Has it only been seven months?
Reflecting on the journey I have been on since stepping into the CEO role in March, I must admit that this job has turned out to be both more challenging and more enjoyable than I ever imagined.
In the past seven months, my colleagues and I have been very focused on delivering HKEX’s strategic imperatives.
I have also been actively sharing the HKEX story, highlighting the strengths of our financial markets through many speeches, media interviews, as well as multiple trips to Beijing, London, New York, Singapore, and more.
It has been incredibly fruitful for me as I connected with our clients, stakeholders and colleagues in Hong Kong and around the world, taking their feedback onboard and using their insights to shape some of our longer-term planning.
Seeing the optimism come back and the impact HKEX is making worldwide has also been very rewarding.
We’ve achieved significant milestones recently, including new records for turnover in the cash, ETF, and derivatives markets, the biggest IPO since 2021, and new heights for both Northbound and Southbound Connect.
But while the recent news has been exhilarating, we remain resolutely focused on being prepared for the future.
We’re dedicated to creating the conditions for success and building our long-term resilience. We’re channeling the spirit of the Olympic Games to go ‘faster, higher, and stronger – together.’
Enhancing the vibrancy of our markets is integral to this vision.
That means putting the right building blocks in place – and I see two.
The first is speed.
Market participants want to move more swiftly, trade faster and settle quicker – and competing exchanges around the world are responding.
The world has moved, or is in the process of moving, to shorter settlement cycles for cash equities.
The benefits are clear: switching to a shorter settlement cycle means trades are settled faster, helping investors get their money back quicker, making the market more liquid.
We want to now lead the discussion with our community on what is the right cycle for Hong Kong.
We are no strangers to leading with new infrastructure and developing new technology to advance and expand the possibilities for the whole market — our delivery of FINI last year and the launch of Stock Connect ten years ago demonstrate what is possible.
How we move forward on the settlement cycle issue, however, will be based on a collective decision by the whole Hong Kong market.
So I’m pleased to announce that we have also recently commissioned a white paper to be published in the first half of 2025 that we hope will spark discussion with our whole ecosystem on what settlement cycle is needed for Hong Kong.
It is our responsibility as a core financial market infrastructure to lead the conversation, engage with the whole community and ask important questions – such as What do we want to be?; What do we need to do?; How can we achieve consensus? – because these questions are critical to the long-term resilience of our markets, Hong Kong’s hard-won status as a leading IFC and the ecosystem that so many depend on.
And at the same time as leading a collective discussion about settlement, we will push forward with enhancing our systems, creating a next-generation clearing and settlement platform which, by the end of 2025, will make the technology underpinning HKEX’s cash market infrastructure T+1 ready.
The second building block for market vibrancy is efficiency.
Making our markets more efficient means getting our microstructure right, and we have also made significant progress on this front, launching the development of the Orion Derivatives Platform in April; enhancing Swap Connect in May; introducing a Treasury Shares programme and consulting the market on bid-ask spreads in June; expanding eligibility of ETFs in Connect in July; and introducing Severe Weather Trading in September.
The intense work we did with our entire stakeholder community on Severe Weather Trading ensures Hong Kong’s markets will remain operational and always available to regional and international investors during trading hours, whatever the weather, marking significant progress for what had been considered unrealistic just a few years ago.
Additionally, we are working with the Securities and Futures Commission and other market participants to find ways to reduce friction in our markets in a more timely and efficient manner.
We are working towards publishing the results of our consultation on bid-ask spreads and we are also exploring specific measures to further enhance the listing experience, including efficiency and regulatory support. Furthermore, we are planning to consult the market soon on price discovery reforms.
With so much happening, it’s an exciting time for Hong Kong and I’m optimistic about what we can achieve together.
The fruits of the efforts we are making are clearly having ripple effects around the world, but it’s our unwavering focus on the long-term and executing on the four pillars of our strategy that makes it all happen.
Now, with the right structure, platform and technology being put in place, I’m looking forward to going faster, reaching higher and growing stronger – together with all our stakeholders.
Working together, we can put Hong Kong in the vanguard for Asia and the world.
So, let’s start the conversation, face the future and create the conditions for progress – together.
Source: HKEX
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