Stock and money positions of all Exchange Trades and Clearing Agency Transactions are required to be settled on T+2 day whereas stock positions of China Connect Securities Trades are settled on T day. SI transactions are settled on the settlement day stipulated by both Participants. Securities settlement is effected either by scheduled daily batch settlement runs or immediate on-line transfer by the input of Delivery Instructions (DIs). Provided that there are sufficient stocks in the stock account of the delivering Participants, settlement of ISIs will be immediately effected on the settlement day specified by the brokers or custodians which are CCASS Participants once the Investor Participants make the affirmation. Otherwise, the ISI transactions will be settled by multiple batch settlement-runs or the input of DIs.
Both methods enable CCASS to effect electronic book-entries to Participants' stock accounts. During each batch settlement run, delivering Participants' stock accounts are debited and the stock accounts of receiving Participants' are credited; delivering Participants may choose, or be requested by counterparties, to settle a position or transaction on-line by initiating DIs. Each DI takes immediate effect upon input, if there is sufficient stock balance available in the delivering Participant's stock clearing account.
On-line enquiries on settled or unsettled positions are available to Participants (other than Investor Participants) through CCASS terminals and to Investor Participants via CCASS phone system or the internet to help them monitor their settlement activities.
HKSCC provides money settlement services for all transactions settled on a Delivery Versus Payment (DVP) basis, where payment will follow delivery of securities in CCASS. Trades settled under the CNS system are always on a DVP basis. For Isolated Trades, SI and ISI transactions, participants can choose to settle them on a DVP or Free of Payment (FOP) basis. For transactions settled on a FOP basis, participants make their money settlement outside CCASS without involving HKSCC. Participants can also elect to settle SI and ISI transactions on a Realtime Delivery Versus Payment (RDP) basis. Under the RDP system, shares are delivered to the stock account of paying Participant upon receipt of payment confirmation from Hong Kong Interbank Clearing Limited (HKICL).
Each Participant establishes an account per settlement currency at a Designated Bank and authorises HKSCC to initiate electronic instructions to debit or credit its Designated Bank account(s). Book-entry money records are generated for a Participant in its money ledger with respect to its settlement and other financial obligations due to or from HKSCC. Settlement is processed through the Clearing House Automated Transfer Systems (CHATS) of HKICL against Participants' Designated Bank accounts.
Participants (other than Investor Participants) may enquire about their money obligations for settled or unsettled positions through their CCASS terminals throughout the settlement day. Investor Participants can make enquiry of such information via CCASS phone system or the internet.
The money positions arising from Exchange Trades and Clearing Agency Transactions settled under the CNS system in each stock position are netted, resulting in a single net amount due to or from the participant. This is settled by direct debit or credit instruction issued by HKSCC to the Designated Bank of the Participant no later than day-end of the settlement day. The CNS money positions for China Connect Securities Trades in each China Connect Markets are netted into a single net amount due to or from the Participant in which HKSCC issues chats payment instructions to Participants’ Designated Banks on T+1 day morning where payments to HKSCC are required to be settled by noon on the same day.
HKSCC acts as a facilitator for Isolated Trades, SI and ISI transactions settled on a DVP and RDP basis, and issues electronic payment instructions to the Designated Banks of the participants concerned to effect money settlement.