Hong Kong's gold central clearing and settlement system commences trial operation today supported by full package of targeted initiatives (with photos)
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The Financial Secretary, Mr Paul Chan, said, "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, said, "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 central clearing and settlement system commences today with transactions completed
The trial operation of Hong Kong's new central clearing and settlement system for gold commences today, with trading, clearing, and settlement processes already in service. Operating under the governance of the Hong Kong Precious Metals Central Clearing Company Limited (HKPMCC), a wholly government-owned entity, the system provides efficient and reliable clearing and settlement services for bilateral and over-the-counter (OTC) gold transactions.
Key features of the system include:
- Operation is governed by a comprehensive Clearing Rulebook, which clearly defines the rights, obligations, rules, and procedures for all participating banks and designated vault(s).
- A central ledger is established to record settlement activities, gold transfers, and balances of participating banks, and interfaces seamlessly with designated vault(s) to facilitate and record physical gold deposits and withdrawals.
- Gold balances in the system are held and settled on an unallocated basis, with commingled holding enabling efficient settlement for gold of international standards among participants. Eligible gold for settlement comprises approximately 400 fine troy ounce bars meeting international standards.
The Board of Directors of the HKPMCC comprises the Government, the Shanghai Gold Exchange, regulators, and 11 banks to fully incorporate market feedback. Meanwhile, Bank of China (Hong Kong) Limited has been appointed as the settlement institution and designated vault of the system, operating under the oversight of the HKPMCC.
In tandem with the commencement of the trial operation, the first batch of gold has been successfully deposited into the designated vault, and the first batch of trading and settlement activities has also been completed. The trial operation has received strong support from key market participants, including banks and financial institutions, mining companies, refiners, jewellers, and institutional participants. A list of key participants in the trial operation is set out in the Annex.
The HKPMCC will continue to closely monitor the trial operation of the system, and strive to identify areas for enhancement to provide further facilitation to market participants before the official commissioning of the system. The system will also establish connectivity with the Real Time Gross Settlement system to enable Delivery versus Payment settlement, seamlessly linking gold trading and physical delivery with Hong Kong's world-class cash clearing and settlement capabilities, as well as reducing settlement risk and improving overall operational efficiency.
Co-ordinated initiatives are also in place along with the commencement of the trial operation of the central gold clearing and settlement system to demonstrate the Government's comprehensive and determined efforts in building a modern, interconnected, and internationally competitive gold trading ecosystem. These measures include:
(1) Initial phase of Delivery Connect launched with Shanghai Gold Exchange
On the basis of the co-operation agreement signed in January this year, the FSTB and the Shanghai Gold Exchange launched the initial phase of Delivery Connect today. Under this initiative, the HKPMCC has applied to become an international member of the Shanghai Gold Exchange and opened a physical gold account. Market participants can choose to deposit 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 participants can participate in both the on-exchange market of the Shanghai Gold Exchange and the OTC market of Hong Kong. This will facilitate the flow of physical gold between the HKPMCC system and the Shanghai Gold Exchange system, effectively connecting the gold markets of Hong Kong and Shanghai, and achieving mutual benefit and win-win outcomes.
The introduction of Delivery Connect is welcomed 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 participated in the initial phase of Delivery Connect as the first batch of participants. Two-way transfers by these banks have successfully been completed today.
(2) New HAU price ticker launched
A new HAU price ticker was launched today to provide a Hong Kong-specific reference rate. Developed in partnership with Bloomberg, this ticker reflects the indicative bid/offer prices contributed by market participants in the gold trading market, thereby providing greater convenience and reference value for international banks, hedge funds, refiners, corporates, and sovereign institutions in terms of price discovery, liquidity, and overall trading participation, particularly for those active during Asian trading hours. The ticker is now accessible on Bloomberg and London Stock Exchange Group platforms for market reference.
(3) Expansion of storage capacity and refining capability
As announced in the 2025 Policy Address, the Government is supporting the Airport Authority Hong Kong (AAHK) and financial institutions in establishing world-class gold storage facilities, with a target to expand Hong Kong's total storage capacity to over 2 000 tonnes within three years, positioning the city as a trusted global vault of choice. The AAHK has already launched a project to develop vaulting facilities on a thousand-tonne scale to meet local storage and delivery demands. The Government welcomes market interest, and will continue to encourage and attract more institutions to explore expanding their storage capacity in Hong Kong.
The Government is also discussing with the industry the expansion of the refining capability of precious metals in Hong Kong. Several enterprises that are qualified to refine gold to international standards have already expressed interest in expanding into the Hong Kong market. The Government will continue to work closely with interested enterprises to help them tap into the vast opportunities in the city.
(4) Diversifying gold investment products
Since January this year, the variety of gold investment products in the Hong Kong market has continued to increase. The listing of three additional gold ETFs has brought the total number of such ETFs to six. To further enhance liquidity and provide sophisticated hedging, the Hong Kong Exchanges and Clearing Limited (HKEX) has revitalised its USD gold futures contract, and launched trading fee waivers and incentive programmes to boost overall market liquidity and attract broader market participation. Concurrently, the HKEX is exploring the development of a brand-new RMB gold futures contract with delivery support from the Shanghai Gold Exchange, ensuring Hong Kong's expanding physical market is fully supported by robust, world-class risk-management tools.
(5) Exploring tax incentives
The Government has introduced an amendment bill into the Legislative Council to enhance the preferential tax regimes for funds and single family offices, including expanding the scope of qualifying investments to cover precious metals, which is expected to promote investment activities related to precious metals. Furthermore, the Government is exploring offering tax incentives for eligible institutions conducting gold trading and settlement in Hong Kong.
(6) Co-ordinating insurance arrangements
The Insurance Authority has been co-ordinating with international, Mainland, and local insurance companies interested in providing specie insurance for high-value precious metals. It will also launch a dedicated specie insurance hotline within July 2026 to support market participants in connecting with relevant insurers.
(7) Enhancing flexibility of MPF investments in gold ETF
The Mandatory Provident Fund Schemes Authority will optimise its approval mechanism for gold ETFs to facilitate Mandatory Provident Fund investments into this asset class. Furthermore, the Government will submit the relevant amendment bill to the Legislative Council in the fourth quarter of this year to enhance MPF fund investment regulations, which will include relaxation of restrictions on MPF fund structure.
(8) Establishing an industry-led trade association
The Government is in the process of assisting the industry to establish an industry-led trade association with a view to consolidating resources, strengthening international promotion efforts, and fostering closer ties with global stakeholders.
By strengthening infrastructure, enhancing connectivity, and providing targeted supporting measures across the industry chain, Hong Kong is well positioned to develop into a leading global gold trading, clearing, and reserve hub.
Ends/Tuesday, July 7, 2026
Issued at HKT 11:00
Issued at HKT 11:00
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