Hong Kong Exchanges and Clearing Limited (HKEX) Launches Synapse, a Settlement Acceleration Platform for Stock Connect
Hong Kong Exchanges and Clearing Limited (HKEX) is introducing a new equities settlement acceleration platform called Synapse. This platform will utilize smart contracts in the DAML programming language to streamline post-trade processes and improve operational efficiencies. The announcement was made on October 4.
Synapse will be deployed on Stock Connect, an HKEX channel that allows international investors to access over 1,000 Mainland Chinese stocks through routing in Hong Kong. The developers highlighted the significant growth of Stock Connect, with an average daily turnover of RMB109.3 billion in the first half of 2023, a 5% increase from the previous year and a 50% increase from 2020 levels.
Enhancing Trade Confirmation Workflow
HKEX will connect with Hong Kong’s Depository Trust & Clearing Corporation (DTCC) through its Institutional Trade Processing (ITP) service. This connection enables the central matching of cross-border transactions. Settlement instructions are automatically generated and sent back to the Synapse platform, improving the trade confirmation workflow.
Hong Kong’s Transformation as a Web3 Hub
Hong Kong has been rapidly establishing itself as a hub for Web3 companies, with the recent launch of retail trading for licensed crypto exchanges in August. However, this transformation has not been without challenges. During this time, the largest Ponzi scheme in Hong Kong’s history took place, resulting in approximately $166 million worth of users’ funds being embezzled by the JPEX crypto exchange. The investigation into this incident is still ongoing.
Hot Take: HKEX Introduces Synapse to Accelerate Equities Settlement on Stock Connect
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the launch of Synapse, an equities settlement acceleration platform for Stock Connect. By utilizing smart contracts in the DAML programming language, Synapse aims to enhance operational efficiencies and streamline post-trade flows. The platform will be deployed on Stock Connect, which enables international investors to access Mainland Chinese stocks through routing in Hong Kong. With the average daily turnover of Stock Connect increasing by 5% from the previous year and 50% from 2020 levels, this move comes at a crucial time for HKEX. However, Hong Kong’s journey to becoming a Web3 hub has not been without challenges, as highlighted by the recent Ponzi scheme involving JPEX crypto exchange.
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