HKEx’s OTC Clear adds cross currency swaps clearing

HKEx launched its clearing service for USD/CNH clearing on Monday this week.

The Hong Kong Stock Exchange’s (HKEx) OTC Clear subsidiary has launched a clearing service for cross currency swaps (CCS).

HKEx said OTC Clear is among the first international clearing house to provide clearing services for US dollar and offshore Renminibi.

It currently has 12 clearing members, six of which are Hong Kong subsidiaries or branches of Chinese banks, with other institutions working on clearing membership agreements.

Chief executive at HKEx, Charles Li, explained fixed income and currency market participants face increasing challenges with regulation and capital pressures when trading.

Li added “central clearing via a well-capitalised, internationally recognised clearing house,” can help ‘alleviate’ the pressures.

The service launched on Monday, with several transactions already submitted to OTC Clear via MarkitSERV, IHS Markit’s trading platform.

HKEx said a total aggregate notional value of $120 million was cleared on the first day of the launch this week.