HKEx plans to digitalize its ETP business through its online platform
AInvestTuesday, Nov 5, 2024 5:50 am ET
1min read
CET --

The Stock Exchange of Hong Kong today announced its plan to digitalize and automate the physical subscription and redemption mechanism of exchange-traded products (ETPs) through its online platform in 2025, subject to system readiness and regulatory approval.The platform will integrate the subscription and redemption mechanism of ETPs in the primary market and connect major ETP market participants through distributed ledger technology (DLT) and smart contracts to enhance the overall efficiency of the ETP market and drive its secondary market activities.Jean-Francois Mesnard-Sense, Head of Exchange-Traded Products at HKEX, said: "In a dynamic and volatile market environment, speed and efficiency are crucial. ETPs are one of the fastest-growing products under HKEX. Digitalization not only simplifies the operational process of market participants but also enhances the liquidity and vitality of the product ecosystem and the ETP market, solidifying Hong Kong's status as an international financial center."The optimization is part of the Group's continuous efforts to enhance the attractiveness and competitiveness of its ETP ecosystem, aiming to replace some manual and paper-based operations and streamline the subscription and redemption process of ETPs to drive market activities.HKEX has been actively promoting the development of the ETP market in recent years, with corresponding measures including the adoption of the International Central Securities Depository (ICSD) settlement model in Hong Kong in 2019, the implementation of new price tables and new continuous quotation obligations in 2020, and the inclusion of ETFs in the cross-border trading scheme in 2022.Since 2020, HKEX's ETP business has grown by 29% annually, with an average daily turnover of HK$17.9 billion in the first ten months of 2024, breaking the full-year amount in 2023 and setting a new high. As of the end of October 2024, there are 194 ETPs listed on HKEX, with 26 issuers participating in them.

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