Five Hong Kong Brokers Spearhead Fidessa’s ‘China Connect’ Link
Wednesday,13/08/2014|18:06GMTby
George Tchetvertakov
A new partnership between Hong Kong and China, governed by Fidessa, could potentially succeed in liberalizing the heavily restricted Chinese stock market. A journey of a thousand miles starts with a single step.
Fidessa Group Plc., has announced that five Hong Kong-based brokers will be the first participants in a new technological venture linking stock markets on the Chinese mainland with their counterparts in Hong Kong. The brokers cited so far are ICBC International Securities Limited and Standard Chartered Securities (HK) Limited, with more likely to follow once the link is tested and launched later this year.
The link, dubbed ‘China Connect,’ is expected to go live sometime in October with functionality and stress testing to go ahead prior to the final launch. When fully operational, ‘China Connect’ will provide offshore investors with access to mainland China via the Hong Kong market, while mainland China-based investors will be able to access shares listed in Hong Kong via the Shanghai market. Overall, the venture is expected to create a combined market capitalization of $5.5 Trillion, according to data obtained from the World Federation of Exchanges (WFE). At present, the only overseas buyers who can invest directly into China's domestic markets are large institutional investment firms that have secured a quota from the government under China's QFII program.
Excited investors shouldn’t get too excited just yet. Some constraints, including quotas, holiday arrangements and trading restrictions will remain in place when the scheme finally gets launched in order to create a smooth transition with as few problems as possible. The gradual, soft approach reflects China’s insistence on liberalizing their markets slowly and sustainably. Access to the Chinese yuan currency is going through a similar gradual liberalization rather than a blanket lifting of restrictions overnight.
Testing Phase
Between August 11th and September 5th, 2014, securities brokers on the Chinese mainland will make simulated investments in 14 selected stocks listed on the Hong Kong Exchange. The tests will involve regular stock trading, clearing, trading suspension and adaptation tests. The Hong Kong Stock Exchange will then conduct tests for investing in Shanghai between August 23rd and September 13th. David Jenkins, Head of Product Marketing at Fidessa, was quoted as saying: "Implementing this link successfully involves additional technology infrastructure, as well as new tools and processes right across the front, middle and back office."
David Jenkins
It would appear that Fidessa is committed to this unique venture which has included a large amount of development work and customer consultations. According to Jenkins, this involved designing the right algorithms to cater for the wider spreads, transient Liquidity and Volatility associated with trading the Shanghai market.
The direct link is likely to lead to faster execution times and reduced trading costs which should be beneficial to investors both in Hong Kong and China. The aim is to achieve greater facilitation of cross-border flows between the two regions. However, some Asian exchanges have expressed concern at the proposed link between Shanghai and Hong Kong on the grounds that the link will divert foreign capital away from other developing Asian exchanges and concentrate most trading activity in China.
On a broader note, the ‘China Connect’ link is a practical test of how closely China and Hong Kong can collaborate given the arduous history the two regions share. China’s drive to reform and liberalize continues, albeit at a snail’s pace.
Fidessa Group Plc., has announced that five Hong Kong-based brokers will be the first participants in a new technological venture linking stock markets on the Chinese mainland with their counterparts in Hong Kong. The brokers cited so far are ICBC International Securities Limited and Standard Chartered Securities (HK) Limited, with more likely to follow once the link is tested and launched later this year.
The link, dubbed ‘China Connect,’ is expected to go live sometime in October with functionality and stress testing to go ahead prior to the final launch. When fully operational, ‘China Connect’ will provide offshore investors with access to mainland China via the Hong Kong market, while mainland China-based investors will be able to access shares listed in Hong Kong via the Shanghai market. Overall, the venture is expected to create a combined market capitalization of $5.5 Trillion, according to data obtained from the World Federation of Exchanges (WFE). At present, the only overseas buyers who can invest directly into China's domestic markets are large institutional investment firms that have secured a quota from the government under China's QFII program.
Excited investors shouldn’t get too excited just yet. Some constraints, including quotas, holiday arrangements and trading restrictions will remain in place when the scheme finally gets launched in order to create a smooth transition with as few problems as possible. The gradual, soft approach reflects China’s insistence on liberalizing their markets slowly and sustainably. Access to the Chinese yuan currency is going through a similar gradual liberalization rather than a blanket lifting of restrictions overnight.
Testing Phase
Between August 11th and September 5th, 2014, securities brokers on the Chinese mainland will make simulated investments in 14 selected stocks listed on the Hong Kong Exchange. The tests will involve regular stock trading, clearing, trading suspension and adaptation tests. The Hong Kong Stock Exchange will then conduct tests for investing in Shanghai between August 23rd and September 13th. David Jenkins, Head of Product Marketing at Fidessa, was quoted as saying: "Implementing this link successfully involves additional technology infrastructure, as well as new tools and processes right across the front, middle and back office."
David Jenkins
It would appear that Fidessa is committed to this unique venture which has included a large amount of development work and customer consultations. According to Jenkins, this involved designing the right algorithms to cater for the wider spreads, transient Liquidity and Volatility associated with trading the Shanghai market.
The direct link is likely to lead to faster execution times and reduced trading costs which should be beneficial to investors both in Hong Kong and China. The aim is to achieve greater facilitation of cross-border flows between the two regions. However, some Asian exchanges have expressed concern at the proposed link between Shanghai and Hong Kong on the grounds that the link will divert foreign capital away from other developing Asian exchanges and concentrate most trading activity in China.
On a broader note, the ‘China Connect’ link is a practical test of how closely China and Hong Kong can collaborate given the arduous history the two regions share. China’s drive to reform and liberalize continues, albeit at a snail’s pace.
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In this conversation, we sit down with Drew Niv, CSO at ATFX Connect and one of the most influential figures in modern FX.
We speak about market structure, the institutional view on liquidity, and the sharp rise of prop trading, a sector Drew has been commenting on in recent months. Drew explains why he once dismissed prop trading, why his view changed, and what he now thinks the model means for brokers, clients and risk managers.
We explore subscription-fee dependency, the high reneging rate, and the long-term challenge: how brokers can build a more stable and honest version of the model. Drew also talks about the traffic advantage standalone prop firms have built and why brokers may still win in the long run if they take the right approach.
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A concise look at where compliance, onboarding, and AI-driven processes are heading next.
In this interview, Remonda Z. Kirketerp Møller, founder of Muinmos, breaks down the state of AI in regtech and what responsible adoption really looks like for brokers. We talk about rising fragmentation, the pressures around compliance accuracy, and why most firms are still in the early stages of AI maturity.
Ramanda also shares insights on regulator sandboxes, shifting expectations around accountability, and the current reality of MiCA licensing and passporting in Europe.
A concise look at where compliance, onboarding, and AI-driven processes are heading next.
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We start with Aydin’s view of the Summit and the challenges brokers face as fraud tactics grow more complex. He explains how firms can stay ahead through real-time signals, data patterns, and early-stage detection.
We also talk about AI training and why compliance teams often struggle to keep models accurate, fair, and aligned with regulatory expectations. Aydin breaks down what “good” AI training looks like inside a financial environment, including the importance of clean data, domain expertise, and human oversight.
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Read the article at: https://www.financemagnates.com/thought-leadership/exness-expands-its-presence-in-africa-inside-our-interview-with-paul-margarites/
#exness #financemagnates #exnesstrading #CFDtrading #tradeonline #africanews #capetown
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Read the article at: https://www.financemagnates.com/thought-leadership/exness-expands-its-presence-in-africa-inside-our-interview-with-paul-margarites/
#exness #financemagnates #exnesstrading #CFDtrading #tradeonline #africanews #capetown
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Builder | Adviser | Fintech Writer | Product Strategist
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We also explore what stablecoin adoption might look like for retail investment platforms, including a few product and UX angles that are not obvious at first glance.
To close, Jas explains how he thinks about writing, and how he approaches “shipping” pieces that spark debate across the industry.
Interview with Jas Shah
Builder | Adviser | Fintech Writer | Product Strategist
In this episode, Jonathan Fine sat down with Jas Shah, one of the most thoughtful voices in global fintech. Known for his work across advisory, product, stablecoins, and his widely read writing, Jas brings a rare combination of industry insight and plain-spoken clarity.
We talk about his first impression of the Summit, the projects that keep him busy today, and how they connect to the stablecoin panel he joined. Jas shares his view on the link between fintech, wealthtech and retail brokers, especially as firms like Revolut, eToro and Trading212 blur long-standing lines in the market.
We also explore what stablecoin adoption might look like for retail investment platforms, including a few product and UX angles that are not obvious at first glance.
To close, Jas explains how he thinks about writing, and how he approaches “shipping” pieces that spark debate across the industry.
