HKEX Synapse: Simplifying Post-Trade Operations
The HKEX Synapse is the latest addition to the Stock Connect program, which connects Mainland Chinese markets with Hong Kong markets. This new platform aims to standardize and simplify post-trade operations, reducing settlement risks and enhancing operational efficiency. It will be available as an optional service for institutional investors, particularly those with global operations spanning different time zones.
Real-Time Visibility and Increased Volume
In the first half of 2023, the average daily turnover of Northbound Stock Connect reached RMB109.3 billion, showing a 5% increase from the previous year and a significant 50% increase compared to 2020. To effectively manage this growing volume, HKEX Synapse will provide real-time visibility and insights into the settlement process for all market participants.
Integration with DTCC’s Institutional Trade Processing Service
HKEX Synapse will integrate with The Depository Trust & Clearing Corporation (DTCC) through its Institutional Trade Processing (ITP) service. This integration will centralize the matching of international transactions using DTCC’s CTM service. The Synapse platform will receive settlement instructions automatically from DTCC, streamlining the process.
A Center for Web3 Companies Amid Financial Scandals
Hong Kong is striving to establish itself as a hub for Web3 companies. However, it is important to note that the city has also faced financial scandals, including an ongoing investigation into a Ponzi scam involving the JPEX crypto exchange. This factor should be taken into consideration when evaluating Hong Kong’s position in the crypto industry.
Building a Stronger Ecosystem
“This technology-enabled platform will not only improve post-trade efficiencies but will, over time, build a better, stronger ecosystem, supporting both market growth and investor growth strategies,” commented Glenda So, Head of Emerging Business and FIC for the HKEX Group.
Hot Take: Enhancing Efficiency and Growth in the Crypto Market
The introduction of HKEX Synapse is set to simplify post-trade operations in the Stock Connect program. By standardizing processes and providing real-time visibility, this platform aims to reduce settlement risks and enhance operational efficiency for institutional investors. With the integration of DTCC’s ITP service, international transactions can be matched seamlessly, further streamlining the settlement process. While Hong Kong aims to position itself as a center for Web3 companies, it must also address financial scandals that have occurred in the city. Nevertheless, HKEX Synapse is poised to contribute to a stronger ecosystem and support market growth in the crypto industry.
By
By
By
By
By