HKEx Subsidiary, OTC Clear Adds Standard Chartered as UK Clearing Member

The move by Standard Chartered is HKEx’s first UK incorporated member, which will help the group tap into the region’s

OTC Clearing Hong Kong Limited, a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), has welcomed Standard Chartered Bank as its newest clearing member, according to an HKEx statement.

HKEx helps provide a cascade of clearing services for over-the-counter (OTC) derivatives. The stock exchange group collectively is Asia’s third largest unit in terms of market capitalization behind the Tokyo Stock Exchange and Shanghai Stock Exchange.

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The move by Standard Chartered is HKEx’s first UK incorporated member, which will help the group tap into the region’s capabilities. Part of the draw surrounding Standard Chartered’s inclusion is its lack of barriers surrounding capital restrictions, namely in reference to the RMB.

According to Calvin Tai, HKEx’s Head of Global Clearing, in a recent statement on the clearing status, “We are pleased to have our first UK incorporated member on board. As one of the designated Primary Liquidity Providers of the offshore RMB market in Hong Kong, as well as a key stakeholder and market maker in regional OTC derivative markets, Standard Chartered Bank’s participation significantly adds value to our service offering.

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“We see an increasing interest in clearing membership from regional and global banks, as central clearing via OTC Clear can effectively help ameliorate some of the current credit and capital restrictions in RMB fixed income and currency derivative markets,” he added.

“We are excited to join OTC Clear as a clearing member. OTC Clear is the first OTC derivatives clearing house in Hong Kong and its offering to clear offshore RMB OTC products is in line with the strong growth and increasing volumes of RMB derivatives traded offshore. With the commencement of our membership, we look forward to contributing further to the development of the offshore RMB market,” noted Gene K. Kim, Regional Head of Financial Markets for Greater China and North Asia at Standard Chartered, in an accompanying statement.

Earlier this month, HKEx underwent a series of changes to its management structure ahead of the launch of its new series of initiatives in 2016 and 2018. This included the rollout of four new sovereign divisions, including Platform Development, Clearing, Markets and Market Development.

Despite the announcement, Standard Chartered has had a November to forget, after it reported earlier this month that it would cut approximately 15,000 jobs to help jump-start its retail transformation strategy. The news came after the bank recently reported its sagging Q3 2015 revenues that yielded an unexpected -$139 million loss.

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