In response to some press reports today on the stock settlement arrangement of Tricom Holdings Ltd. (Tricom), Hongkong Clearing would like to clarify the following:

For the consolidation of Tricom, its Temporary Shares and New Shares can be converted or interchanged during the parallel trading period. This arrangement has been in place since the launch of CCASS in 1992 and is not a special or new arrangement.

Under the parallel trading arrangement, Temporary Shares and New Shares are in fact the same stock issued by a listed company. With the electronic settlement system, they can be interchanged at stated times (determined by reference to the Stock Exchange's parallel trading arrangements), providing greater flexibility to the settlement of securities transactions. 

The arrangement and procedures of parallel trading is stipulated in the CCASS Operational Procedures and CCASS Participants are familiar with the arrangement. A broker who wishes to settle its trades in Temporary Shares using the New Shares has to apply to Hongkong Clearing by completing and returning a 'Conversion Voucher' to Hongkong Clearing. Upon successful application, the actual holdings of the New Shares of the broker will be converted into Temporary Shares and can be used for settlement purpose.