Created under China’s Stock Connect programme, Hong Kong Exchange and Clearing Limited (HKEX) in collaboration with Digital Asset joined forces to develop a blockchain platform for post-trade allocation of trades.
The plan was revealed by HKEX CEO Charles Li at a tech event in Hong Kong. He stated that a distributed ledger technology could be used to limit the “post-trade operational challenges” faced by HKEX’s market participants and global investors. According to Li, there would be a long journey of distribution and innovation.
The blockchain market seems to be extremely hot in Hong Kong, and the platform dedicated to the post-trade allocation of stocks wouldn’t be a debut in the blockchain industry for HKEX. Back early last year, they revealed plans to launch a private market where startups can acquire a blockchain-based share registration, as well as work in pre-IPO financing and receive all the required regulations.
The Stock Connect programme where a platform is being presented has been built as the collaboration between the Hong Kong stock exchange and its counterparts in Shanghai and Shenzhen, allowing investors from other nations trade in each other’s market using their country’s stock exchange platform.
According to Li, the prototype of the platform has been already tested by a few market participants and will be soon presented to a larger group. The Hong Kong stock exchange leaders have called on market participants in Hong Kong and China to “sign up for the post-trade allocation and settlement initiation platform for the northbound Stock Connect programme.” After its public launch, the platform can potentially resolve a number of long-term issues that market participants have been facing, including real-time synchronization of post-trade status with providing simultaneous updates to asset managers, brokers, custodians, as well as HKEX’s clearing house.