HKEX Synapse goes live to address T+1 needs between Hong Kong and Mainland China

Rick Steves

The development of Synapse by HKEX is complementary to the global push towards settlement cycle reduction, as seen most recently in North America which is preparing to move to a T+1 settlement cycle around May 2024.

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Citi Securities Services has successfully settled trades for China Asset Management (Hong Kong) on the Hong Kong Exchanges and Clearing Limited (HKEX) Synapse platform.

This was among the first trades executed and settled on the newly launched Synapse platform, which has gone live today.

HKEX Synapse complements Northbound Stock Connect post-trade infrastructure

HKEX Synapse is the exchange’s new integrated settlement acceleration platform designed to complement the existing Northbound Stock Connect post-trade infrastructure.

Launched in 2014, Stock Connect is a landmark mutual market access program connecting the equity markets of Mainland China and Hong Kong, paving the way for Hong Kong and international investors to access the China A Share market.

Citi has worked closely with HKEX, since being invited to participate in the Synapse pilot project in 2019, to develop and bring online a fully automated API-powered Synapse connectivity solution. Citi is the first and only bank in Hong Kong to offer this capability and in the process has fully aligned its custody platform to offer the complete benefits of Synapse to its clients.

Two-way flow of capital between Hong Kong and the Mainland

Glenda So, Head of Emerging Business and FIC  at HKEX, said: “We warmly welcome Citi as one of the inaugural participants to HKEX Synapse. This new integrated settlement acceleration platform for Stock Connect will enhance operational efficiencies and help support the development of a more robust and interconnected market ecosystem. Citi is the first participant to fully integrate its custody platform with Synapse, enabling seamless execution of trades from Day 1. We would like to thank them and all participants that have supported the design, build and roll out of Synapse and we look forward to welcoming more participants to the platform as it continues to grow.”

Tian Gan, CEO of ChinaAMC (HK), commented: “We are delighted to be among the first group of asset managers to pilot the HKEX Synapse platform. This marks another significant win in optimizing the two-way flow of capital between Hong Kong and the Mainland. As a leading Chinese fund management company in Hong Kong, we are working diligently with our partners such as Citi as our custodian, to prepare for this rollout, as we connect China and the world.”

Caroline Chan, Hong Kong Head of Securities Services at Citi, added: “Stock Connect is the preferred route for international investors accessing Mainland China securities. The API solution that Citi has designed is fully compatible with Synapse and will help address existing operational complexities. The development of Synapse further cements Hong Kong’s position as a leading international financial hub as it innovates and enhances its existing market infrastructure to provide a seamless experience to investors.”

Synapse addresses T+1 settlement cycle

The development of Synapse by HKEX is complementary to the global push towards settlement cycle reduction, as seen most recently in North America which is preparing to move to a T+1 settlement cycle around May 2024. The Synapse platform provides international and local investors with greater transparency and visibility over transaction statuses, which is important given the time zone differences that affect operating and processing hours.

With approximately USD$27.8 trillion1 of assets under custody, administration and trust worldwide, and a leading proprietary network spanning more than 60 markets, Citi Securities Services provides cross-border support for clients with extensive on-the ground local market expertise, innovative post-trade technologies, customized data solutions, and a wide range of securities services solutions that can be tailored to meet clients’ needs.

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