A landmark step-forward in directly connecting China’s investment market to international investors and a reflection of ongoing appetite for cross-border investments.
Calastone, the global fund transaction network, today announced the establishment of direct connectivity with Shenzhen Securities Communications Co. (SSCC) a fully-owned subsidiary of the Shenzhen Stock Exchange. This represents another 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.
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“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, the CEO for the SSCC said, “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. With their impressive coverage of global funds managers and distributors, Calastone is an essential actor in global fund messaging and a strong partner for the further expansion of the MRF program.”
Chaker added, “The ongoing trend of China’s financial markets liberalisation highlights the importance of ensuring consistent and cost-efficient fund order processing. Calastone’s goal is to simplify domestic and cross-border distribution of funds between fund managers and distributors conducting trades, regardless of geography and fund domicile.”