HKEX Launches Synapse, A Settlement Acceleration Platform for Stock Connect

On October 4, 2023, Hong Kong Exchanges and Clearing Limited (HKEX) published a statement to inform that it will introduce a new integrated settlement acceleration platform known as HKEX Synapse. This platform, which is set to launch on October 9, 2023, is designed to enhance market efficiency and transparency, particularly within the context of Stock Connect, which connects Mainland Chinese markets with those in Hong Kong. HKEX Synapse employs DAML smart contracts to standardize and streamline post-trade workflows, thereby enhancing operational efficiencies and reducing settlement risks. This move is in line with HKEX’s ongoing commitment to the advancement of Stock Connect as an efficient, accessible, and cost-effective channel for investors engaging in capital markets in both Mainland China and Hong Kong.
HKEX Synapse eliminates sequential processes, „offering real-time visibility and insights into the settlement process for all market participants“, including asset managers, brokers, custodians, and clearing participants. This real-time data synchronization and improved scalability are essential to accommodate the growing volume of trades through Northbound Stock Connect, which saw a 5% increase in average daily turnover in the first half of 2023 compared to the previous year.
Furthermore, HKEX Synapse offers institutional investors the option to manage their post-trade operations effectively across different time zones, particularly with regard to adhering to the Mainland securities market’s T+0 settlement cycle. The platform will also be integrated with The Depository Trust & Clearing Corporation through its Institutional Trade Processing service, simplifying the trade confirmation and settlement notification process for global investors and HKEX participants.