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. |
Legal arrangements
The below section is based on the legal opinion obtained by CBL that was issued on 4 October 2023. 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.
No insolvency proceedings against the custodian | Confirmed |
Custodian liability for negligence | Confirmed |
Book-entry regime with in rem rights | Confirmed |
Recognition of nominee concept | Confirmed |
No right of retention to the custodian | Confirmed |
Segregation of assets at the custodian | Confirmed |
No right of use | Confirmed |
No upper-tier attachments | Local law does not prohibit upper tier attachment. |
Insolvency of the custodian with no impact on CBL's rights | Confirmed |
Shortfall pro-rated among holders | Confirmed. Local law does not specifically address shortfall issues but a shortfall shall be borne on a pro rata basis by all the relevant account holders. Local court may however implement a different allocation approach (for example, "first in, first out" approach). |
| Record keeping period of at least 10 years | There is no general requirement under local law for Custodian to maintain records of services or activities with respect to its custody business for a period of at least 10 years. A retention period of records for a period of at least seven years was agreed with the Custodian. |
Settlement finality in case of insolvency | Confirmed |