As confirmed in the announcement, Swap Connect will launch on 15 May 2023. Starting initially with a Northbound channel, the programme will give Hong Kong and international investors access to Mainland China's interbank financial derivatives market through a connection between financial infrastructure institutions in the Hong Kong and Mainland China markets.
HKEX, through its clearing subsidiary OTC Clear, has been working with China Foreign Exchange Trade System (CFETS) and Shanghai Clearing House (SHCH) to develop the underlying infrastructure for Swap Connect and will facilitate the delivery and operation of the programme.
Executives from HKEX said that Swap Connect is a new chapter in their Connect story. As a derivatives mutual market access programme, it will help forge stronger connectivity between Hong Kong and Mainland's capital markets, further supporting their mutual development and strengthening Hong Kong's role as an international financial centre. They look forward to working with their Mainland partners and all their regional and international market participants to ensuring the successful rollout of Swap Connect, as they connect China and the world.
Under Swap Connect, CFETS and overseas electronic trading platforms recognised by the PBOC will jointly provide trading services for Hong Kong and international investors. The programme will give access to interest rate swaps at the initial stage, which will be priced, settled, and cleared in Renminbi.
OTC Clear and SHCH will jointly provide clearing and settlement services through a central counterparties link, with OTC Clear providing central clearing services for Hong Kong and international investors, while SHCH will provide central clearing services for investors in Mainland China.
OTC Clear is an SFC-recognised clearing house and an internationally-recognised qualifying central counterparty that provides clearing and settlement services for OTC derivative transactions.
Hong Kong Exchanges and Clearing Limited (HKEX) is a publicly-traded company and one of the global exchange groups, offering a range of equity, derivative, commodity, fixed income, and other financial markets, products and services, including the London Metal Exchange.
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