Euro Clearing System goes live

Press Releases

24 Apr 2003

Euro Clearing System goes live

Hong Kong will process its first transaction through the new Euro Clearing System on 28 April 2003. The system was commissioned by the Hong Kong Monetary Authority (HKMA) in July 2002, with Standard Chartered Bank appointed as the Settlement Institution. The new service will allow financial institutions in Hong Kong and in the region to settle euro transactions real-time in the Asian time zone.

The key functions of the Euro Clearing System will include an interbank Real Time Gross Settlement (RTGS) system, Payment versus Payment (PvP) settlement for EUR/USD and EUR/HKD foreign exchange transactions and Delivery versus Payment (DvP) settlement for euro denominated debt securities through a linkage with the Central Moneymarkets Unit (CMU).

Twenty banks, together with the HKMA, have joined as direct participants of the Euro Clearing System, following a series of successful simulation tests conducted by the HKMA, Standard Chartered Bank, Hong Kong Interbank Clearing Limited (the operator of the system), and the participating banks.

Mr Joseph Yam, Chief Executive of the HKMA, said: "With an efficient and reliable Euro Clearing System in Asia, the Herstatt risk (the foreign exchange settlement risk arising from time zone differences) associated currently with the settlement of Asia's euro denominated transactions in European time, can be eliminated. The launch of the Euro Clearing System marks another milestone in developing Hong Kong as a regional clearing centre for multi-currency funds transfer and will further strengthen Hong Kong's position as an international financial centre."

Mr Peter Wong, Director of Standard Chartered Bank, said: "Standard Chartered Bank is delighted to have been appointed as the Settlement Institution for Euro Clearing in Hong Kong. We look forward to providing financial institutions in Hong Kong with a convenient and efficient Euro clearing service."

On 3 July 2002 the HKMA appointed Standard Chartered Bank as the Settlement Institution for the Euro Clearing System in Hong Kong for a franchise period of five years starting from March 2003. This is the second foreign currency clearing system in Hong Kong after the US dollar Clearing System implemented in August 2000.

For further enquiries, please contact:

Hong Kong Monetary Authority

Mr Thomas Chan, Senior Manager (Press) at (852) 2878 1480 or
Ms Jasmin Fung, Manager (Press) at (852) 2878 8246

Standard Chartered Bank

Ms Margaret Lee, Head of Financial Institutions, Greater China at (852) 2821 1362 or
Ms Lavina Chan, Senior Corp Affairs Manager at (852) 2820 3075

Hong Kong Monetary Authority
Standard Chartered Bank

24 April 2003

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Last revision date : 24 April 2003