Hong Kong Exchanges and Clearing Limited (HKEX) will launch its highly anticipated settlement acceleration platform for Stock Connect on Monday 9 October.
First announced back in 2020 the platform uses DAML smart contracts to standardise and streamline post-trade workflows, enhancing operational efficiencies and transparency whilst reducing settlement risks.
HKEX said Synapse eliminates sequential processes, offering real-time visibility and insights into the settlement process for all market participants. Asset managers, brokers, custodians and clearing participants will benefit from real-time data synchronisation and improved scalability, helping them to handle the growing volume of trades through Northbound Stock Connect.
Average daily turnover of Northbound Stock Connect totalled RMB109.3 billion ($15.2 billion) in the first half of 2023, up 5% from a year earlier, and a 50% increase from 2020 levels.
“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, said HKEX group head of emerging business and FIC, Glenda So.
“We are very proud to be introducing Synapse to our market and we look forward to continuing to embrace new technologies that benefit our markets and our customers in the future.”
Available as an optional service, HKEX Synapse will support institutional investors participating in Northbound Stock Connect to better manage their post-trade operations across different time zones, in particular with regard to adhering to the Mainland securities market’s T+0 settlement cycle.
HKEX Synapse will be linked with The Depository Trust & Clearing Corporation (DTCC) through its Institutional Trade Processing (ITP) service. With this integration, global investors and HKEX participants will benefit from the central matching of cross-border transactions using DTCC’s CTM service, which will automatically generate and send settlement instructions to the Synapse platform, streamlining the trade confirmation and settlement notification process.