Hong Kong Exchanges and Clearing Limited (HKEX) has revealed plans to digitize and automate the in-kind creation and redemption process for related exchange-traded products (ETPs) in 2025 through the adoption of an online platform, subject to technical readiness and regulatory approval.
This platform will be integrated into the ETP creation and redemption process, connecting key ETP participants using distributed ledger technology (DLT) and smart contracts, and will contribute to increasing the overall efficiency of the ETP market, supporting the continued development of the secondary business market for ETPs.
HKEX head of tradable products Jean-Francois Mesnard-Sense said:
“Speed and efficiency are vital 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 lead to more liquidity in the product ecosystem, supporting the vibrancy of our ETP market and strengthening Hong Kong’s role as an international financial centre.”
HKEX has continued to support the development of the ETP market in recent years with measures such as the introduction of the ICSD ETF settlement model in Hong Kong in 2019, the implementation of a new margin table and a new continuous funding trading regime in 2020. as well as the inclusion of ETFs on Stock Connect in 2022.