Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Monday) that its clearing subsidiary, OTC Clearing Hong Kong Limited (OTC Clear), will allow offshore investors to use China Government Bonds and Policy Bank Bonds held through Bond Connect as collateral for Northbound Swap Connect beginning 13 January 2025.
The new eligible collateral can be used to cover initial margin requirements of Northbound Swap Connect, providing greater flexibility to international investors and enhancing their capital efficiency. It will also help vitalise international investors' bond holdings in the China Interbank Bond Market, promoting the internationalisation of the RMB.
Swap Connect, which links the Hong Kong and Mainland China interbank interest rate swap markets, has seen smooth operations and steady growth in trading volume since its launch in May 2023, adding vibrancy to the region's financial markets.
As of the end of November 2024, a total of 71 overseas institutions have participated in Northbound Swap Connect. The average daily turnover of Swap Connect totalled RMB 18.2 billion in November 2024, up sharply from about RMB 3 billion in May 2023.
Further details related to this enhancement to Northbound Swap Connect will be updated on HKEX website in due time.
About HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company (HKEX Stock Code: 388) and one of the world's leading global exchange groups, offering a range of equity, derivative, commodity, fixed income and other financial markets, products and services, including the London Metal Exchange.
As a superconnector and gateway between East and West, HKEX facilitates the two-way flow of capital, ideas and dialogue between China and the rest of the world, through its pioneering Connect schemes, increasingly diversified product ecosystem and its deep, liquid and international markets.
HKEX is a purpose-led organisation which, across its business and through the work of HKEX Foundation, seeks to connect, promote and progress its markets and the communities it supports for the prosperity of all.
www.hkexgroup.com
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