Hong Kong Exchanges and Clearing (HKEX) announced that its clearing subsidiary, OTC Clearing Hong Kong Limited (OTC Clear), will start accepting Chinese Government Bonds and Policy Bank Bonds held by international investors through Bond Connect as margin collateral for all derivative transactions cleared by OTC Clear from 21 March 2025.
Since January, these bonds have already been permitted for use to cover initial margin requirements for Northbound Swap Connect transactions.
HKEX head of Platform & Market Structure Development, Glenda So, said in a statement: “This initiative will provide greater flexibility to international investors and improve their capital efficiency, further enhancing the attractiveness of RMB-denominated assets and promoting the internationalization of the RMB.”
OTC Clear provides clearing services for interest rate swaps (including China onshore interest rate swaps via Swap Connect), non-deliverable currency forwards, cross currency swaps and deliverable FX.