Hong Kong Exchanges and Clearing (HKEX) has launched a new integrated settlement acceleration platform, HKEX Synapse.
Designed to create improved efficiency and transparency for the market, Synapse is the latest enhancement to Stock Connect — a mutual market access programme that connects Mainland Chinese markets with those in Hong Kong.
The platform will deploy DAML smart contracts to standardise and streamline post-trade workflows, while also reducing settlement risk. It will launch on 9 October 2023.
Synapse is designed to eliminate sequential processes, offering real-time visibility and insights into the settlement process for all market participants.
Asset managers, brokers, custodians and clearing participants can benefit from real-time data synchronisation and improved scalability, says HKEX. It will enable users to handle the growing volume of trades through Northbound Stock Connect.
The average daily turnover of Northbound Stock Connect totalled RMB 109.3 billion (US$15.2 billion) in the first half of 2023, a 5 per cent rise from the previous year, and a 50 per cent increase from 2020 levels.
HKEX Synapse will be linked with the Depository Trust & Clearing Corporation (DTCC) through its Institutional Trade Processing (ITP) service.
The exchange says global investors and HKEX participants will benefit from the central matching of cross-border transactions using DTCC’s CTM service, which will generate and send settlement instructions to the Synapse platform, streamlining the trade confirmation and settlement notification process.
Commenting on the announcement, Glenda So, HKEX Group head of emerging business and fixed income and currency (FIC), says: “We are delighted to launch HKEX Synapse, a major enhancement to our Stock Connect infrastructure that will support the next phase of growth for international participation in Mainland China’s equity markets.
“This technology-empowered 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.”
