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May 5, 2023 - Hong Kong Exchanges and Clearing Limited (HKEX) announced a joint news release with the People's Bank of China (PBOC), Hong Kong Securities and Futures Commission (SFC) and Hong Kong Monetary Authority on the launch of Swap Connect, the new mutual access programme between Hong Kong and Mainland China's interbank interest rate swap markets.
Swap Connect will launch on 15 May 2023, starting initially with a Northbound channel. The programme will access to interest rate swaps at the initial stage, which will be priced, settled and cleared in Renminbi.
It will also provide 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.
HKEX Chief Executive Officer, Nicolas Aguzin, said: "Swap Connect is the latest chapter in our Connect story. As the world's first 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. We look forward to working with our Mainland partners and all our regional and international market participants to ensuring the successful rollout of Swap Connect, as we connect China and the world."e
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.
Please find a link to the joint announcement here: Joint Announcement of the People’s Bank of China, the Hong Kong Securities and Futures Commission and the Hong Kong Monetary Authority
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