OTC Clearing Hong Kong (OTC Clear) said the soft launch of its business passed without incident on Monday.
OTC Clear’s first cleared trade was a non-deliverable RMB 7-day repo. Other cleared transactions included a US$/RMB non-deliverable foreign exchange forward deal and a HK$ interest rate swap. The total value of the transactions processed yesterday by OTC Clear was approximately HK$304 million.
OTC Clear offers clearing services for inter-dealer interest rate swaps denominated in RMB, Hong Kong dollars, US dollars and euros. It is also offering clearing services for inter-dealer, non-deliverable forwards referencing RMB, Taiwan dollars, Korean won and Indian rupees.
The firm plans to introduce client clearing in 2014 after new legislation in the Securities and Futures (Amendment) Bill is put in place.
OTC Clear is a subsidiary of Hong Kong Exchanges and Clearing (HKEx) and HKEx CEO Charles Li said in his blog yesterday that OTC Clear will leverage Hong Kong’s status as a major offshore RMB centre, by clearing RMB-denominated derivatives contracts, which he described as being a “tremendous growth area”.
Market data vendor Markit has also announced that MarkitSERV, its global electronic trade processing service for over-the-counter derivatives, now connects customers to OTC Clear. The firm said it is the first global trade processing middleware service to connect to OTC Clear. It will also connect customers to the Hong Kong Monetary Authority’s new trade repository.