EUROPEAN clearing-house Cedel expects to boost United States and European involvement in Hong Kong equities, warrants and debt securities after changing its system on Monday to allow participants greater security. Cedel's Southeast Asian regional manager Philippe Metoudi confirmed that Cedel would accept listed equities, warrants and debt securities on an against-payment settlement basis. Previously, Cedel, an international clearing-house for securities, worked on a free-of-payment (FOP) basis. Offering the option of the against-payment system - whereby sellers receive payment at the same moment buyers receive their purchases - should encourage US and European involvement in Asia, Mr Metoudi said. The free-of-payment system worked on the basis of 'you give me something and I tell you your cheque's in the mail', Mr Metoudi said. The change would allow participants in a transaction to avoid credit exposure to their counterparties, he said. Many institutions refused to do business on a free-of-payment basis and the Baring Brothers collapse had increased sensitivity, Mr Metoudi said. 'The feedback we have got from our customers is very good. Many people will be using this link.' From Monday, customers could settle transaction in Hong Kong equities and warrants and receive and deliver debt securities in the Central Moneymarkets Unit (CMU), on either against-payment or FOP basis, Mr Metoudi said. Cedel linked up with the CMU, the central depository for Hong Kong-dollar debt securities, last December. Customers could conduct securities transactions with counterparties in Cedel and Euroclear, on an against-payment or FOP basis, he said. They could also re-deliver to Cedel counterparties' equities, warrants and debt securities received from domestic counterparties with same-day value, he said. In another change, Barclays Bank would take over from the Hong Kong branch of Bankers Trust as Cedel's Hong Kong depository bank for CMU securities, Mr Metoudi said. However, Bankers Trust would continue to act as Cedel's local depository for Eurobonds and other non-Hong Kong debt and money-market instruments that were ineligible for the CMU, he said. Cedel is the second biggest clearing-house in the world, trading in more than 64,000 securities in 25 currencies, and providing access to 20 domestic markets. Euroclear is the world's largest clearance and settlement system for internationally traded debt and equity securities, serving more than 2,700 financial institutions active in international securities markets.