Market Turnover
-






-
-
|
|
|
|
|
|
-
-
-
Loading

Synapse

Synapse_1440x500_R2_EN

 

Overview

Stock Connect, the landmark mutual market access programme linking the Hong Kong and Mainland China equity markets, has pioneered greater accessibility and investor choice, resulting in record trading volumes. As international investors’ participation in China’s onshore market grows, so too do the post-trade complexities. Market participants have been deploying tailored solutions to improve post-trade efficiencies, but the lack of interoperability amongst these solutions has created additional operating, processing and counterparty risks.

In collaboration with The Depository Trust & Clearing Corporation (DTCC), Hong Kong Exchanges and Clearing Limited (HKEX) is launching HKEX Synapse, a new integrated settlement platform, to complement the existing post-trade infrastructure for Northbound Stock Connect. With the use of DAML smart contract technology, the solution aims to standardise and streamline post-trade workflows, maximising connectivity and efficiencies in a transparent and secure manner.

 

playtime
volume

Updated 28 Jun 2021

Pilot Programme

HKEX is pleased to welcome the first group of participants to join its pilot programme for HKEX Synapse.

As part of the pilot programme, market participants, in their respective roles that include asset managers, brokers, custodians, and clearing participants, will take part in workshops and testing of the Synapse platform. The testing programme will help to further enhance HKEX Synapse’s design and features, ahead of its launch targeted in 2022. 

Pilot Programme Participants*

BNP Paribas

China Asset Management (Hong Kong) Limited

Citibank N.A.

CSOP Asset Management Limited

HSBC
Invesco Hong Kong Limited
Mondrian Investment Partners
Northern Trust
Standard Chartered Bank (Hong Kong) Limited
State Street

The Bank of New York Mellon

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Names are organised in alphabetical order and this list will be updated periodically

Updated 30 Aug 2021

HKEX Synapse

 

Stock Connect Challenges  
Bespoke processes within tight settlement window        Stock Connect is a T+0 market, but is integrated into the established settlement flow designed for a T+2 market. Various bespoke solutions have been introduced to address market needs.

Operational risk

Multiple bespoke solutions, many with manual processes, increase the processing burden and operational risks.

Complexity due to low transparency

Participants have no real-time visibility into the settlement status, reducing the time they have to resolve exceptions.

Scalability

Lack of standard processes and manual workflow mean scalability is an issue; further index inclusion increases risks and may limit access.

Barrier to participation

Participants may be discouraged from participating in the Stock Connect market due to the additional risks and costs arising from bespoke solutions.

 

The Solution: HKEX Synapse

HKEX Synapse, an optional service for Northbound Stock Connect, provides a standardised and centralised platform that generates a single source of truth for settlement instruction workflow, enabling the enrichment of trades with Standing Settlement Instructions from DTCC’s central matching solution - CTMTM. It then simultaneously creates settlement instructions to all parties along the settlement chain, facilitating concurrent processing, providing greater efficiency and transparency to Stock Connect’s market participants, while connecting them to a more seamless post-trade workflow.


With the introduction of HKEX Synapse, the trading flows between CCEP and the Stock Exchange of Hong Kong (SEHK) and the matching, clearing and settlement schedules within CCASS of Hong Kong Securities Clearing Company (HKSCC) remain unchanged. For market participants who do not subscribe to HKEX Synapse’s services, their clearing and settlement processes remain unchanged.

 
HKEX Synapse - Value Propositions    
Leverage existing connectivity

Leverage open source DAML smart contract Technology. Using APIs for flexible connectivity to Synapse (ISO20022) allows for efficient integration.

Standardises settlement initiation flow       

Synapse introduces a standardised settlement initiation workflow, which reduces operational risk, while improving scalability.

Improves transparency

Synapse provides instantaneous status updates, allowing for faster processing and improved exception management.

Encourages Stock Connect adoption            

Standardising workflows and reducing the risks and costs associated with bespoke solutions will alleviate compliance burdens and encourage new entrants to the Stock Connect market.

Leverages new technology and latest SWIFT standards                                                   

Synapse leverages open source DAML smart contract technology. Using APIs for flexible connectivity to Synapse (adhering to ISO20022 standards) allows for efficient integration, while also moving the market into the future.

 

HKEX Synapse high level workflow

Synapse flow (ENG)

 

Updated 28 Jun 2021

Getting Started

Post Trade Product Development
Email: posttrade-cd@hkex.com.hk 
DTCC
Email: askdtccasia@dtcc.com 

 

HKEX Synapse Leaflet

HKEX Synapse FAQ (Updated as of Nov 2020)

Updated 12 May 2021

6Ld9GlAaAAAAAPdyOPgVdMekDpUufOLba4Kl02BL

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Your form submission was unsuccessful. Please try again using other device or try again later.