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HKEX to use smart contracts and DLT to automate ETP issuance and redemption
2024-11-06 04:53:25
Odaily News Hong Kong Exchanges and Clearing Limited (HKEX) has announced plans to automate the creation and redemption of some exchange-traded products (ETPs) by 2025. The new web-based platform will use distributed ledger technology and smart contracts and is subject to regulatory approval. The platform is designed to improve efficiency and encourage more secondary market activity. Jean-Francois Mesnard-Sense said: "In an increasingly dynamic market environment, speed and efficiency are of the utmost importance. HKEX is pleased to launch this new digital enhancement. It will not only streamline operations for our market participants, but also drive liquidity in the product ecosystem, support the vitality of our ETP market and strengthen Hong Kong's position as an international financial center." Although HKEX did not use the term "real-time", in theory an automated platform could support this. Given that stock exchanges are not retail-facing, it is usually market makers who trigger the creation and redemption process. HKEX did not disclose the technology used and had not commented at press time. HKEX's previous DLT activities for its HKEX Synapse settlement platform, which is expected to be launched in 2023, used Digital Asset's DAML and Canton. (Ledger Insights)