HKEX to launch OTC client clearing

HKEX will launch the service ahead of the 1 July clearing mandate for OTC derivatives.

Hong Kong Exchanges and Clearing (HKEX) clearing house for OTC derivatives, OTC Clear, has launched a new client clearing service.

The launch comes ahead of the first phase of mandatory clearing in Hong Kong on 1 July.

It will allow banks that are members of OTC Clear to clear derivatives trades for buy-side clients that are not directly connected to the clearing house.

OTC Clear has also received approval from the Securities and Futures Commission (SFC) to accept certain types of high-quality, non-cash collateral to satisfy their margin requirements. This includes US Treasuries, Hong Kong Exchange Bills and Notes, and Chinese offshore bonds.

“Members will benefit from an increase in clearable trades as our potential customer base is now much larger.  We see client clearing as a good new business opportunity for Members given the advantages of central clearing for financial institutions,” said Calvin Tai, head of clearing, HKEX.