Throughout a panel dialogue at Hong Kong Fintech Week 2024 on October 29 on the Asia World-Expo, the viewers heard concerning the vital position that monetary expertise is enjoying in international capital markets.
Elizabeth Wong, director and head of fintech unit, intermediaries, on the Securities and Futures Fee, described the Hong Kong regulators efforts in tokenisation. She stated: “The SFC has been putting an emphasis on the underlying strategy of tokenisation – the distributed ledger expertise (DLT). We need to present steerage and readability as extra conventional finance gamers experiment with tokenisation. We issued two circulars final 12 months on this.”
On October 28, the SFC introduced {that a} monetary establishment, and one of many Challenge Ensemble sandbox participant, had accomplished a first-of-its-kind simulation of the dealing and buying and selling strategy of a tokenised cash market fund (MMF) utilizing tokenised deposits (TD) throughout the sandbox surroundings.
Wong stated: “We’re transferring past proof of idea, and we wish to commercialisation of actual use circumstances within the capital markets. You must determine the ache factors and take into consideration if blockchain could be a resolution. We have to take a look at the processes up till settlement for tokenisation. The underlying infrastructure is essential.’
New economic system
Wilfred Yiu, deputy chief govt officer, co-chief working officer and co-head of markets, Hong Kong Inventory Alternate (HKEX), famous that a number of reforms since 2018 have modified the DNA of the Hong Kong market, similar to Chapter 18C for biotech companies and tech companies, which means a shift away from extra conventional companies, similar to oil or monetary companies, over the past 5 – 6 years.
Yiu stated: “Within the final couple of years, over 65% of fundraisings on the HKEX have been within the new economic system. There have been greater than 300 new economic system firms itemizing right here elevating over HK$1 trillion ($128.7 billion), and lots of are additionally interconnected with mainland China through the Inventory Join.”
Yiu added: “The Higher Bay Space, together with in Shenzhen, is providing a number of tech enlargement alternatives. Our capital markets have gotten extra thrilling and a really vibrant market is growing, from incubation to improvement phases. We want the flexibility to have capital formation and renewable vitality is one other sector.”
Explaining how expertise may also help improve the event of the capital markets, Yiu stated: “We’re trying on the applied sciences that may assist ache factors. For instance, within the shortening of our IPO cycles we launched Fini (Quick Interface for New Issuance) – a public cloud kind resolution. We’re additionally good financing options to optimise settlement efficieincy. We now have additionally been utilizing synthetic intelligence (AI) for the final 4 years. We try to construct one thing throughout the lifecycle of buying and selling that’s match for the longer term.”
Europe, entrepreneurs and exchanges
Javier Hernani, head of securities companies and member of the chief board, at SIX, stated that in Europe they had been creating an infrastructure to encourage entrepreneurs, though he admitted total there’s “a number of discuss however not sufficient motion”.
Hernani stated: “We need to handle the finance wants of various entrepreneurs throughout fintech, healthcare and many others. In Europe rather a lot stays within the arms of exchanges. We now have a pre-market phase for governance framework; a scale up sector; and a 3rd one which is the expansion phase. We need to assist the unicorns of the longer term. It takes time and is a long run. We have to create an environment and the options for change.”
Commenting on the kinds of expertise out there to exchanges, he stated that AI is at the moment an important, whereas additionally recognising the potential of quantum compitong.
He stated they’re utilizing AI for settlement and using laws. Hernani commented: “AI actually helps us for this. The massive, massive problem is post-trade, cross-border funding, proxy voting info and many others. how will we make that extra environment friendly – and we believed that fintechs and AI may assist.”
Hernani continued: “Digitalisation shouldn’t be serving to the fragmentation of the post-trade cycle. That could be a actual drawback that wants a greater resolution and a bridge to be constructed.”
The panel was chaired by Ryan Li, a Hong Kong-based reporter at FinanceAsia. FA is a media companion to Hong Kong Fintech Week 2024 which was attended by 1000’s of individuals throughout October 28 and October 29.
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