The Hong Kong Monetary Authority has joined forces with Citibank to offer Asian investors same-day clearing and settlement of transactions in United States treasuries. HKMA deputy chief executive Tony Latter yesterday said the service would begin in the fourth quarter. The fee for clearing and settling transactions as well as providing custodian services had yet to be finalised. 'It will be done on a cost-recovery basis but I expect that it will be more effective and less costly than transacting through New York,' he said. Citibank country corporate officer T. C. Chan said same-day clearing and settling of US treasury trades by Asian investors through the HKMA's Central Moneymarkets Unit would promote greater transparency and reduce the element of currency risk attached to the present method of clearing trades through agents in New York. A bank custodian said clearing fees under the present arrangements for settling US treasury trades through New York agents typically ranged from US$10 to US$20 per transaction. 'A local same-day settlement service will benefit the market as a whole in terms of efficiency and overnight credit risk - but whether participants will switch to this new model, I have no comment,' he said.