Hong Kong Bourse to Double Clearing Capacity on Record Trading

Hong Kong Exchanges and Clearing Ltd. plans to double its stock clearing system capacity after daily trading rose to a record in April.

The company moved forward the upgrade to the end of July from the originally planned target of next year, it said. Clearing accounted for 36 percent of the exchange’s revenue in the first quarter.

HKEx reported record trading volume of HK$291.5 billion ($37.6 billion) on April 9, spurred by inflows via an exchange link with Shanghai. The exchange said at the time its systems had enough capacity to handle the inflows.

The existing clearing “capacity is about double what we experienced at the peak,” it said in an emailed statement Monday. “The current central clearing and settlement system has been in use for over 10 years.”

Frequency of electronic trading at the exchange has been rising, partly because brokers have increased use of algorithms, said Calvin Tai, the head of global clearing at the exchange.

“Instead of having one ticket coming in they just split it into multiple, multiple, multiple,” he said in a May 21 interview. “They just try to avoid price impact on their execution, because if a big order is coming, then probably you will see the price move.”

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