In the News: Swap Connect; CNKI Cybersecurity Review; and Private Pension Funds

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Swap Connect Begins Development

On July 4, the People's Bank of China (PBOC), Hong Kong Monetary Authority (HKMA), Securities and Futures Commission (SFC), Hong Kong Exchanges and Clearing Limited (HKEX), China Foreign Exchange Trade System (CFETS), and Shanghai Clearing House (SHCH) jointly announced the development of Swap Connect, a new mutual access program between Hong Kong and mainland China's interbank interest rate swap markets.

Swap Connect will provide trading and clearing services for Hong Kong and international investors to access mainland China's financial derivatives market, and for investors in mainland China to access Hong Kong's financial derivatives market. HKEX's clearing subsidiary, OTC Clear, has partnered with CFETS and SHCH to develop infrastructure to support Swap Connect. "In its initial phase," says HKEX, "the innovative clearing link between OTC Clear and SHCH will facilitate international investors trading in the onshore interest rate swap market using existing international practices, including legal documentation, as well as clearing, settlement and risk management procedures." The northbound scheme will officially launch following regulatory approval and other preparatory work that is expected to take 6 months, while its southbound counterpart will be explored in due course.