Hong Kong Exchanges and Clearing Limited (HKEX), a leading operator of equity, commodity, fixed income, and currency markets, has announced the launch of its new platform called “Synapse.” This platform aims to accelerate equities settlement and improve operational efficiencies through the use of smart contracts programmed in DAML.
Synapse integration with Stock Connect
Synapse will be integrated into Stock Connect, an HKEX channel that enables international investors to access over 1,000 mainland Chinese stocks through Hong Kong. Glenda So, HKEX Group Head of Emerging Business and FIC, stated, “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.”
HKEX has highlighted the exceptional performance of its Stock Connect platform. According to the company, the average daily turnover of Northbound Stock Connect reached RMB 109.3 billion in the first half of 2023, marking a 5% increase compared to the previous year and a significant 50% surge from 2020 levels.
Institutional Trade Processing service integration
HKEX plans to establish a connection between Hong Kong’s Depository Trust and Clearing Corporation and Synapse via its Institutional Trade Processing service. This integration will automate the generation and transmission of settlement instructions, streamlining the trade confirmation workflow. The announcement stated, “With this integration, global investors and HKEX participants will benefit from 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.”
The Synapse platform is set to launch in Hong Kong on October 9, 2023.
Challenges and concerns for Hong Kong’s digital asset sector
While Hong Kong has been positioning itself as a hub for Web3 companies, recent challenges have emerged. The city recently experienced the largest Ponzi scheme in its history, involving the embezzlement of approximately $166 million from JPEX crypto exchange users. The investigation into this incident is currently ongoing.
Analysts and industry experts have expressed concerns that the fallout from the JPEX debacle will present significant challenges for virtual asset companies and hinder the government’s efforts to expand the sector. Cyrus Ip, a crypto venture investor and chief business officer at artificial intelligence start-up DreamWld Technology, said, “At a time when people still don’t completely understand what Web3 is, the JPEX case has created a negative impression for people in Hong Kong on digital assets and the broader Web3 industry.”
