Joint press release of the PBoC, the SFC and the HKMA on Swap Connect enhancements to advance high-quality opening-up of China’s financial markets

The launch of Swap Connect in May 2023 as part of China’s financial market opening-up strategy has been successful, with smooth trading and increasing participation. By April 2024, over 3,600 interest rate swap transactions had been conducted, totalling approximately RMB1.77 trillion in notional amount. The average daily turnover has risen from around RMB3 billion in the first month to over RMB12 billion in April 2024, providing Mainland and overseas investors with an efficient risk management tool. To further develop the financial derivatives markets and support the opening-up initiative, enhancements to Swap Connect are planned. These include accepting interest rate swap contracts based on international standards, introducing ancillary services like compression and clearing of backdated swap contracts, and implementing system enhancements and incentive programs to reduce participation costs for investors. The regulators aim to strengthen Hong Kong’s position as an international financial center and facilitate the steady opening-up of China’s financial markets through continued collaboration and operational improvements in Swap Connect. Resources: https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=24PR85