Cross-border stock market links in Asia: What makes one a success?
To generate more capital flows, greater liquidity and investment opportunities, stock markets in Asia are beginning to embrace the idea of cross-border stock market links such as the Hong Kong-Shanghai Connect, the ASEAN Exchanges, and the recently announced Taiwan-Singapore Stock Trading Link. These links might be understood as variants of the hub and spoke model to streamline the convoluted spaghetti flows of cross-border trades, but a closer examination reveals differences in the operating models for the underlying trading, clearing and settlement operations. This talk will discuss the various operating models for cross-border trading links in Asia. What are the relevant technological, market, and institutional conditions that might determine the variations in these operating models? What are the related challenges that need to be tackled to make such cross-border market collaborations successful?