HKEX’s OTC Clear successfully clears first trade for client clearing services

Maria Nikolova

OTC Clearing Hong Kong Limited has successfully cleared its first trade for client clearing services, with HSBC as the clearing broker for Chong Hing Bank.

Hong Kong Exchanges and Clearing Limited (HKEX) today announces that its over-the-counter derivatives clearing subsidiary, OTC Clearing Hong Kong Limited (OTC Clear), has successfully cleared its first trade for client clearing services, with HSBC as the clearing broker for Chong Hing Bank.

OTC Clear provides clearing and settlement services for OTC derivative transactions. Its client clearing services help OTC derivative market participants fulfil their regulatory obligations, as well as benefit from the enhanced credit and capital efficiency of central clearing.

By clearing at OTC Clear, clients will be able to realise cross product margining across different asset classes between portfolios such as interest rates swaps and cross currency swaps, and achieve portfolio margin efficiency. Under the central clearing mechanism, clients can make use of the qualified central counterparty to alleviate interbank counterparty credit limitations, especially with small and medium-sized institutions. This in turn enhances market liquidity.

Calvin Tai, Co-President and Chief Operating Officer, HKEX, said: “We are very excited to commence our client clearing services which allow clearing members to provide capital savings and netting benefits of central clearing for their clients. OTC Clear’s expanding suite of clearing services and products, combined with HSBC’s robust derivatives clearing capabilities, provide great opportunity to serve a continuously growing market.”

Justin Chan, Head of Greater China, Asia Pacific, Global Markets, HSBC, said: “HSBC is pleased to introduce client clearing service through HKEX OTC Clear, which demonstrates our continuous dedication in supporting the development of a safer and more efficient marketplace. Through the mitigation of counterparty risk, this solution serves as an essential bridge to facilitate our clients in navigating volatile market conditions.”

OTC Clear was formed in 2013 to provide OTC derivatives central clearing services. The central counterparty marked another robust quarter in the January-March period, with total clearing volumes reaching US$44.8 billion, while it recorded a 42% growth in cross currency swaps clearing volume to US$18.9 billion.

Read this next

Digital Assets

OneCoin founder Ruja Ignatova is selling penthouse in UK

OneCoin founder Ruja Ignatova, who steered one of the world’s biggest cryptocurrency frauds, is back into the spotlight more than five years after vanishing from the public eye.

Digital Assets

Bitpay taps MoonPay to offer access to +60 cryptocurrencies

Crypto payment service provider Bitpay said it’s partnering with exchange and web3 infrastructure provider MoonPay to provide its users with easier access to buy cryptocurrency instantly.

Digital Assets

New York investigates Gemini over FDIC insurance claims

New York regulators are investigating Gemini over “false and misleading” claims the Winklevoss-owned exchange had made about whether client funds are insured by the government.

Digital Assets

Binance launches Mastercard-backed crypto card in Brazil

In partnership with Mastercard, crypto giant Binance is launching its pre-paid card offering cryptocurrency “rewards” on customers’ purchases.

Digital Assets

Circle publishes a breakdown of USDC reserves for December

Boston-based stablecoin issuer Circle has revealed a breakdown of its reserves for December 2022, as well as a complete list of USDC reserve custodians.

Retail FX

Monex reports lower revenues as crypto downturn bites

Monex Group has reported its Q3 2022 financial metrics, which saw a reversal in terms of its revenues as TradeStation was grappling with a crypto market crash that has tanked the profitability of its crypto business.

Inside View

Broadridge report finds 27% of firms’ overall IT budget goes to digital transformation

“A new chapter in digital transformation is emerging. In our work with clients across the financial services industry we see leading firms are already reaping the benefits from digitalization and the use of technologies such as AI and blockchain/DLT, as they adapt to economic headwinds and new competitive dynamics”

Executive Moves

Ripple announces Monica Long as President

“I’m incredibly honored to take on the role of President at Ripple as we expand deeper into crypto-enabled services like liquidity, settlement and custody.”

Executive Moves

Arabesque AI appoints Carolina Minio Paluello as CEO

“Arabesque AI is uniquely positioned to service the asset management industry’s need to meet the growing market demand for hyper customised portfolios.”