State Street's Responses to HKEX T+1 Discussion Paper

This document is a response from State Street regarding the HKEX T+1 discussion paper, focusing on the implications of adopting a T+1 settlement cycle in Hong Kong. It outlines the potential benefits of this transition, including enhanced market competitiveness, efficiency, and reduced risks associated with counterparty, market, and liquidity. The document emphasizes the importance of aligning Hong Kong's settlement cycle with other major markets that have already adopted T+1 or plan to do so by 2027. It also discusses the operational challenges that may arise during the transition, such as increased settlement fails and funding frictions for cross-border investors. Furthermore, it highlights the need for careful planning and industry collaboration to ensure a smooth transition. The document concludes by summarizing key learnings from the T+1 implementation in the US, emphasizing the role of industry-wide collaboration, client engagement, and technological investment in achieving successful outcomes.