Seoul-headquartered Hana Bank has become the first South Korean bank to have its foreign exchange (forex) forwards cleared through LCH ForexClear.
Announced on Wednesday, the Korean lender has become a clearing client of the global clearinghouse LCH for its FX derivatives. The press release shared with Finance Magnates detailed that Societe Generale is acting as the clearing broker for Hana Bank.
“We are proud to offer our customers a wide range of FX services. Having access to ForexClear allows us to effectively manage our risk while benefiting from a number of efficiencies associated with clearing,” said Youngsun Moon, Head of FX & Derivatives Trading Section at Hana Bank.
“We are pleased to be the first Korean bank to use the service, and believe this will help us to expand our position as the best Foreign Exchange Provider in Korea to the global market.”
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Clearing FX Derivatives
ForexClear is LCH’s forex derivatives clearing service. The clearinghouse added eight FX forward currency pairs on the platform in October 2019 and the first CCP (central counterparty clearing) to clear forex forwards.
Hana Bank highlighted that as a ForexClear member and client it will benefit from enhanced risk management, margin, capital and operational efficiencies.
“As phase 5 of the uncleared margin rules rapidly approaches, we are seeing increased demand for clearing from firms looking to optimize their derivatives portfolios,” James Pearson, Head of LCH’s ForexClear, added. “South Korea has a vibrant FX and derivatives market, and we are delighted to welcome Hana Bank as the first from the country to clear at ForexClear.”
Eric Jungers, Head of Prime Asia at Societe Generale, commented: “The [Hana Bank] transaction is a testament to our Prime Service and OTC Clearing capability in Asia, a key region for the development of our activities. We look forward to continuing supporting our clients in the region in their pursuit of capital and operational efficiencies.”