The Hong Kong Stock Exchange (HKEX) has revealed its plan to launch a blockchain technology based private market in order to support smaller sized companies obtain financing.
Charles Li, Chief Executive of Hong Kong Exchanges and Clearing (HKEX), detailed the plan which would engage in a separate venture called the “HKEX Private Market”. The new venture is designed to offer early stage firms as well as their traders with a share registration and then move platform based upon blockchain technology.
The disclosure started as a result of a question regarding tapping local technology assets – and if Hong Kong is ready to take action. Although the exact date of the launching has not yet been revealed, Li declared that the particular platform would start off at some time in the year 2018.
“The Private Market will serve as a ‘nursery’ for early stage companies before they are ready to enter public markets,” Charles Li said. “They can conduct pre-IPO financing and other activities on an off-exchange venue not under the regulatory remit of the Securities and Futures Ordinance,” he added.
The particular announcement in the blockchain-powered venture was initially revealed in January this year 2017 in the HKEX yearly media luncheon. Li said during that time (as cited by Enterprise Innovation):
“We want to use this private market to attract all early-stage companies to register and to put them into HKEX’s private market system. The Hong Kong private market is going to be blockchain technology-enabled.”
HKEX has long been eyeing on the blockchain technology in order to upscale its operation, as reported in the past. A few months ago, in a media event, Li revealed a 3 to 4 year plan in order to keep costs down at the exchange, that could eventually go on to incorporate the technology into its post-trade platforms.
Hong Kong’s central bank also has examined the technology, revealing that it had already been testing an electronic currency last April together with a number of unnamed banks as well as distributed ledger start-up R3.