Hong Kong Exchanges and Clearing Limited (HKEX), operator of the Hong Kong Stock Exchange, the Hong Kong Futures Exchange and the London Metal Exchange, is launching a new platform to accelerate stock settlement. The platform, called Synapse, will use smart contracts in the DAML programming language to streamline post-trade flows and enhance operational efficiency, according to an October 4 report. advertisement.
Synapse will be deployed on Stock Connect, HKEX’s channel that enables international investors to access more than 1,000 mainland Chinese stocks through routing in Hong Kong. “Northbound Stock Connect’s average daily trading volume reached CNY109.3 billion in the first half of 2023, up 5 percent from the previous year, and up 50 percent from 2020 levels,” the Hong Kong Stock Exchange wrote.
The Hong Kong Stock Exchange will be linked to the Hong Kong Depository and Clearing Corporation through an institutional trade processing service, allowing central reconciliation of cross-border transactions. Settlement instructions are then automatically generated and sent back to the Synapse platform, thus enhancing the trade confirmation workflow.
With a silent nod from China’s central government, Hong Kong has quickly turned into a hub for Web3 companies, with the retail launch of licensed cryptocurrency exchanges in August. However, the largest Ponzi scheme in Hong Kong history also occurred during this time, with an estimated $166 million in user funds siphoned off through cryptocurrency exchange JPEX. The investigation is ongoing.
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