HKMA Welcomes Swap Connect

The People’s Bank of China, the Hong Kong Securities and Futures Commission and the Hong Kong Monetary Authority (HKMA) jointly announced today (4 July) a new initiative for mutual access between interest rate swap markets in Hong Kong and Mainland China (Swap Connect).

Swap Connect marks another milestone in connecting the financial markets between Hong Kong and the Mainland. With Northbound Trading commencing first in the initial stage, Swap Connect will provide a convenient and secure channel for overseas investors to trade interest rate swap products in the Mainland via a connection between infrastructure institutions in the two places.

Eddie Yue, Chief Executive of the HKMA, said, “I am pleased to see the financial cooperation between Hong Kong and the Mainland expand into the derivatives market. Swap Connect will create synergy with Bond Connect to facilitate global investors’ management of interest rate risks for their bond investment on the Mainland. The scheme will add to the depth and breadth of the opening-up of the Mainland financial markets. It will also create more opportunities for financial institutions in Hong Kong and strengthen Hong Kong’s status as a risk management centre.”

The relevant infrastructure institutions in Hong Kong and the Mainland will actively take forward the development work, with a view to launching Swap Connect in six months.

Hong Kong Monetary Authority
4 July 2022