The partnership will see HKEX Synapse link to DTCC’s institutional trade processing (ITP) services.
HKEX Synapse is intended to help institutional investors participating in Northbound Stock Connect to better manage their post-trade operations across different time zones, in particular adhering to the mainland securities market’s T+0 settlement cycle.
Synapse will standardise and streamline the post-trade workflows of Northbound Stock Connect using digital asset modelling language (DAML) smart contracts, which HKEX suggested will increase efficiencies for market participants.
Asset managers, brokers, global custodians, local custodians, and clearing participants are set to benefit from the improved connectivity and enhanced capacity to handle the growing volume of trades flowing through Stock Connect.
The new settlement platform will allow global investors and HKEX participants to central match cross-border transactions on the Synapse platform.
Meanwhile, Digital Asset has been selected as the vendor to develop HKEX Synapse.
“Embracing new technology to further develop our markets is a cornerstone of our strategy and we are delighted to work together with DTCC and Digital Asset on this exciting new enhancement to our landmark mutual access programme with Mainland China,” commented Charles Li, HKEX chief executive.
By deploying DAML smart contracts, HKEX Synapse said it will be able to create settlement instructions and provide status updates to all parties along the settlement chain, which will provide concurrent processing and improve transparency for market participants.
Digital Asset also recently partnered with BNP Paribas Securities Services to design a number of real-time trade and settlement apps using DAML smart contracts.
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