Hong Kong Exchanges and Clearing Limited (HKEX) announced that it has signed a Memorandum of Understanding (MoU) with CMU OmniClear to jointly explore initiatives that will enhance Hong Kong’s post-trade securities infrastructure and support the long-term development of the city’s fixed income and currencies (FIC) ecosystem.
Through the collaboration, CMU OmniClear and HKEX will explore and pursue cooperation in areas such as realizing cross-asset class efficiencies across equities and fixed income, expanding the mobilization of Mainland bonds as collateral, enhancing Hong Kong as a bond issuance center and developing an international central securities depository (ICSD) in Asia.
Bonnie Chan, HKEX’s chief executive officer, said in a statement: “This agreement underscores HKEX’s strategic commitment to build a vibrant, world-leading FIC ecosystem in Hong Kong. We look forward to working closely with the HKMA and CMU OmniClear to advance the development of Hong Kong’s fixed income market, enabling the next chapter of RMB internationalization and enhancing Hong Kong’s status as an international financial center, a global risk management center, and an offshore Renminbi (RMB) business hub.”
Eddie Yue, chief executive of the HKMA and chair of the Board of Directors of CMU OmniClear, said in a statement: “This MOU signifies an important milestone and our shared commitment to supporting the development of Hong Kong’s capital markets. This is also a pivotal step in accelerating the transformation of CMU into an ICSD in Asia upon the establishment of CMU OmniClear. With our collective efforts, we believe we can offer the market a spectrum of products across asset classes, fostering the continued development and innovation in Hong Kong’s financial markets.”
With strengthened collaboration between financial market infrastructures, the partnership seeks to provide the foundation for the roll out of enhancements to bond settlement and collateral management operations and the further expansion of risk management products crucial for the sustainable growth of Hong Kong’s capital markets.
CMU, Hong Kong’s fixed income central securities depository (CSD) operated by CMU OmniClear, has $4.8 trillion of assets under custody and plays a key role in managing the settlement of bond transactions conducted on Bond Connect, as well as supporting the growth of Swap Connect by facilitating efficient use of collateral held with CMU.