Calastone Connects China-Hong Kong Markets with Direct Connectivity to SSCC

Calastone, a financial technology company which connects trading partners via its global fund transaction network, today announced the establishment of direct connectivity with Shenzhen Securities Communications (SSCC), a fully-owned subsidiary of the Shenzhen Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term.

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Connecting China and Hong Kong

The move is a step forward in connecting China and Hong Kong investment markets to facilitate north and southbound cross-border fund transactions.

Calastone is the first financial technology firm that can offer direct SSCC connectivity to financial institutions in Hong Kong participating in the China-Hong Kong Mutual Recognition of Funds (MRF) program, including fund managers, distributors, custodians and fund administrators.

Commenting on the partnership, Sebastien Chaker, Head of Asia for Calastone, said: “We have been supporting fund managers and distributors in processing trades since the launch of MRF but, like all market participants, were required to route these trades through multiple parties.

Financial institutions in Hong Kong participating in the MRF program now have a wider set of order processing channel options.

Chaker explained that the new, direct connectivity means that financial institutions in Hong Kong participating in the MRF program now have a wider set of order processing channel options, with the potential to lower costs. Clients will be able to use their existing network connection to Calastone to submit and receive fund orders to and from China under the MRF program.

Calastone will take care of any formatting requirements and submit orders directly to the SSCC, reducing time, costs and complexity by eliminating the need to conform to different messaging and connectivity standards.

YuanQun, SSCC CEO, added: “We are pleased to partner with Calastone and to introduce an additional cross-border trade processing connection to the SSCC. As interest in international fund investment continues to increase, we see the availability of electronic trade channel options will only help to support the rise of trade volume between China and Hong Kong.”

The continuing trend of China’s financial markets liberalisation illustrates the importance of ensuring consistent and cost-efficient fund order processing. Calastone aims to simplify domestic and cross-border distribution of funds between fund managers and distributors conducting trades, irrespective of geography and fund domicile.