Hong Kong Exchange and Clearing Limited (HKEX) joined forces with Digital Asset to develop a blockchain platform for post-trading allocation and trading processing.
This alliance was created in the framework of the Stock Connect program with China, based on a FinExtra report. HKEX worked on a prototype system for Stock Connect using the Digital Asset platform and intelligent contract modeling, in an attempt to accelerate the post-trade process and reduce regulatory risk among traders.
This plan was announced by HKEX CEO Charles Li at a technology event in Hong Kong, where he argued that distributed register technology could be used to limit the "post-trade operational challenges" faced by participants in the HKEX market and global investors who "trade" A shares listed in China through Stock Connect due to a "tight liquidation cycle for the activities of mainland China".
"This could be the beginning of a long journey of innovation and revolution, and we are really excited to share this important milestone," Li said.
HKEX has been quite busy experimenting with significant use cases for blockchain technology.
At the beginning of last year, it announced the intention to launch a private market in which startups can acquire a blockchain-based shareholding, make pre-IPO financing and obtain all the necessary regulations from financial regulations.
In addition, the startup blockchain in Hong Kong developed OneConnect, an international financial platform based on blockchains to allow companies to "access real-time, secure and complete commercial information to conduct loan risk assessment, increasing efficiency and potentially reducing costs ".
Stock Connect is a collaboration between the Hong Kong stock exchange and its Shanghai and Shenzhen counterparts. The purpose of the collaboration is to provide investors from member countries with reciprocal trade through the trading platform of their country.
A statement of the report says:
"The project explored how the DLT could allow HKEX market participants to specify settlement workflows in advance – helping to bridge time zones – while enabling real-time synchronization of post-trade status between funds, brokers, custodians and the HKEX clearing house. "
The stock market leaders of member countries extended the service and asked market participants in Hong Kong and China to "subscribe to post-trade assignment and the transaction initiation platform for the Stock Connect program to the north" .
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