Linklaters has advised OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), on the recent launch of its clearing service for cross currency swaps (CCS).
OTC Clear will initially provide clearing for swaps in the USD/CNH currency pair. It will be the first international clearing house to provide clearing for USD/CNH CCS.
Capital markets partner Chin-Chong Liew led the Linklaters team.
The CCS are traded actively in Hong Kong, where they are often used by issuers of offshore yuan bonds, also known as dim sum bonds, to swap proceeds into another currency.
OTC Clear provides a Payment versus Payment - or PvP - settlement solution through the Real-Time Gross Settlement system operated by the Hong Kong Monetary Authority, which eliminates settlement risk.
There has been a growing push by the HKEx to diversify its revenue streams due to weak stock markets. Chinese stocks are among the worst performing in Asia this year.