Clearstream Banking Luxembourg and the Hong Kong Monetary Authority (HKMA) are pleased to announce their agreement to develop a direct link between the HKMA's Central Moneymarkets Unit (CMU) and the settlement system of Clearstream Banking Luxembourg.
Scheduled to go live in January 2003, the new link will provide Asian investors with a window to clear, settle and hold Clearstream eligible debt securities via their CMU accounts and thus to overcome market boundaries. The new link will significantly improve settlement efficiency, enabling Asian investors to trade international securities in a secure and robustly designed environment.
As one of the world's premier international central securities depositories, Clearstream offers international clearing, settlement and custody services covering more than 39 markets and more than 200,000 different securities.
In 1994, an indirect one-way link was established from Clearstream Banking Luxembourg to the CMU, enabling Clearstream customers to clear and settle debt securities lodged with the CMU. This link has been operating successfully since launched and has attracted many oversea investors to Hong Kong's debt market.
Mr Joseph Yam, Chief Executive of the HKMA, said: "Over the past few years, the HKMA has been collaborating with various bodies to further develop the Asian debt market by providing an efficient and secure securities settlement infrastructure for cross-border transactions. This new link between CMU and Clearstream is an important addition to Hong Kong's cross-border settlement infrastructure. Hong Kong will be better placed to serve as the regional hub for the trading and settlement of international securities."
Mr Andre Roelants, President and CEO of Clearstream International, stated : "We are pleased with the establishment of this new link because it will further widen the international nature of our business and will enable us to strengthen the cross-border settlement infrastructure to provide a more robust, efficient, secure and cost-effective channel to settle cross-border securities transactions. We have had a physical presence in the Asia-Pacific region for over 12 years and have built excellent working relationships with all the major markets. This is another good example of how Clearstream facilitates market access through its infrastructure in a rapidly expanding market to create an innovative solution in response to customer demand."
Background information about the HKMA and Clearstream International
The HKMA
The Hong Kong Monetary Authority is responsible for maintaining monetary and banking stability, managing Hong Kong's official reserves and developing Hong Kong's financial infrastructure. The HKMA operates the CMU, which serves as an electronic depository for debt instruments and provides related settlement facilities. These services are available to issuers and investors in Hong Kong and further afield, and for debt securities denominated in Hong Kong dollars or other currencies. The value of holdings by overseas investors in the CMU is HK$26 billion (EUR 3.6 billion).
Clearstream International
On 15 April 2002, Deutsche Borse AG has won approval for its 100% ownership of Clearstream International. Deutsche Borse AG and Clearstream anticipate that the integration will be completed by early 2003 and will create the preeminent full service provider for the securities industry setting the standard for 'straight-through processing' by optimally coordinating and fine-tuning all systems for trading, clearing and settlement.
Clearstream International is Europe's premier clearing and settlement organisation offering a comprehensive service for equities and bonds both domestic and cross-border. Clearstream International has three divisions - Clearstream Banking Frankfurt, Clearstream Banking Luxembourg and Clearstream Services. Clearstream Banking contains the core clearing and settlement business. Clearstream Banking Luxembourg is assigned short- and long-term ratings of A1+ and AA+ respectively by Standard and Poors and F1+ and AA+ respectively by Fitch.
Clearstream Services brings together the IT Development and Operations functions and provides securities processing services to the Clearstream Banking units and the industry. Clearstream Services is responding to increasing market demand for centralised securities processing, using a single IT system for clearing, settlement and custody based on the state-of-the-art system called Creation.
For more information on Clearstream, see its Web site at www.clearstream.com.
For further information on Clearstream, please contact:-
Yolande Theis Tel: +352 45 11 05 320
Clearstream International Fax: +352 45 11 09 5320
ytheis.ci@clearstream.com
Contact details for the HKMA
Thomas Chan Tel: +852 2878 1480
Thomas_mk_chan@hkma.gov.hk Fax: +852 2878 1892
Hong Kong Monetary Authority
28 May 2002
