Dion Global Adds to NOVA to Cater to Hong Kong-Shanghai Financial Trading

Dion Global, a leading clearing and settlement provider for global financial markets has enhanced its coverage to cater to the forthcoming Shanghai-Hong Kong trading connector that aims to bolster China’s financial trading environment. The new module on NOVA, will function in accordance with regulatory guidelines issued by the country’s watchdog to facilitate the purchase and sale of equities. The new partnership between the two financial centres highlights the potential of China as an investment hub for overseas investors.

Dion’s benchmark post trade platform, NOVA, has enhanced its coverage to facilitate trading in Hong Kong and Shanghai financial instruments. The listed technology firm has launched a new module within its NOVA suite to support the Shanghai–Hong Kong Stock Connect scheme. The vendor has reported the advancements as the Shanghai-Hong Kong Stock Connect programme is scheduled to commence in mid-October this year.

The new module in NOVA, Dion’s clearing and settlement solution for both retail and institutional firms supports Shanghai-Hong Kong Stock Connect and enables the processing of cross-border trades made by Hong Kong brokers on the Shanghai Stock Exchange . It addresses the key differences between the two exchanges, including the process changes required to handle multiple market Execution feeds and the difference in trade processing times, while resolving the differences in report formats.

Joe Nash, pictured, Managing Director - Asia, Dion commented in a statement, he said: “Shanghai-Hong Kong Stock Connect is a key development for China’s mainland global financial integration.

Dion has been working with brokers in Hong Kong for almost 20 years, providing solutions that not only satisfy local requirements, but also enable firms to trade in regional and global markets. Over this time, China has become an economic giant and we see the Stock Connect programme as a significant leap in China’s efforts to expand its domestic equity market.”

Liberalising Chinese Financial Markets

The new partnership is expected to create positive shock-waves in the world’s most populous nations, for the first time it will allow people in mainland China to invest in foreign stocks and allow foreign investors to buy stocks in the Shanghai Stock Exchange through Hong Kong brokerage accounts, which are subject to an annual quota. This is a significant step in the development of China’s capital markets and its attempts to integrate further with the global financial community.

Nash continues, “The new NOVA module allows our clients in Hong Kong to process all Shanghai-Hong Kong cross-border trades seamlessly, complying with all the regulatory requirements in both regions.”

China has gradually been opening its trading arena, certain institutional investors have been granted refuge under the Qualified Foreign Institutional Investor program (QFII), an initiative where Beijing hopes to internationalise the market.