Bonnie Y Chan

Starting in mid-2025, HKEX will gradually introduce new features to its Orion Cash Platform (OCP), a key integrated platform for Hong Kong’s cash market. These features aim to improve the efficiency, reliability, and automation of post-trade services.  

“At HKEX, we are committed to the long-term vibrancy of Hong Kong’s capital markets through ongoing investment in our technology and market infrastructure,” said Bonnie Y Chan, CEO of HKEX.  We are pleased to be launching the modernisation programme for our cash market platform, developing the capabilities for real-time and more efficient post-trade services. The ongoing development of OCP will ensure that our markets remain well-positioned for future opportunities as they continue to expand in breadth and diversity, strengthening Hong Kong’s status as an IFC.” 

As part of the enhancement programme, HKEX’s systems will be ready to support a T+1 settlement cycle by the end of 2025. However, the exchange said that any changes to Hong Kong’s settlement cycle will depend on extensive market consultations. 

Key upgrades are set to include automated post-trade report downloads, real-time data transmission and processing, and real-time settlement instruction matching,  

Richard Leung, group chief information officer at HKEX, said: “Platform development is a core part of HKEX’s strategy to futureproof its business and its markets. We are delighted to adopt modular architecture to introduce new post-trade features, in order to provide maximum flexibility for market adoption. 

“We look forward to engaging and collaborating with our market participants on this infrastructure advancement journey, as together we work to enhance the competitiveness of Hong Kong’s capital markets.” 

The new features will be rolled out progressively, with specific release dates announced in the future. In the meantime, HKEX said it will continue providing core post-trade processing through its Central Clearing and Settlement System (CCASS), while engaging with market participants on how the new OCP features will impact CCASS in the future. 

Earlier this year, HKEX announced the development of the Orion Derivatives Platform (ODP) for Hong Kong’s derivatives market.

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Chan returns to HKEX after previously serving for 15 years at the group in a range of teams including cash settlement, clearing operation and platform development.

Previously in her career, Chan held roles at various companies including AIA Group, Goldman Sachs, UBS and PricewaterhouseCoopers.

Most recently, Chan served as an advisor at several Canadian and international companies, leading projects in areas including blockchain solutions and the development of operations platforms and processes for corporates.

As part of the new role, Chan will be responsible for leading the post-trade team to further elevate HKEX’s service offering across its clearing and settlement systems, the firm confirmed.

Chan will report to Vanessa Lau, co-chief operating officer and group chief financial officer at HKEX.

“As a seasoned operations executive with more than 30 years’ experience, and with her solid knowledge of our clearing and settlement functions, I know Vicky will hit the ground running,” said Lau.

“Vicky joins at an exciting time as we continue to invest in modernising our operations capabilities – particularly with the announcement of our plans to develop the new Orion Derivatives Platform – and as we continue to take our trading and post trade operations to the next level.”

Read more: Bloomberg and HKEX enhance Swap Connect solutions to facilitate global investments for IRS market

Chan will succeed Hector Lau, head of clearing and depository, who has decided to part ways with the firm after seven years.

“I would also like to take this opportunity to thank Hector for his contributions over the past seven years and wish him the very best in his next adventure,” added Lau.

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The development coincides with the latest enhancements applicable to the Northbound Swap Connect scheme, which commence today and are introduced by China Foreign Exchange Trade System (CFETS), Shanghai Clearing House, and OTC Clearing Hong Kong.

Bloomberg’s enhancements to its Swap Connect solution include new features that support IRS contracts with International Monetary Market (IMM) dates and the ability to offset existing contracts in global investors’ portfolios.

Swap Connect is the OTC derivatives trading link between Mainland China and Hong Kong, which allows market participants to trade IRS.

Read more: Swap Connect launches as first derivatives trading link between Mainland China and Hong Kong

The new acceptance of mainstream IMM dates-based IRS contracts will enable the scheme to further meet investors’ risk management needs, according to Bloomberg.

The offset services will also allow investors to compress eligible IRS contracts with equal and opposite economics at the clearing house, helping reduce capital costs and bolster trading.

HKEX’s subsidiary for clearing has also implemented enhancements to Swap Connect in partnership with CFERS and SHCH.

The enhancements will offer improved flexibility for international investors to manage RMB interest rate risk through China’s onshore interbank markets.

The new measures aim to enable more international institutional investors to manage interest rate risk on RMB bond investments with RMB interest rate swaps, which will ultimately help bolster Hong Kong’s competitiveness and supporting the internationalisation of RMB.

“As we reflect upon one year of Swap Connect in operation, it is only fitting that the first derivatives mutual market access scheme between Mainland China and Hong Kong is taking another significant step forward,” said Dahai Wang, head of Greater China at Bloomberg.

“We will continue to work closely with our partners to optimise this solution, empowering global investors and helping to deliver new levels of access to China’s onshore financial markets.”

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During his tenure, Aguzin has overseen the delivery of a number of significant strategic initiatives, led efforts to promote HKEX internationally, opened new offices in New York and London and helped deliver a series of products and platforms, including the growth in HKEX’s derivatives and ETF markets.

“Leading HKEX has been the privilege of a lifetime, and I owe deep gratitude to all the hardworking colleagues, partners and stakeholders who have supported me along the way,” said Aguzin.

“I am particularly proud of the wide range of strategic initiatives and projects that the team has delivered in the last few years, despite the challenging and turbulent backdrop. Over the next few months, I will work closely with my team to ensure a smooth and seamless transition of leadership at the Group.”

Having held the role since May 2021, Aguzin will be replaced by Bonnie Yiting Chan, who will assume the role on 24 May 2024 for a term of three years.

Chan joined HKEX as head of listing in January 2020 and currently serves as co-chief operating officer of HKEX.

Before joining HKEX, she was a partner of Davis Polk & Wardwell from 2010 to 2019, where she oversaw a wide portfolio of clients in Hong Kong and across Asia.

Prior to that, she served as the head of IPO transactions, listing division, HKEX from 2007 to 2010.

“It is an honour to have been asked to become HKEX’s new chief executive officer, an organisation that I have worked for twice, and that I have had interactions with throughout my career,” said Chan.

“Nicolas has expertly led HKEX during a particularly turbulent few years in global markets, and I inherit a strong business that is well placed, both operationally and strategically. I would like to thank him for his leadership and personally wish him all the very best for the future.”

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The addition of these treasury bond futures will help regional and global investors interested in accessing China manage their interest rate and investment risks more effectively, according to HKEX. 

The launch will also help promote international participation in China’s equities and fixed-income markets and increase investment and risk management opportunities in Hong Kong’s markets.

Bond Connect, which was launched in 2017 as part of HKEX’s mutual market access programme with Mainland China, has helped drive international participation in China’s bond market.

Elsewhere, Swap Connect, which launched in May, has helped international investors tap the onshore RMB interest rate swap market. 

This latest development from HKEX follows the launch of Hong Kong Dollar (HKD)-Renminbi (RMB) dual counter model and a dual counter market making programme in its securities market – in a bid to expand trading of RMB-denominated Chinese stocks.

HKEX stated that it is now undertaking relevant preparations ahead of the launch of China treasury bond futures, with implementation details and an official launch date to be announced at a later stage.

“The launch of Treasury Bond Futures is an exciting new milestone that adds to HKEX’s expanding suite of China-related risk management tools, as well as our overall FIC offering, providing investors with even greater choice and opportunity,” said Nicolas Aguzin, chief executive of HKEX. 

“These unique new T-bond futures will help drive market liquidity and support the further development of Hong Kong’s RMB ecosystem, cementing the city’s role as the world’s leading offshore RMB hub. We look forward to working closely with the Securities and Futures Commission and all our partners to ensure the successful rollout of this exciting new risk management tool, as we connect China and the world.”

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Hong Kong Exchanges and Clearing Limited (HKEX) will launch its highly anticipated settlement acceleration platform for Stock Connect on Monday 9 October.

First announced back in 2020 the platform uses DAML smart contracts to standardise and streamline post-trade workflows, enhancing operational efficiencies and transparency whilst reducing settlement risks. 

HKEX said Synapse eliminates sequential processes, offering real-time visibility and insights into the settlement process for all market participants. Asset managers, brokers, custodians and clearing participants will benefit from real-time data synchronisation and improved scalability, helping them to handle the growing volume of trades through Northbound Stock Connect.  

Average daily turnover of Northbound Stock Connect totalled RMB109.3 billion ($15.2 billion) in the first half of 2023, up 5% from a year earlier, and a 50% increase from 2020 levels. 

“This technology-empowered platform will not only improve post-trade efficiencies, but will, over time, build a better, stronger ecosystem, supporting both market growth and investor growth strategies, said HKEX group head of emerging business and FIC, Glenda So. 

“We are very proud to be introducing Synapse to our market and we look forward to continuing to embrace new technologies that benefit our markets and our customers in the future.” 

Available as an optional service, HKEX Synapse will support institutional investors participating in Northbound Stock Connect to better manage their post-trade operations across different time zones, in particular with regard to adhering to the Mainland securities market’s T+0 settlement cycle.

HKEX Synapse will be linked with The Depository Trust & Clearing Corporation (DTCC) through its Institutional Trade Processing (ITP) service. With this integration, global investors and HKEX participants will benefit from the central matching of cross-border transactions using DTCC’s CTM service, which will automatically generate and send settlement instructions to the Synapse platform, streamlining the trade confirmation and settlement notification process.

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The Securities and Futures Commission (SFC) and the China Securities Regulatory Commission (CSRC) jointly proposed to introduce block trading through the China-Hong Kong Stock Connect scheme in a bid to create a mutual market access programme between the two jurisdictions.

The initiative to enhance Stock Connect, announced last Friday, will increase the amount of available trading mechanisms, enhance trading efficiency, and promote the development of both capital markets. The block trading arrangements are set to be based on existing operational models and regulations.

Julia Leung, chief executive of the SFC, described the importance of block trading as a mechanism for best execution in large sized transactions, as well as stressing its effect on minimising price impacts on the market. “This initiative will enhance the price discovery functions of both markets and encourage more overseas investors to participate in the A-share market through Stock Connect,” she added.

Stock Connect will enable both southbound and northbound investors to participate. The exchanges and clearing houses on both sides will be supervised by the CSRC and the SFC, including the technical and regulatory arrangements.

The respective stock exchanges are set to announce the operational details and official launch dates in due course.

The Hong Kong exchange (HKEX) launched the Shanghai-Hong Kong Stock Connect programme back in 2014, expanding with the launch of Shenzhen Connect in 2016, and the more recent launch of Bond Connect in 2017. 

In an announcement, HKEX welcomed the proposals from regulators. Wilfred Yiu co-chief operating officer and head of equities at HKEX, said: “The launch of block trading is the latest significant enhancement to the Connect franchise, providing price and execution certainty for large-sized deals that will help further enhance trading efficiency. This will support the continued growth and development of this exclusive mutual market access platform, offering more choice and more liquidity.

“We look forward to working closely with our partners to prepare for this rollout, as well as on other Connect-related enhancements, as we connect China and the world.”

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The move comes as part of HKEX’s efforts to enable mainland investors to trade RMB stocks listed in Hong Kong using their onshore RMB.

Following the launch, 24 Hong Kong-listed companies will trade and transact as dual counter securities, offering HKD as well as RMB counters.

Nine exchange participants have also joined the dual counter market making programme as market makers.

All shares of the same securities in the two trading counters will be completely interchangeable between counters, according to HKEX.

“The ongoing internationalisation of the RMB will be one of the defining characteristics of global markets in the next decade, and at HKEX we are delighted to today be taking another step forward in building a liquid and accessible RMB ecosystem,” said Nicolas Aguzin, chief executive of HKEX.

“The launch of the dual counter initiative is the latest in our broad suite of RMB products, providing investors with more choice and companies with another channel to tap the Hong Kong offshore RMB pool.”

Designated shares listed in HKD and RMB counters are able to trade at settle in RMB or HKD under the new model. According to HKEX, dual counter market makers for eligible shares offer continuous buy and sell quotes for securities in the RMB counter, providing liquidity for HKD-RMB dual counter trading, alongside minimising price discrepancies between the two counters.

HKEX’s new model will support the next phase of development to allow investors in Mainland China to trade Hong Kong-listed RMB securities through Southbound Stock Connect – the mutual market access programme between the capital markets of mainland China and Hong Kong.

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As part of the role, Loong will oversee the development of the digital assets ecosystem in HKEX’s markets, including digital product offerings and building digital infrastructure.

He will report to Glenda So, group head of emerging business & FIC, and succeeds Andrew Walton, who will leave HKEX in July.

Loong brings more than two decades’ worth of experience serving at major banks and financial institutions, with expertise in the digital assets and fixed income market space.

Previously, Loong served as head of security token offering structuring at BC Technology Group and most recently, oversaw digital asset product and operation development at a Singapore-based digital family office.

“We are very pleased to welcome Andrew to HKEX. He brings to us unique skillsets in the financial and legal sectors and has a wealth of experience driving digital assets and asset management platform strategies,” said So.

“His expertise will be invaluable to HKEX as we continue to grow our footprint in the digital assets space, harnessing the potentials of emerging megatrends and connecting today and tomorrow.”

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Fenics GO is integrated with Eurex workflow and allows traders to anonymously access and interact with block liquidity in futures and options for processing of cleared derivatives trades.

In addition to trading, the platform also provides market data related to the execution of exchange-listed futures and options.

The firm said the inclusion of HKEX derivatives products would significantly expand to its ability to arrange block trades in an “efficient and compliant” way.

Jean-Pierre Aubin, co-global head of brokerage at BGC and chief executive of Fenics GO, highlighted the business’ commitment to the electronic evolution of the derivative markets.

Wilfred Yiu, co-chief operating officer and head of equities at HKEX, echoed this: “The use of this accessible and efficient technology platform will support the continued development of our markets, offering customers around the world better choice and promoting transparency, market compliance and auditability.”

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