HKEX launches settlement acceleration platform for Stock Connect, links it to DTCC

Hong Kong Exchanges and Clearing Limited announced the launch of HKEX Synapse, a new integrated settlement acceleration platform that uses the latest technology to deliver greater market efficiency and transparency. Synapse is the latest enhancement to Stock Connect, the unique mutual market access program that connects Mainland Chinese markets with those in Hong Kong.

It will deploy DAML smart contracts to standardize and streamline post-trade workflows, enhancing operational efficiencies and transparency whilst reducing settlement risks. HKEX Synapse eliminates sequential processes, offering real-time visibility and insights into the settlement process for all market participants.

Asset managers, brokers, custodians and clearing participants will benefit from real-time data synchronization and improved scalability, helping them to handle the growing volume of trades through Northbound Stock Connect. Average daily turnover of Northbound Stock Connect totalled RMB109.3 billion ($15.2bn) in the first half of 2023, up 5% from a year earlier, and a 50% increase from 2020 levels.

HKEX Group head of Emerging Business and FIC, Glenda So, said in a statement that Synapse is a major enhancement to the Stock Connect infrastructure that will support the next phase of growth for international participation in Mainland China’s equity markets: “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.”

Available as an optional service, HKEX Synapse will support institutional investors participating in Northbound Stock Connect to better manage their post-trade operations across different time zones, in particular with regard to adhering to the Mainland securities market’s T+0 settlement cycle.

In addition, the settlement platform will be linked with The Depository Trust & Clearing Corporation (DTCC) through its Institutional Trade Processing (ITP) service. With this integration, global investors and HKEX participants will benefit from the 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.


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