Horizon Trading Solutions, the global electronic trading and algorithmic technology solutions provider, has partnered with China Merchants Securities (HK), a leading Chinese investment bank, to deliver market-making solutions for the newly launched Virtual Asset (VA) Spot Exchange-Traded Funds (ETFs) on the Hong Kong Exchange (HKEX).
The VA Spot ETFs, introduced on HKEX in April 2024, offer regulated exposure to Bitcoin and Ether, the two largest cryptocurrencies, under the oversight of Hong Kong’s Securities and Futures Commission. China Merchants Securities (HK) is among the first to provide liquidity for the Harvest Bitcoin Spot ETF and Harvest Ether Spot ETF, both managed by Harvest Global Investments, which oversees assets exceeding USD 200 billion.
Horizon was selected for its expertise in market-making solutions, implementing a tailored system that leverages HKEX’s colocation services through its Managed & Hosted Services model.
“We see significant dynamism in the region, particularly in Hong Kong,” Sylvain Thieullent, Horizon’s CEO, tells TradingTech Insight. “Over recent months, Hong Kong has become increasingly attractive, which might seem counterintuitive given the concerns surrounding China’s influence and what Hong Kong’s future as a financial hub might look like compared to other centres like Singapore and Shanghai. However, our experience has shown strong momentum in the region. Interestingly, it’s not just Western banks that are active—local players are equally engaged. Although referring to China Merchants Securities as a ‘local player’ might not be entirely accurate given their scale, they are primarily based in China, Hong Kong, and North Asia. And it’s important to note that this is a pan-regional setup involving both Hong Kong and Singapore, reflecting our broader capabilities across the region. This perspective gives a good sense of the kinds of deals we’re signing and the opportunities we see in this market.”
The platform includes 24/5 global support and real-time monitoring tools to ensure compliance with trading obligations, including spread and quote management. Horizon’s technology is designed to handle market volatility and ensure efficient liquidity provision, with deployment set for completion within two months.
“This is a perfect example of bringing together ETFs and the digital asset world—a significant step toward the convergence of traditional finance (TradFi) and decentralized finance (DeFi),” says Thieullent. “ETFs are, of course, a highly dynamic and straightforward instrument for gaining exposure to a wide variety of assets. At the same time, digital assets represent an entirely distinct and evolving space. So, it’s not just about ETFs or digital assets alone; it’s also about liquidity provision and market-making across a broad spectrum.”
He continues: “We’ve developed a deep expertise in this area, which varies greatly from one asset class to another, from one market culture to another, and from one regulatory framework to another. Our focus is on how to effectively animate the market and provide liquidity, making the market not only attractive from an investment perspective but also fair and fully compliant with regulatory requirements. We strive to adopt best practices for both price takers and price makers, and that’s truly where our expertise lies.”
Patrick Shum, Head of Global Markets Department, China Merchants Securities (HK), comments: “We are excited to be one of the first market makers for Asia’s VA spot ETFs. Collaborating with Horizon allows us to leverage their cutting-edge technology and responsive support, ensuring we can provide the liquidity and efficiency our investors expect in this rapidly growing asset class.”
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