Participates in the breakdown of the egg envelope, which is derived from the egg extracellular matrix, at the time of hatching. Thus allowing the newly hatched fish to swim free. LCE solubilizes the egg envelope only after it has been swollen by the action of HCE. Hydrolysis of the inner layer of fish egg envelope. Also hydrolysis of casein and small molecule substrates such as succinyl-Leu-Leu-Val-Tyr-|-7-(4-methyl)coumarylamide. Binds 1 zinc ion per subunit. Stored as proenzymes in the zymogen granules. Production of the protein starts in day 2 to day 3 embryos and increases thereafter until hatching. In medaka the hatching enzyme system is composed of two distinct proteases, the high choriolytic enzyme (HCE), of which there are two isoforms, and the low choriolytic enzyme (LCE).