Hong Kong companies should start upgrading their internal systems and talking with suppliers and customers to ensure they are fully capable of conducting trade in euros, HSBC said. The banking group's London representative, Chris Doyle, said better preparation would enable companies to take fuller advantage of the new economic environment. Addressing a seminar organised by the Hong Kong General Chamber of Commerce yesterday, Mr Doyle said companies might suffer conversion losses as they performed transactions involving old national currencies due to the euro's unique 'triangulation' conversion rule. This rule states that conversions between national currencies of the 11 euro nations must take place using the euro fixed exchange rate. For example, when deutschemarks are converted to French francs, they need to be first converted into euros. Direct conversion between two national currencies is not allowed. Conversions to and from the euro will result in rounding differences which can cause problems in payment systems, bond and share price re-denomination and conversion of small amounts. Companies will also need to adjust to cope with the euro reporting format.