Market Link Guide – Hong Kong
Key features
CSD link as defined under CSDRa | Yes |
Type of link | Indirect via Citibank N.A. (Hong Kong Branch) to:
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a. CSD Regulation (EU) No 909/2014, Article 2(29).
CSD | Custodian | |
Name | Hong Kong Securities Clearing Company Ltd (HKSCC) Hong Kong Monetary Authority (HKMA) | Citibank, N.A. Hong Kong branch |
FATCA GIIN | HKSCC: 7ENI1T.00000.LE.344 HKMA: Not available | NXUTG8.00175.ME.344 |
LEI | HKSCC: 213800NM8ZN1F16ARD34 HKMA: Not available | E57ODZWZ7FF32TWEFA76 |
Country of incorporation | Hong Kong | USA |
Account type | Omnibus account | Omnibus account |
Legal account name/account holder | Account holder: Citibank NA Hong-Kong HKSCC: Securities are registered in the name of HKSCC Nominees Limited, the common nominee HKMA: Securities are in name of the CMU member (that is, Citibank N.A. Hong Kong branch) Citibank NA Hong Kong branch as the participant in HKSCC and HKMA holds a segregated account for CBL at either CSD. | Clearstream Banking S.A. |
Operational arrangements
| Yes/No | Remarks | |
| Settlement free of payment | Yes | |
| Settlement against payment | Yes | Eligible settlement currencies:
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| Settlement against payment in central bank money account of CBL/CBL client | No | CBL holds a cash account at the custodian. Against payment settlement in HKD and RMB is conducted in the HKMA payment system on the cash account of Citibank Hong Kong’s acting as the clearing party. |
| Bridge settlement | Yes | |
| Shaping facility | No | |
| Partial settlement | No | Not market practice but is permissible with special arrangements. |
| Settlement penalty fees | Yes | Failure of stock delivery might potentially incur buy-in penalties. |
| Pre-matching | Yes | Occurs upon receipt of clients’ instructions and is subject to counterparty availability. |
| Back-to-back processing | Yes | CCASS-eligible securities only. |
| Allegements | Yes | |
| Automatic compensation | No | Adjustment is performed based on information received from the depository. |
| Registered securities | Yes |
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| Multi-market securities | Yes | Please refer to the Multi-Securities Guide. |
| Lending and borrowing | Yes | For all CMU instruments eligible in CBL. |
| Proxy voting | Yes | |
| Investment funds | Yes | CCASS-eligible funds and ETFs. |
| Liquidity Hub Connect | No | |
| Sale and purchase of rights | No | |
| Repo services | Yes | Internal Repo service for Bonds and Equities (refer to CmaX Product Guide). |
| Market restrictions | No | |
| FTT | Yes | Stamp duty incurred. |
| Daily reconciliation | Yes |
| Moment of entry of instructions | The CSD rules do not define the moment of entry within the meaning of the Settlement Finality Directive. |
| Irrevocability of instructions | Settled transactions are irrevocable. |
| Finality of instructions | Settlement in the Hong Kong market is final upon settlement in the books of HKSCC and HKMA. |
Local legislation
The below section is valid on the date of the legal opinions that were issued and might be subject to change. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter. The scope of the legal opinions is limited to the local legislation applicable to the relevant CSD (and intermediary, if any). For links using an intermediary located in another jurisdiction, please find a separate Local legislation section for the jurisdiction of the intermediary below. For clients accessing local markets via other Clearstream entities, please also review the Local legislation section in the relevant Market Link Guide for such Clearstream entity.
Local legislation of the CSD/Intermediary | |
Date of legal opinion | 16 December 2024 |
Nature of rights on securities | Substantive law of the jurisdiction will govern the nature of the rights on the securities. Rights on the securities are rights in rem. No differences in conclusions in case of sub-accounts for Clients within the Direct CSD Account. |
Recognition of nominee concept | Nominee concept recognised under local law. |
No right of retention to the CSD under local law | CSD has a lien or similar encumbrance under local law, but such lien could be contractually excluded or waived. |
No upper-tier attachments | Securities would not be subject to attachment. |
No right of use without prior consent | Laws of the jurisdiction restrict CSD from using securities without Clearstream’s prior consent. |
Segregation of assets at the CSD | CSD is under legal/regulatory obligation to segregate the securities held for each participant. |
Loss of assets | No general restrictions on ability to recover lost assets or on indemnification under local law, subject to certain exceptions noted by counsel (such as force majeure, no negligence by the CSD, liability caps, sovereign immunity, etc.). |
Ability to recover client assets in the event of insolvency of CSD | Securities would be recoverable. |
Ability to recover client assets in the event of insolvency of Agent | Securities would be recoverable in the event of insolvency of the Subcustodian. Claim to Cash as a general creditor in case of insolvency of the Subcustodian. |
Shortfall pro-rated among holders | Shortfall in the securities may be allocated pro rata, but counsel noted certain nuances. |
Settlement finality in case of insolvency | Transfer orders are irrevocable and finality of settlement is assured. |