Hong Kong Exchanges and Clearing Limited (HKEX), the operator of major exchanges like the Stock Exchange of Hong Kong and the London Metal Exchange, has unveiled a new platform called "Synapse" designed to expedite equity settlement processes. This innovative platform will make use of smart contracts written in the DAML programming language, aiming to streamline post-trade procedures and enhance operational efficiency, as announced on October 4.
Synapse will be deployed on the Stock Connect system, a channel provided by the Hong Kong Exchange that enables international investors to purchase more than 1,000 mainland Chinese stocks through routing in Hong Kong. The Hong Kong Exchange reported that in the first half of 2023, the average daily trading volume on the Shanghai-Hong Kong Stock Connect reached RMB 109.3 billion, marking a 5% year-on-year increase and a 50% increase from 2020 levels.
HKEX plans to establish a link with the Hong Kong Depository and Clearing Corporation through its institutional transaction processing services, enabling centralized matching of cross-border transactions. This integration will lead to the automatic generation of settlement instructions, thereby streamlining the trade confirmation workflow.
Hong Kong has been making strides in becoming a hub for Web3 companies with the support of China's central government. It recently launched retail trading on a licensed cryptocurrency exchange in August. However, this period also witnessed the largest Ponzi scheme in Hong Kong's history, involving an estimated $166 million worth of user funds misappropriated by the cryptocurrency exchange JPEX, which is currently under investigation.
