The stand-off between the Government and Hongkong Clearing about changes to its settlement rules was resolved yesterday after the clearing house voted to make amendments in accordance with Government wishes.
Hongkong Clearing's board of directors approved the strict implementation of the T+2 settlement rule and the immediate buy-in on the morning of T+3, eradicating the previous practice of offering a day's grace.
In addition, the clearing house will now impose penalties on brokers who fail to abide by the rules, and it could suspend the trading of repeat offenders.
The decision follows a harsh exchange of views between Hongkong Clearing chairman John Chan Cho-chak and Hong Kong Monetary Authority chief executive Joseph Yam Chi-kwong.
Mr Yam criticised the clearing house for failing to implement strictly the T+2 deadline on Tuesday last week. He said this failure reduced speculators' losses and was against Government wishes.
Mr Chan responded by saying political decisions were the Government's concern. He argued that Hongkong Clearing was responsible solely for the efficient settlement of trades.
