Hong Kong Exchanges and Clearing Limited (HKEX) today announces that its central counterparty (CCP) subsidiary, OTC Clearing Hong Kong Limited (OTC Clear), has successfully completed its first client clearing trades for Japanese financial institutions.

OTC Clear cleared a US Dollar-Offshore Renminbi Cross Currency Swap (USDCNH CCS) trade by Mizuho Bank and a US Dollar-Hong Kong Dollar (USDHKD CCS) trade by MUFG Bank. The Hongkong & Shanghai Banking Corporation acted as the clearing broker for both trades.

The latest trades underscore the growing client demand for cross currency swaps (CCS), supporting the healthy expansion of OTC Clear’s liquidity pool for CCS.

Calvin Tai, Co-President and Chief Operating Officer, HKEX, said:

“The trades mark a major milestone for OTC Clear on our way to being recognised as a major clearing house for cross currency swaps. This is an important development in our continued expansion of our product and service offering, strengthening Hong Kong’s relevance as a leading international financial centre.”

Yuichiro Harada, Managing Director, Head of East Asia Treasury Department, Mizuho Bank, said:

“It is a significant step that Mizuho bank, Ltd starts to clear cross currency swaps as the first Japanese financial institution. We appreciate all the support we have received from all concerned. We will keep contributing to the development of local currency derivatives business in Hong Kong as one of the major market players.”

Akira Kato, Managing Director, Head of Global Markets Division for Asia, MUFG Bank, said:

“As one of the first Japanese banks to be appointed Indirect Clearing Member of OTC Clear, MUFG is pleased to have successfully collaborated with OTC Clear on a USDHKD cross currency swap. With the rapid growth of business activity in the Greater China region, the ability to efficiently clear OTC derivatives is becoming increasingly important, and MUFG’s partnership with OTC Clear will greatly enhance our service offering to global clients keen on capturing growth opportunities in this dynamic region.”

In January 2020, OTC Clear was licensed by the Financial Services Agency of Japan (JFSA) as a Foreign Financial Instruments Clearing Organisation, which facilitated Japanese financial institutions clearing CCS via HKEX’s OTC Clear. In addition to Japan, OTC Clear is also recognised by authorities in the US, European Union, and Australia, providing clearing services to their financial institutions.