HKEX Names Firms Piloting New Stock Connect Settlement Platform

BNP Paribas, Citibank, CSOP Asset Management, Invesco, Northern Trust, State Street, Standard Chartered, BNY Mellon and HSBC will join the HKEX Synapse pilot. 

HKEX (Hong Kong Exchanges and Clearing) has announced the first group of participants to join its pilot programme for Synapse, the new Stock Connect settlement acceleration platform.

The planned introduction of HKEX Synapse was first announced last November. The settlement acceleration platform was developed by Digital Asset, and uses DAML smart contracts to standardise and streamline the post-trade workflows of Northbound Stock Connect.

The initiative is aimed at maximising efficiencies for market participants in a transparent, secure and reliable manner. DAML smart contracts will allow for the simultaneous creation of settlement instructions and provision of status updates to all parties along the settlement chain, facilitating concurrent processing and improving transparency for market participants.

On Monday (28 June), HKEX said nine firms will join the Synapse pilot programme – BNP Paribas, Citibank N.A., CSOP Asset Management, Invesco Hong Kong, Northern Trust, State Street, Standard Chartered Bank, BNY Mellon and HSBC.

The names and list of pilot participants will be updated periodically, HKEX  said.

As part of the pilot programme, market participants – including asset managers, brokers, custodians, and clearing participants – will take part in workshops and testing of Synapse, to familiarise themselves with the platform and understand how their own settlement operations infrastructure can efficiently integrate within the Synapse environment.

The pilot programme will help to further enhance Synapse’s design and features, ahead of its launch, targeted for 2022, HKEX said.

The launch of HKEX Synapse will significantly improve connectivity for global investors, enhancing their post-trade capacity and their ability to handle the heavy trading volumes flowing through Stock Connect, said HKEX head of post-trade Glenda So.

“This is another key development in optimising the two way flow of capital between HKEX and our Mainland exchange partners, through Stock Connect,” she said.

In Q1 2021, Stock Connect’s Northbound and Southbound average daily turnover reached record quarterly highs of CNY 126.8 billion and HKD 60.8 billion respectively.

Details of the pilot programme are available here.

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