HKEX Unveils 'Synapse' Platform Using Smart Contracts for Enhanced Equities Settlement
On Wednesday, October 4, Hong Kong Exchanges and Clearing Limited (HKEX) introduced an upgraded version of its Stock Connect program called "Synapse."
Synapse leverages smart contracts written in the DAML programming language to automate post-trade workflows and mitigate settlement risks, thereby enhancing operational efficiency in the equities settlement market.
This new system is set to be deployed and launched on Stock Connect on October 9, 2023. The Stock Connect program already allows Hong Kong investors to access over 1,000 Mainland Chinese stocks listed on the HKEX channel.
Notably, the Northbound Stock Connect, a component of this program, witnessed an average daily turnover of RMB 109.3 billion in the first half of 2023, marking a 5% increase from the previous year and a 50% surge from 2020 levels. This growth underscores the increasing popularity of this channel among international investors seeking access to Mainland Chinese stocks.
HKEX Synapse aims to streamline capital market procedures, offering real-time visibility and insights to all market participants. It represents an essential update for Northbound Stock Connect market participants by providing real-time data synchronization and enhanced scalability to accommodate rising trade volumes.
In a statement, Glenda So, HKEX Group Head of Emerging Business and FIC, said:
"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."
Synapse, as an added feature, will extend support to institutional investors using Northbound Stock Connect, enabling them to manage their post-trade operations across different time zones
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