HKEX to Digitalise ETP Servicing Capabilities with Online Platform
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Tuesday) plans to digitise and automate the in-kind creation and redemption process for relevant exchange-traded products (ETP) in 2025 through the adoption of a web-based platform, subject to technical readiness and regulatory approval.
This platform will be integrated into the ETP creation and redemption process, connecting key ETP participants with the use of Distributed Ledger Technology (DLT) and smart contracts, and will help increase overall ETP market efficiency, supporting the continued growth of secondary market activity for ETPs.
HKEX's Head of Exchange Traded Products, Jean-Francois Mesnard-Sense, said: “Speed and efficiency are critical in an increasingly dynamic market environment. With ETP being one of our fastest-growing products, HKEX is pleased to introduce this new digital enhancement. It will not only streamline operations for our market participants, but also drive more liquidity in the product ecosystem, supporting the vibrancy of our ETP marketplace and strengthening Hong Kong's role as an international financial centre.”
This latest enhancement is part of the Group's ongoing commitment to further elevate the attractiveness and competitiveness of its international ETP ecosystem, replacing several manual, paper-based processes currently present with a goal to simplify the creation and redemption procedures of ETPs and boost market activity.
HKEX has continued to support the development of the ETP market in recent years with measures including the introduction of the ICSD ETF settlement model in Hong Kong in 2019, the implementation of a new spread table and a new continuous quoting market-making regime in 2020, as well as the inclusion of ETFs in Stock Connect in 2022.
Since 2020, HKEX's ETP business has grown 29 per cent a year, with average daily turnover reaching HK$17.9 billion in the first ten months of 2024, above the full-year ADT trading record set in 2023. As at the end of October 2024, there were 194 HKEX-listed ETPs and 26 issuers participating in Hong Kong’s ETP market.
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