Hong Kong Exchange Plans Private Market

Blockchain, FinTech, Innovation, Investing, Regulation | August 2, 2017 By:

The Hong Kong Stock Exchange (HKEX) is planning to launch a new blockchain-based private market for early-stage companies.

The HKEX Private Market, which is set for launch in 2018, will provide early-stage companies with a blockchain-based share registration and transfer platform for pre-IPO financing off-exchange, clear of the regulatory remit of the Securities and Futures Ordinance.

HKEX chief Charles Li said the new private market will aim to create a supportive ecosystem in Hong Kong for early-stage startups and their investors. It will serve as a “nursery” for early-stage companies before they are ready to enter public markets.

“Hong Kong has to find ways to change its DNA. These creative and new economy companies represent the future and we have to make Hong Kong a welcoming home for these companies and their investors from China and everywhere else,” said Li. “The key principle is to identify companies whose businesses are in sectors where people, rather than investment capital, are the key, and creativity, innovation, technology, intellectual property, and new ways of commerce in totality are the primary drivers for its growth and business successes.”

HKEX has been eyeing on the blockchain technology to upscale its operation. Earlier this year, HKEX mapped out a three-to-four year roadmap, during which the exchange would seek to both cut costs and reduce risk across its operations.