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HKEX Synapse – A Settlement Acceleration Platform For Stock Connect

Stock Connect is a landmark cross-border initiative that enables mutual market access between China and Hong Kong. The program for Northbound trading allows international institutional investors to have direct access to China’s equity markets via the Hong Kong securities market. Domestic investors from China, on the other hand, use the Southbound trading link to invest in designated securities listed in Hong Kong.

Since the launch of Stock Connect in 2014, international participation in the Northbound Stock Connect has been growing. This trend is expected to continue with the inclusion of China’s A-shares in emerging market indices and the popularity of passive investing.

Managing Post-trade Operational Challenges
Over the years, Stock Connect has continued to evolve with enhancements that make it more efficient and easier to access China’s equity markets. However, the operational complexities associated with time zone and settlement cycle differences for settling Northbound trades remain. The lack of interoperability among existing solutions created additional operating, processing and counterparty risks.

Automating and Streamlining Post-Trade Processes
To accelerate the processing and settlement of trades, the Hong Kong Exchanges and Clearing Limited (HKEX), in collaboration with DTCC, has launched HKEX Synapse, an optional DAML smart contract technology settlement acceleration platform, to complement the existing post-trade infrastructure for Northbound Stock Connect. The combined solution aims to standardize and streamline post-trade processes and workflows thereby improving operational efficiencies, enhancing transparency and minimizing trade failure.

Learn More

Fireside chat with Edwin Lee, HKEX

Go to DTCC's Institutional Trade Processing