, the client later wants to change the processing indicator, the original instruction must be cancelled and the client must re-instruct with the new processing indicator value. For internal and Bridge instructions, this value can be changed post-release without having to cancel and re-instruct.
Back-to-back processing
Back-to-back processing is available for transactions in all dematerialised Hong Kong equities eligible in this market. If both the client and the domestic counterparty meet their settlement obligations and fulfil the market's back-to-back requirements within the relevant deadlines, the linked receipt and the linked delivery will settle with same-day value. To benefit from this functionality, clients must ensure that their back-to-back instructions are formatted as follows, according to the connectivity medium used:
| Connectivity medium | Pool ID format | Field(s) to be used |
| Xact via SWIFT and Xact File Transfer | :POOL//16x a and :SETR//TURN | Field :20C: sequence A1 Field :22F: sequence E |
a. The reference (16x) must neither start nor end with a single slash "/’ nor must it contain two consecutive slashes "//".
Management of failed instructions
For all eligible securities, the depository will re-present all settlement instructions for transactions that do not settle on the first possible value date in the domestic market to the respective domestic counterparties on each of the three subsequent domestic business days. For transactions that remain unsettled, CBL will automatically cancel the client’s instruction on SD+3.
For unsettled deliveries, securities will be re-credited to clients’ accounts on SD+3.
Non–CCASS-eligible equities and warrants
Securities that are not CCASS-eligible must be settled physically, whether free of or against payment, and will be immediately re-registered in Citibank’s nominee name (Citi (Nominees) Ltd).
Transfer of physical securities
Successful transfer of physical registered securities can only take place if the beneficial owner (name as it appears on the certificate) completes a Standard Form of Transfer (also known as a “Transfer Deed”).
For a copy of the Standard Form of Transfer, clients should contact their CBL Relationship Officer or their local broker.
For the Standard Form of Transfer to be considered valid, it must bear:
- The transfer deed stamp; and
- Stamps, from the buying and selling broker, confirming payment of ad valorem stamp duty.
Securities transfers that do not meet this requirement will be rejected by Clearstream Banking’s depository.
When completing the Standard Form of Transfer, clients must provide the name of the transferee in the mandatory “Transferee(s) names in English” section:
- For transfers into or out of the CBL depository's vault: Citi (Nominees) Limited;
- For transfer into or out of CCASS:HKSCC Nominees Limited.
Clients should send a completed original of the Standard Form of Transfer with the physical securities to CBL's depository in Hong Kong (see General information).
CCASS registration process
Physical securities deposited with CCASS are credited immediately and can be registered within approximately ten business days. To avoid clients from facing the call-back of the credited securities if CCASS has rejected the certificate during the re-registration process, such positions will be blocked on client accounts until the registration is completed successfully.
Out-of-pocket expenses
Out-of-pocket expenses will be charged to the client. These include, but are not limited to:
- A registration fee of HKD 2.5 per board lot or per scrip, whichever is higher;
- Transfer stamp duty of HKD 5.0, payable per transfer by the first deliverer of the registered securities;
Out of pocket expenses are subject to change.
Note: As it is standard market practice for this duty to be included in the settlement countervalue, CBL clients do not need to specifically advise the stamp duty in their settlement instruction. Any stamp duty obligations applicable to FOP transactions must be clarified and processed with the relevant counterparty in a communication separate from the original instruction.
It is the client’s responsibility to ensure compliance with applicable stamp duty requirements in regard to their Hong Kong equities transactions settled in the CBL system. CBL shall not be responsible for ensuring such compliance.