OTC Clearing Hong Kong Ltd (OTC Clear) has received recognition as a clearing house from Hong Kong’s regulators, the Securities and Futures Commission.
OTC Clear is a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx). It was established to provide clearing services for over-the-counter derivatives.
It will handle inter-dealer trades at first and plans to introduce client clearing services in mid-2014. Initially, OTC Clear intends to offer clearing services for interest rate swaps denominated in renminbi, Hong Kong dollars, US dollars and euros, and non-deliverable forward currency swaps referencing several Asian currencies.
HKEx Chief Executive Charles Li said that OTC Clear would help the exchange to capitalise on the continuing internationalisation of the renminbi.
In addition, HKEx has also completed a subscription agreement under which twelve financial institutions agreed to subscribe for non-voting ordinary shares of OTC Clear as founding shareholders. Those twelve jointly hold 25% of OTC Clear’s total issued share capital while HKEx holds the remaining 75%. HKEx continues to hold 100% of OTC Clear’s voting ordinary shares.