The position of the international date line means that Hong Kong opens and closes every day before London and New York.

If a Hong Kong broker sends confirmation of a trade to London only very late at night it may happen that his client does not have that full day to process the trade but in New York they certainly have the full day of the transaction plus the extra two of T+2 to do the work.

Meanwhile, Taiwan operates efficiently on a T+1 settlement system.

It is true that occasionally some trouble can arise from T+2, and a good example of this was on Friday, August 28, when the Government's purchases drove turnover on the market to $79 billion just ahead of a holiday the following Monday in London. Some British investors found themselves strapped to settle on time because of this combination.

Equally, they knew there was a holiday, they knew that the Hong Kong Government was in a warlike mood on settlement and their brokers mostly warned them to have the stock available on time. They undoubtedly had their difficulties on that occasion but T+2 is not normally a big problem on straightforward trades when there is a holiday. Investors have adapted to it.

It is a big problem, however, on trades that are not straightforward, the kinds of trades that find such favour with the foreigners who have formed the new lobby.

Take arbitrage, for instance.

Prices for a stock that trades in both Hong Kong and London may vary significantly in these two centres. The tactic for a crafty trader who spots the difference is to sell the stock where the price is high and buy it where the price is low.

But if he does not own or has not borrowed the stock he is selling, he holds a naked short position and could be in trouble. His game is then to get quick settlement on the stock he has bought while pleading with the clearing system for a few days' grace on settlement of the stock he has sold.

Once he has settled his Buy trade he has the stock for delayed settlement of his Sell trade. He can then pocket the profit.

And now, with strict enforcement of T+2, he can't do it any longer. Shall we cry? Let us say he is not holding a naked short position but has borrowed the stock. Custodians can lend stock to someone who wants to take a short position on it if they have the permission of the beneficial owners. This is entirely legal.

But now let us say that the beneficial owner tells the custodian that he has sold the stock and instructs him to transfer it to the new owner. If all of the stock that the custodian holds has already been borrowed, the problem is solved under the old system by replacing it through purchases on the market, waiting until this trade is settled and then effecting delayed settlement on the sell order.

It won't work any longer. Custodians will have to be more careful than ever to lend only a portion of the stock they hold in case they have a sudden demand for it from the owners. It will certainly make it more difficult to short the market massively. Is this such a bad thing? The lobby's threat to settle offshore is hardly fearsome. Doing it involves setting up things called umbrella funds or trading in instruments called ADRs.

These all add transaction costs and are not suitable to large daily volumes of turnover. The clearing system is in Hong Kong.

So close the door on their whingeing, Mr Tsang. Real investors don't have much trouble with T+2.