HKMA re-appoints HSBC as Settlement Institution for the US dollar RTGS system in Hong Kong

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that it has re-appointed The Hongkong and Shanghai Banking Corporation Limited (HSBC) as the Settlement Institution for the US dollar Real Time Gross Settlement (RTGS) system in Hong Kong for a third five-year period.

HSBC was first appointed as the Settlement Institution for the US dollar RTGS system for a period of five years from August 2000 when the system was launched. It was subsequently re-appointed as the Settlement Institution for another five years from August 2005. The US dollar RTGS system, which facilitates the efficient real-time settlement of US dollar transactions during Asian business hours, has been operating smoothly and effectively. Through establishing linkages with the Hong Kong dollar, euro and renminbi RTGS systems in Hong Kong, the Malaysian ringgit RTGS system in Malaysia, the Indonesian rupiah RTGS system in Indonesia and securities settlement systems in Hong Kong, the US dollar RTGS system provides payment-versus-payment (PvP) settlement for multi-currency foreign exchange transactions involving the US dollar and delivery-versus-payment (DvP) settlement of US dollar denominated securities. Both arrangements help increase settlement efficiency and eliminate settlement risk. Amid the increasing economic ties with the Mainland, the US dollar RTGS cross-border links with the Mainland also provide a safer and more efficient channel to settle cross-border US dollar payments between banks in Hong Kong and their counterparts on the Mainland. The re-appointment of HSBC as the Settlement Institution for another five years commencing August 2010 takes account of the bank's robust track record and its commitment to the continued development of the financial infrastructure in Hong Kong.

In the first half of 2010, the US dollar RTGS system settled 11,939 transactions a day on average, and had an average daily turnover value of US$10.1 billion. Comparing with turnover five years ago, there have been increases of 48% in terms of value and 115% in terms of count. In mid-2010, the US dollar RTGS system had 82 direct participants and 150 indirect participants. Among the indirect participants, 106 were banks domiciled outside Hong Kong.

For media enquiries, please contact:

Hong Kong Monetary Authority
Anissa Wong, Manager (Communications), at 2878 1802 or
Yokee Wong, Manager (Communications), at 2878 1213

The Hongkong and Shanghai Banking Corporation Limited
Ms Vinh Tran, Senior External Relations Manager, HSBC, at 2822 4924

Hong Kong Monetary Authority
The Hongkong and Shanghai Banking Corporation Limited
27 August 2010