Hong Kong Stock Exchange with cross-border marriage: will enter digital asset trading within three years

On September 11, the Hong Kong Stock Exchange suddenly announced that it intends to issue a merger proposal to the London Stock Exchange at a total price of 29.6 billion pounds. The transaction mentioned in the merger document will be a digital asset transaction, which will be implemented in the next two or three years according to the planning of the Hong Kong Stock Exchange.

Subsequently, the London Stock Exchange issued a statement saying that it has noticed that the Hong Kong Stock Exchange has offered a preliminary, "highly conditional" share purchase plan. The board of directors of the Stock Exchange Group will consider the program and publish further information in due course.

As of the end of 2018, the total market value of listed companies traded on the Hong Kong Stock Exchange was 3.82 trillion US dollars, and the total market value of listed companies listed on the Stock Exchange was 3.64 trillion US dollars. If the acquisition is finally completed, it will build a larger exchange group, which is comparable to the Chicago Board of Trade in the United States and the NYSE parent company Intercontinental Exchange.

Li Xiaojia, chief executive of the Hong Kong Stock Exchange Group, has made it clear that there will be new exchanges and new trading models in the 5G era. Blockchain, encryption technology, etc. will help large-scale transactions of data between different entities.

Explore blockchain and enter digital asset trading

Since taking office in 2009, Li Xiaojia has drastically implemented reforms on the Hong Kong Stock Exchange, and implemented mechanisms such as “Shanghai-Hong Kong Stock Connect”, “Shenzhen-Hong Kong Stock Connect” and “Different Rights in the Same Shares”.

At the same time, Li Xiaojia is also optimistic about the digital currency.

In March of this year, Li Xiaojia delivered a speech entitled “The Distance and Nearness of Data and Capital” at the 2019 China (Shenzhen) IT Leaders Summit. Li Xiaojia believes that the use of blockchain technology can completely solve the data identification, pricing, deposit, credit and traceability. In particular, traceability, based on blockchain technology, allows data owners' interests to be returned to data owners after several years.

Li Xiaojia's picture comes from the network

In addition, Strategic Planning 2019-2021 also mentioned that in the strategy of embracing technology, it is necessary to flexibly utilize new technologies, including artificial intelligence, blockchain, cloud computing infrastructure and data analysis, after the transaction of Shanghai-Shenzhen-Hong Kong Stock Connect. Application blockchain technology in distribution.

On the evening of September 10, the Hong Kong-listed company Tongcheng Holdings, which was acquired by the founder of the fire coin, announced that it would rename the Chinese name to “Fire Technology Holdings Limited” and the English name to “Huobi Technology Holdings Limited”. Li Lin, the founder of the Firecoin Group, is the executive director, chairman of the board and chief executive officer of Tongcheng Holdings.

Partner of Randy Law Firm, founder of the Green Lion chain, Zhou Yuchao told Zinc Link that Hong Kong's RTO (backdoor listing) standard is basically the same as IPO, and it has to disclose a lot of information, and it will last long after the assets are divested. time.

In August last year, the fire coin has become the actual controller of Tongcheng Holdings, and is gradually loading the assets of the Firecoin Group.

Zhou Wuchao believes that whether it is RTO or IPO, Hong Kong's supervision and the Stock Exchange are mainly concerned with the compliance and quality of the business itself. From this perspective, the digital currency exchange is a legally compliant and licensed company operating abroad, and the law itself has a compliance path. In terms of business, it will be more stable and mature than mining companies.

In November 2018, the Hong Kong Securities Regulatory Commission announced new rules for virtual assets. The Chief Executive of the Hong Kong Securities Regulatory Commission, Ou Dali, revealed: First, virtual currency-related funds and sales platforms can only be sold to professional investors and need to be registered with the Hong Kong Securities Regulatory Commission. Second, after the feasibility of the sandbox test is verified, the Hong Kong Securities and Futures Commission may issue a license to the cryptocurrency exchange.

If the regulations are implemented smoothly, Hong Kong may be the first to attract a large number of virtual currency resources in Asia, including high-quality resources such as head exchanges, public links and project parties. This move will also play a demonstration role of “breaking the ice” at the regulatory level, accelerating the maturity of the virtual currency regulatory policy and the compliance operation of the industry.

HKEx wants to become the world's leading Asian time zone exchange, connecting China and the world. On the one hand, it increases the international influence of the HKEx on the Chinese and Asian markets, and on the other hand it becomes the preferred market for investors and issuers in the Asian time zone.

"If successful, it will create a leading international exchange group, standing in the global capital market." Li Xiaojia said.

Not the best time, but it has been brewing for a long time

At this time, the merger was proposed. Li Xiaojia said frankly that under the circumstances that the international situation is full of uncertainty, it may not be the best time to carry out huge cross-border transactions, and the reality before us is that it is not waiting.

According to the Caixin report, senior market participants pointed out that because the Exchange intends to acquire information service provider Refinitiv, once the transaction is successful, the exchange will be too large, and the merger in the Hong Kong Stock Exchange is undoubtedly undoubtedly Will become difficult to achieve. Although the London Stock Exchange had previously expected that the acquisition of the Lufite deal would not be completed by 2020, an extraordinary general meeting would be held in the fourth quarter of this year. According to the relevant rules, it takes only 14 days to meet once the notice of the general meeting is issued.

Therefore, the HKEx is not waiting for it. It must propose its own plan before the fourth quarter to make its acquisition proposal more competitive and give itself more time.

In fact, the acquisition of the Stock Exchange is an important step for the HKEx to implement the “connected global” strategy and an attempt to comprehensively enhance its service functions.

Shi Meilun, chairman of the Hong Kong Stock Exchange Group, said in an interview with Caixin that the arrangement has been brewing for a long time, at least in September last year, it has taken shape and eventually won the support of all directors.

All of this has already been revealed in the Strategic Plan 2019-2021 announced by the Hong Kong Stock Exchange in February this year.

The plan proposes three main themes: based in China, connecting the world, and embracing technology.

Li Xiaojia said that these three major themes seem to be independent, but in fact they complement each other and depend on each other. If you think of the business of the Hong Kong Stock Exchange as an airplane, the two engines of the aircraft's wings will be indispensable based on China and connecting the world. Hug technology is a new type of fuel for the aircraft, which can fly higher and faster. ,farther.

“Our strategic planning is always based on the three core elements of money (funds), goods (products), and fields (functions): we must serve the 'money' and 'by constantly improving the 'field' function. The goods 'two major customers.' Li Xiaojia said.

In order to serve the two customers of "money" and "goods", HKEx is working hard to comprehensively enhance the function of "field": in addition to increasing the service content and providing the function of the transit market, "field" not only has a specialty store (listed company), but also There will be more and more department stores (ETF products). “We not only have to set up a 'field' in Hong Kong, but also to explore the function of expanding the 'field' in London and other parts of the world."

In an interview with Caixin, Shi Meilun said that if the merger is successful, it will help to strengthen and expand the Chinese capital market, and will have a positive impact on market opening. The future exchanges between the Hong Kong Stock Exchange and the Shanghai and Shenzhen Stock Exchanges will also play a better synergy. Effect, have a greater space for collaborative imagination.

Second, the Hong Kong Stock Exchange became the vanguard of the internationalization of the renminbi.

Li Xiaojia publicly stated that this transaction can provide a convenient and efficient financial platform for the integration of RMB-denominated financial assets into the international financial market.

Mergers and acquisitions, layout of digital assets… Behind a series of actions is the determination of the HKEx to go international, and it is also the most ambitious determination in recent years. It is not easy to achieve. However, when these goals are realized in the future, they will change the entire capital market.

Text: Zhao Xuejiao
Source: Zinc Link