Bloomberg has expanded the capabilities of its Swap Connect solution to better facilitate global investment in China’s onshore interbank interest rate swap (IRS) markets.
Using the OTC derivatives trading link, which connects Mainland China and Hong Kong, clients are now able to access support for IRS contracts with International Monetary Market dates. This allows the solution to meet investors’ diverse risk management needs, Bloomberg stated.
The update also allows clients to unwind existing contracts in global investors’ portfolios, which the firm says will enable eligible IRS contracts to be compressed with equal and opposite economics at the clearing house. This in turn will reduce capital costs and promote trading, it added.
These updates are in line with changes made to the Northbound Swap Connect scheme by China Foreign Exchange Trade System (CFETS), Shanghai Clearing House, and OTC Clearing Hong Kong Limited, which come into effect today.
Dahai Wang, head of Greater China at Bloomberg, commented: “As we reflect upon one year of Swap Connect in operation, it is only fitting that the first derivatives mutual market access scheme between Mainland China and Hong Kong is taking another significant step forward.
“We will continue to work closely with our partners to optimise this solution, empowering global investors and helping to deliver new levels of access to China’s onshore financial markets.”
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