Asian investors trading European bonds will be able to settle transactions in Hong Kong after the monetary authority agreed to link its debt-market clearing system with a European counterpart. The link, to go live by the end of next year, will connect the Hong Kong Monetary Authority's central money-markets unit (CMU) with Brussels-based Euroclear, a debt-clearing network serving investors in 32 markets. The move is part of the Government's efforts to develop Hong Kong as a regional debt-market centre. The link will enable Asian and Hong Kong investors to settle Euroclear-eligible debt securities via the CMU in Hong Kong, shortening settlement times and cutting risk because Asian investors will be able to settle deals within the same time zone. At present, traders must wait for the European market to open to settle through Euroclear. The HKMA said the new link would help to promote efficient and low-risk cross-border securities transactions, which in turn would attract more investors to trade in Hong Kong. HKMA chief executive Joseph Yam Chi-kwong said the proposed link would be a significant advance in the development of efficient and safe debt trading in the region, and would encourage more fund managers to manage global debt portfolios through the Hong Kong market. 'Investors and issuers in the bond markets increasingly require a global reach,' he said. 'And they have come to expect continual improvements in clearing and settlement arrangements so as to increase efficiency, reduce costs and contain risk.' Pierre Francotte, chief executive of Euroclear Bank, said: 'Asian investors will be able to settle Euroclear-eligible securities in their own time zones, while clients in non-Asian markets will be able to access an even broader range of trading counterparts.'