Hong Kong’s gold main cleaning and settlement system begins trial operation today supported by complete bundle of targeted efforts (with pictures)
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The Financial Services and the Treasury Bureau (FSTB) revealed today (July 7) the beginning of the trial operation of Hong Kong’s brand-new main cleaning and settlement system for gold, together with a suite of targeted efforts intending to develop a contemporary and full-chain gold trading environment. These efforts consist of presenting the preliminary stage of Delivery Connect with the Shanghai Gold Exchange, releasing a brand-new HAU rate ticker, broadening storage capability and refining ability, diversifying gold financial investment items, checking out tax rewards, co-ordinating insurance coverage plans, improving versatility of Mandatory Provident Fund (MPF) financial investments in gold exchange-traded funds (ETFs), and developing an industry-led trade association. These procedures will jointly strengthen Hong Kong’s function as a relied on worldwide gold trading, cleaning, and reserve center.
The Financial Secretary, Mr Paul Chan, stated, “The National 15th Five-Year Plan incorporates explicit support for Hong Kong in establishing a commodity trading ecosystem. The commencement of the trial operation of the gold central clearing and settlement system today marks a significant step forward in developing Hong Kong’s gold trading infrastructure. Along with a series of measures to promote physical delivery, develop investment and derivative products as well as risk management tools, provide tax concessions, and deepen connectivity with the Mainland gold market, we are committed to building a thriving gold trading ecosystem. This will further enhance the richness, depth, and breadth of our financial markets, create new investment opportunities for local and overseas investors, and inject new momentum into the development of the financial sector.”
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, stated, “The commencement of the trial operation of our central gold clearing and settlement system is fully supported by a holistic package of support measures. Our vision is to build a scalable and integrated platform with trusted capabilities in clearing, connectivity, price discovery, risk management, storage, and insurance for global participants. The diversified strategic initiatives demonstrate the Government’s commitment to building a comprehensive and internationally competitive gold ecosystem, thus consolidating and enhancing Hong Kong’s status as a leading gold centre in Asia and beyond.”
Trial operation of gold main cleaning and settlement system begins today with deals finished
The trial operation of Hong Kong’s brand-new main cleaning and settlement system for gold begins today, with trading, cleaning, and settlement procedures currently in service. Running under the governance of the Hong Kong Precious Metals Central Clearing Company Limited (HKPMCC), a completely government-owned entity, the system supplies effective and trustworthy cleaning and settlement services for bilateral and non-prescription (OTC) gold deals.
Secret functions of the system consist of:
- Operation is governed by an extensive Clearing Rulebook, which plainly specifies the rights, commitments, guidelines, and treatments for all taking part banks and designated vault(s).
- A main journal is developed to tape-record settlement activities, gold transfers, and balances of taking part banks, and user interfaces effortlessly with designated vault(s) to assist in and tape-record physical gold deposits and withdrawals.
- Gold balances in the system are held and picked an unallocated basis, with commingled holding allowing effective settlement for gold of global requirements amongst individuals. Qualified gold for settlement consists of roughly 400 great troy ounce bars satisfying worldwide requirements.
The Board of Directors of the HKPMCC makes up the Government, the Shanghai Gold Exchange, regulators, and 11 banks to totally include market feedback. Bank of China (Hong Kong) Limited has actually been designated as the settlement organization and designated vault of the system, running under the oversight of the HKPMCC.
In tandem with the beginning of the trial operation, the very first batch of gold has actually been effectively transferred into the designated vault, and the very first batch of trading and settlement activities has actually likewise been finished. The trial operation has actually gotten strong assistance from crucial market individuals, consisting of banks and banks, mining business, refiners, jewellers, and institutional individuals. A list of essential individuals in the trial operation is set out in the Annex.
The HKPMCC will continue to carefully keep an eye on the trial operation of the system, and aim to determine locations for improvement to offer more assistance to market individuals before the main commissioning of the system. The system will likewise develop connection with the Real Time Gross Settlement system to allow Delivery versus Payment settlement, flawlessly connecting gold trading and physical shipment with Hong Kong’s first-rate money cleaning and settlement abilities, in addition to minimizing settlement threat and enhancing total functional performance.
Co-ordinated efforts are likewise in location together with the beginning of the trial operation of the main gold cleaning and settlement system to show the Government’s detailed and figured out efforts in constructing a modern-day, interconnected, and globally competitive gold trading environment. These procedures consist of:
(1) Initial stage of Delivery Connect released with Shanghai Gold Exchange
On the basis of the co-operation contract checked in January this year, the FSTB and the Shanghai Gold Exchange introduced the preliminary stage of Delivery Connect today. Under this effort, the HKPMCC has actually used to end up being a global member of the Shanghai Gold Exchange and opened a physical gold account. Market individuals can select to transfer their physical gold holdings into the designated vault of the Shanghai Gold Exchange International Board in Hong Kong through this account.
Through two-way transfer, market individuals can take part in both the on-exchange market of the Shanghai Gold Exchange and the OTC market of Hong Kong. This will assist in the circulation of physical gold in between the HKPMCC system and the Shanghai Gold Exchange system, successfully linking the gold markets of Hong Kong and Shanghai, and attaining shared advantage and win-win results.
The intro of Delivery Connect is invited by the market. Industrial and Commercial Bank of China (Asia) Limited, The Hongkong and Shanghai Banking Corporation Limited, and Bank of China (Hong Kong) Limited have actually taken part in the preliminary stage of Delivery Connect as the very first batch of individuals. Two-way transfers by these banks have actually effectively been finished today.
(2) New HAU cost ticker released
A brand-new HAU rate ticker was released today to supply a Hong Kong-specific recommendation rate. Established in collaboration with Bloomberg, this ticker shows the a sign bid/offer rates contributed by market individuals in the gold trading market, therefore supplying higher benefit and recommendation worth for worldwide banks, hedge funds, refiners, corporates, and sovereign organizations in regards to cost discovery, liquidity, and general trading involvement, especially for those active throughout Asian trading hours. The ticker is now available on Bloomberg and London Stock Exchange Group platforms for market referral.
(3) Expansion of storage capability and refining ability
As revealed in the 2025 Policy Address, the Government is supporting the Airport Authority Hong Kong (AAHK) and banks in developing first-rate gold storage centers, with a target to broaden Hong Kong’s overall storage capability to over 2 000 tonnes within 3 years, placing the city as a relied on international vault of option. The AAHK has actually currently released a job to establish rising centers on a thousand-tonne scale to fulfill regional storage and shipment needs. The Government invites market interest, and will continue to motivate and bring in more organizations to check out broadening their storage capability in Hong Kong.
The Government is likewise going over with the market the growth of the refining ability of rare-earth elements in Hong Kong. A number of business that are certified to improve gold to global requirements have actually currently revealed interest in broadening into the Hong Kong market. The Government will continue to work carefully with interested business to assist them use the huge chances in the city.
(4) Diversifying gold financial investment items
Given that January this year, the range of gold financial investment items in the Hong Kong market has actually continued to increase. The listing of 3 extra gold ETFs has actually brought the overall variety of such ETFs to 6. To even more improve liquidity and supply advanced hedging, the Hong Kong Exchanges and Clearing Limited (HKEX) has actually revitalised its USD gold futures agreement, and introduced trading charge waivers and reward programs to increase total market liquidity and draw in more comprehensive market involvement. Simultaneously, the HKEX is checking out the advancement of a new RMB gold futures agreement with shipment assistance from the Shanghai Gold Exchange, making sure Hong Kong’s broadening physical market is totally supported by robust, first-rate risk-management tools.
(5) Exploring tax rewards
The Government has actually presented a modification costs into the Legislative Council to improve the preferential tax routines for funds and single household workplaces, consisting of broadening the scope of certifying financial investments to cover rare-earth elements, which is anticipated to promote financial investment activities connected to rare-earth elements. The Government is checking out using tax rewards for qualified organizations carrying out gold trading and settlement in Hong Kong.
(6) Co-ordinating insurance coverage plans
The Insurance Authority has actually been co-ordinating with global, Mainland, and regional insurer thinking about offering specie insurance coverage for high-value rare-earth elements. It will likewise introduce a devoted specie insurance coverage hotline within July 2026 to support market individuals in getting in touch with appropriate insurance companies.
(7) Enhancing versatility of MPF financial investments in gold ETF
The Mandatory Provident Fund Schemes Authority will optimise its approval system for gold ETFs to help with Mandatory Provident Fund financial investments into this property class. The Government will send the appropriate change costs to the Legislative Council in the 4th quarter of this year to boost MPF fund financial investment policies, which will consist of relaxation of limitations on MPF fund structure.
(8) Establishing an industry-led trade association
The Government remains in the procedure of helping the market to develop an industry-led trade association with a view to combining resources, strengthening worldwide promo efforts, and promoting closer ties with international stakeholders.
By reinforcing facilities, improving connection, and offering targeted supporting steps throughout the market chain, Hong Kong is well placed to turn into a leading worldwide gold trading, cleaning, and reserve center.