The Hong Kong Monetary Authority (HKMA) and stock exchange are proposing to make the securities clearing system a member of the debt paper clearing agency to encourage trading of Exchange Fund notes.
'This will make the trading and settlement of Exchange Fund notes as easy as trading other listed stocks,' HKMA acting deputy chief executive Peter Pang Sing-tong said yesterday.
The Government is to list $33 billion worth of Exchange Fund notes in the third quarter of next year, in a bid to kick-start debt market development.
The stock exchange and HKMA will jointly issue a consultation paper next month to propose a new trading and settlement model for debt securities.
Mr Pang said it was proposed that the securities clearing system, the Central Clearing and Settlement System (CCASS), join the Central Moneymarkets Unit (CMU) operated by the HKMA.
Under the proposal, retail investors could buy listed Exchange Fund notes through the stock exchange's 500 stockbrokers, with debt papers settled by CCASS.
CCASS, a CMU member, would then settle with the debt-paper clearing agent.