Local bourse operator Hong Kong Exchanges and Clearing Ltd is considering applying blockchain to the Stock Connect to simplify the transaction process of stock trading between the SAR and the Chinese mainland.
HKEX Chief Executive Charles Li Xiaojia said the technology can tackle the differences in the trading mechanism between the Hong Kong and mainland stock markets.
HKEM Chief Executive Charles Li Xiaojia said the technology can tackle the differences in the trading mechanism between the Hong Kong and mainland stock markets
A-shares require trades to be settled the same day – including the settlement, payment and the transfer of ownership. For Hong Kong stocks, the transaction has to be settled within two days of the trading day.
For the convenience of international investors, the blockchain technology can help simplify the process and also be introduced to other markets, Li said.
The HKEX has listed leveraging technologies as one of its key strategies in its 2019-21 strategic plan, including artificial intelligence, blockchain, cloud infrastructure and data analytics to optimize processes, strengthen client engagement and engage different parts of the value chain in delivering cost-effective outcomes. It also suggested using blockchain in Stock Connect trade allocations.
The city has been stepping up efforts in blockchain technology and last year, a blockchain-based trade finance platform in Hong Kong was launched with the full backing of a consortium of 12 major banks.
The Hong Kong Monetary Authority, the city's banking regulator, on Wednesday announced a new agreement with the People’s Bank of China, the country’s central bank, on blockchain collaboration to connect digital trade finance platforms of Hong Kong and the mainland.
HKEX dropped the bid to buy London Stock Exchange Group in October. Li said on Thursday that the takeover proposal was now old news and HKEX, as the world's leading IPO market with abundant resources, will move forward.
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