OTC Clearing Hong Kong (OTC Clear) has completed its first client clearing trades for Japanese financial institutions.
OTC Clear is the central counterparty subsidiary (CCP) of the Hong Kong Exchanges and Clearing (HKEX).
The first trades expand the reach of HKEX’s fixed-income and currency product offering in the region and internationally.
OTC Clear cleared a US Dollar-Offshore Renminbi Cross Currency Swap trade by Mizuho Bank and a US Dollar-Hong Kong Dollar trade by MUFG Bank.
The Hongkong & Shanghai Banking Corporation acted as the clearing broker for both trades, HKEX revealed.
The latest trades underscore the growing client demand for cross currency swaps (CCS), which support the expansion of OTC Clear’s liquidity pool for CCS, according to HKEX.
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.”
Tai commented: “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, 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, noted: “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.”
Kato added: “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.”
