Standard Chartered participates in first trading day of Swap Connect
Standard Chartered announces that today, it has successfully participated in the launch of the Northbound Trading of Swap Connect, including investing and providing client clearing and market-making services to help international investors access Mainland China’s interbank interest rate swap market.
According to the People’s Bank of China, as of the end of March 2023, the outstanding balance of bonds held by offshore institutions in the China Interbank Bond Market (“CIBM”) reached RMB3.3 trillion. With the increase in bond holdings by offshore investors and the growth of trade activities, the demand for derivatives to manage interest rate risks has been rising.
Swap Connect is a mutual access programme between the Mainland and Hong Kong interest rate swap markets. The launch of Northbound Trading allows overseas investors from Hong Kong and other countries and regions to participate in the Mainland interbank financial derivatives market through a connection between financial infrastructure institutions in the two markets.
John Thang, Head of Financial Markets, Hong Kong and Greater Bay Area, Standard Chartered, said:
“Standard Chartered fully supports Mainland China opening up its financial markets, capitalising on the well-established financial platforms in Hong Kong to connect to international markets. We are very pleased to have efficiently completed multiple Renminbi- denominated interest rate swap transactions through the Swap Connect today, promoting the development of the derivatives market in Mainland China and the internationalisation of the Renminbi.
Our international institutional investors have shown a very positive response to the launch of the Swap Connect. They are interested in participating in the programme’s Northbound Trading to better manage the interest rate risks of holding Mainland Chinese bonds. We believe that as international investors continue to increase their understanding of the bond and swap markets in Mainland China, the quota and eligible investment products of the Swap Connect will be gradually expanded, further supporting the role of Hong Kong as a super-connector and facilitating the rapid development of Mainland China’s financial markets.”
Standard Chartered has been playing a leading role in the internationalisation of the RMB. Standard Chartered Bank (Hong Kong) Limited is one of the Primary Liquidity Providers for the offshore RMB market and the first foreign bank qualified as a direct participant in China’s Cross- border Interbank Payment System.