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News in 2010
Browser-based RTGS front-end applications on SWIFTNet and Internet
The front-end terminal applications of the RTGS systems were successfully migrated from the text-based MBT/400 and CMT/400 to browser-based applications on 12 July 2010. After the migration, eMBT via SWIFTNet is the front-end terminal application of CHATS of all clearing currencies, while eCMT via SWIFTNet and iCMT via the Internet are the front-end terminal applications of the HKMA's CMU. The new eMBT, eCMT and iCMT are user friendly applications that improve the users・ operations in addition to the enhanced system functionalities.
Payment-versus-Payment Settlement for US Dollar ("USD") and Indonesian Rupiah ("IDR")
A new payment system linkage between the USD CHATS and the BI-RTGS System (Bank Indonesia's RTGS system) for payment-versus-payment settlement of USD/IDR foreign exchange transactions was launched on 25 January 2010. This new payment systems linkage facilitates payment-versus-payment ("PvP") settlement of USD/IDR foreign exchange transactions as a measure to eliminate settlement risk for the banking institutions in Hong Kong and Indonesia.
News in 2009
The establishment of cross-border links with the clearing and settlement systems of other Asian countries will help developing Hong Kong into a payment and settlement hub for the region. Following the successful linkage of USD CHATS with RENTAS (a real time electronic transfer of funds and securities system) in Malaysia to facilitate the real time payment versus payment transactions of USD/Malaysian Ringgit, and the settlement in Hong Kong of the cash leg of the real time delivery versus payment transactions of USD bonds traded in Malaysia, a cross border link for fund transfers between Hong Kong・s RTGS systems and the Mainland・s foreign currency RTGS systems was launched on 16 March 2009. This cross border link facilitates 2-way real-time USD, HKD and Euro funds transfers between banks in Hong Kong and banks participating in the RTGS systems of the respective currencies in the Mainland. A list of the banks in Mainland that participate in the cross border link can be found on HKICL website.
Effective 25 May 2009, the RTGS systems of all clearing currencies are able to support payment transactions transmitted in SWIFT message format.
News in 2008
Effective 23 June 2008, in addition to HKD cheques, USD cheques drawn on banks in Macau and presented by banks in Hong Kong can be settled on the following working day.
The RTGS operating hours were extended by one hour from 17:30 hours to 18:30 hours, Mondays to Fridays except General Holidays, effective 3 November 2008 in order to allow banks in Hong Kong that have business with the Mainland and western Asian countries more time to process their remittance payments which in turn could enhance their services and help developing Hong Kong as a regional payment HUB to serve the neighbour countries in the region.
A new clearing service to enhance the refund process of the electronic initial public offering (：eIPO；) of the Central Clearing and Settlement System (：CCASS；) was launched on 15 December 2008. Under this new service, the inter-bank settlement of the eIPO refund monies is performed on the refund day so that the CCASS participants can receive the refund monies in good funds on the same day instead of previously on the working day following the refund day. .
News in 2007
The Regional CHATS Payment Services was launched in July 2007 which linked all participants of the existing HKD, USD and Euro RTGS systems in Hong Kong in order to build an extensive correspondent network to facilitate the cross-border payments through the RTGS systems in Hong Kong during Asian business hours.
To support the clearing and settlement of the RMB-denominated transactions in Hong Kong, a full-fledged Renminbi RTGS system, and the RMB local cheque clearing were introduced on 18 June 2007.
The one-way clearing for HKD cheques drawn on banks in Hong Kong and presented by banks in Macau was introduced in August 2007 to reduce the time taken for Macau residents to receive funds.
The linkage between Hong Kong・s USD RTGS Systems and Malaysia・s Rentas Scriptless Securities Trading System for delivery-versus-payment settlement of USD bonds in Malaysia was introduced on 12 November 2007. This linkage eliminates settlement risk of USD bonus issued and traded in Malaysia by ensuring simultaneous delivery of US dollars in Hong Kong and USD bonds in Malaysia.
The opening of the RTGS settlement window was advanced by 30 minutes from 09:00 hours to 08:30 hours with effect from 3 December 2007 in order to allow banks more time for the settlement of CCASS related payments given the booming stock market, which in turn helps banks to better manage their liquidity for the settlement of CCASS items.
News in 2006
Payment versus Payment (PvP) Settlement for USD and Malaysian Ringgit (MYR)
The Hong Kong Monetary Authority and Bank Negara Malaysia (BNM), the Central Bank of Malaysia has agreed to establish a link between the Ringgit real-time gross settlement system in Malaysia (the RENTAS system) and the USD real-time gross settlement system in Hong Kong (USD RTGS system). This payment link enables the reduction of foreign exchange settlement risk through the implementation of a PvP mechanism during the Malaysia and Hong Kong business hours, and helps to increase the efficiency and safety of payment systems in Malaysia and in the region, in particular to manage FX settlement risk exposure for the FX transactions involving the US dollar and MYR.
This new system was launched on 13 November 2006.
Renminbi Settlement System
HKICL has been engaged by Bank of China (Hong Kong) Limited, the Clearing Bank ("CB") for RMB business in Hong Kong, to develop a Renminbi Settlement System ("RSS") that provides participants of this system with RMB cheque clearing service, and real-time RMB payment services including RMB position-squaring, remittance processing, and RMB bank card payment.
Licensed banks in Hong Kong, as well as their credit card subsidiaries can join the RSS with the permission from the CB and the HKMA, and each participant has to maintain a settlement account with the CB. The RSS is launched on 6 March 2006.
News in 2004
Continuous Linked Settlement (CLS) System
The Hong Kong dollar has been included in the CLS System with effect from 6 December 2004. The CLS System is a global clearing and settlement system for cross-border foreign exchange transactions operations by CLS Bank International. The inclusion of the Hong Kong dollar into the CLS System enables foreign exchange transactions involving the Hong Kong dollar to be settled through the CLS System on a payment-versus-payment basis.
The existing CLS eligible currencies are: US dollar, Euro, Yen, Sterling, Swiss Franc, Canadian dollar, Australian dollar, Swedish Krona, Danish Krone, Norwegian Krone, and Singapore dollar. HK dollar joins three other currencies i.e. New Zealand dollar, Korea Won and South African Rand, to become one of the CLS currencies that can be settled through CLS Bank International.
Hong Kong/Shenzhen Joint Clearing for USD Cheque
HKMA and People's Bank of China Shenzhen Central Sub-branch have agreed to extend the cross-border cheque clearing between Hong Kong and Shenzhen to USD cheques modelling on the existing HKD counterpart to improve the efficiency of clearing and settlement of USD cheques drawn on banks in Hong Kong and presented to banks in Shenzhen, and vice versa. Bank of China (Hong Kong) Limited has been appointed to act as the agent bank in Hong Kong for this new service that has been launched on 23 July 2004.
CHATS Optimizer for HKD Paper Cheque Settlement
To optimize the liquidity of banks during initial public offer (IPO) activities, a new payment type has been introduced to HKD CHATS for payment transfers that are netted and settled at the next scheduled HKD paper cheque settlement run. Such payments facilitate the recycling of liquidity from the receiving bank in an IPO to other banks. This new function was available on 14 June 2004.
HKICL Services Limited
Our Board of Directors has approved the incorporation of a wholly owned subsidiary, HKICL Services Limited ("HSL"), to take on new businesses which are not directly related to interbank clearing and settlement services. HSL was incorporated on 30 April 2004 and its business commenced on 31 May 2004. HSL's Board of Directors, Board Sub-Committee and management team are the same as those of HKICL. HSL is situated at HKICL's premises.
HKD and USD RTGS Link between Guangdong and Hong Kong
Similar to the RTGS linkages with Shenzhen, new HKD and USD RTGS linkages are established between Hong Kong and Guangdong (except Shenzhen) to facilitate the two-way real-time HKD and USD funds transfers between banks in Hong Kong and the HKD RTGS and USD RTGS participating banks in Guangdong.
BOCHK, the same agent bank appointed by the People's Bank of China Guangzhou Branch, settles HKD and USD payment transfers sent to and received from Guangzhou Electronic Banking Settlement Centre via BOCHK's HKD settlement account maintained with HKMA and BOCHK's USD settlement account with HSBC respectively.
This service was successfully launched on 15 March 2004.
News in 2003
Linkage between the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority (HKMA) and Euroclear
The direct link between HKMA's CMU and Euroclear, the Brussels-based international central securities depository, has been in production since 25 November 2002. This fully automated real-time link enables CMU participants to directly trade and settle their debt securities deposited in Euroclear, and settle the payments via RTGS system. This new connection significantly improves the ability of Asian investors to access international securities and counterparties in a secure and delivery-versus-payment (DvP) environment. In addition, the new link helps to promote efficient, cost-effective and low-risk cross-border securities transactions. This in turn will attract more investment activities to Hong Kong and enable Asian investors to better manage their liquidity.
Linkage between HKD and USD RTGS in Hong Kong and HKD and USD RTGS in Shenzhen
The linkage between HKD RTGS in Hong Kong and HKD RTGS in Shenzhen has been in production since 12 December 2002, which facilitates two-way real-time HKD funds transfers between banks in Hong Kong and the HKD RTGS participating banks in Shenzhen.
A USD RTGS linkage has also been put in place on 17 November 2003 to facilitate two-way real-time USD funds transfers between banks in Hong Kong and the USD RTGS participating banks in Shenzhen.
Bank of China (Hong Kong) Limited (BOCHK) has been appointed by the People's Bank of China Shenzhen Central Sub-branch to act as its agent bank to settle the HKD and USD payment transfers sent to or received from Shenzhen Financial Electronics Settlement Centre via BOCHK's HKD settlement account with HKMA and BOCHK's USD settlement account with HSBC, the USD clearing settlement institution in Hong Kong, respectively.
Euro Clearing in Hong Kong
With the Euro being one of the leading international currencies, the trading of Euro denominated assets is becoming increasingly prevalent in Hong Kong and the rest of the Asia Pacific Region. An efficient and reliable Euro clearing system is an important addition to Hong Kong's financial infrastructure.
On 3 July 2002, HKMA appointed Standard Chartered Bank as the Settlement Institution for the Euro clearing system in Hong Kong. In turn, Standard Chartered Bank appointed HKICL, the current operator of the Hong Kong dollar and US dollar clearing systems, as its clearing agent in September 2002.
The purpose of this Euro clearing system is to facilitate the efficient settlement of Euro transactions on a real-time basis within the Hong Kong time zone. The key functions of the Euro clearing system include an interbank Real Time Gross Settlement (RTGS) system, Payment versus Payment (PvP) settlement for Euro/US dollar and Euro/Hong Kong dollar foreign exchange transactions, and DvP settlement for Euro denominated debt securities through a linkage with HKMA's CMU.
The Euro clearing system was successfully launched on 28 April 2003.
Cheque Imaging and Truncation System
With the support of HKMA, the Hong Kong Association of Banks (HKAB) had commissioned HKICL, which operates the clearing house for cheques and other means of payments between banks, to implement the Cheque Imaging and Truncation System (CITS) on an industry-wide basis. HKICL had been working together with banks in Hong Kong to implement this new system for cheque processing, and the CITS was successfully launched on 21 June 2003.
With the CITS, the new image-based cheque clearing method has transformed the current clearing process driven by physical exchange of cheques. Under the CITS, low-value cheques are exchanged and cleared on the basis of electronic presentation of cheque images and the relevant cheque data. This mitigates the need for banks to deliver physical low-value cheques for clearing and settlement. The higher value cheques and special items (such as suspicious cheques) regardless of value are still physically presented together with their images to the paying banks.
In order to obviate the need for banks to make physical presentment of cheques for clearing, the Bills of Exchange Ordinance was amended to allow banks to present the electronic image of the cheques for payment. To this effect, the Bills of Exchange (Amendment) Ordinance 2003 was gazetted and enacted on 28 March 2003.
After the implementation of CITS, customers continue to enjoy the same level of service. There is no change to the practice pertaining to the writing of cheques, the deposit of cheques by payees, the timing of the availability of funds and the returning of unpaid cheques to payees.
Updated on 19 July 2010
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