"Conversion" launching Hong Kong and the mainland interest rate exchange market to conduct interconnected cooperation

Xinhua News Agency, Beijing, July 4th (Reporter Wu Yu Wang Qian) The People's Bank of China, the Hong Kong Securities and Futures Commission, and the Hong Kong Financial Administration issued a joint announcement on the 4th to carry out the interconnection of the Hong Kong and the mainland interest rate exchange market ("" Conversion "), further promotes the internationalization of the RMB and consolidates Hong Kong's international financial center status.

In recent years, the opening of China's interbank bond market has been increasing to the outside world. As of the end of 2021, foreign investors held RMB 4 trillion. With the expansion of the debt holdings of overseas investors and the increase in transaction activity, the demand for the risk of derivatives management interest rates has continued to increase.

Pan Gongsheng, Vice President of the People's Bank of China, said at the "Bond" forum and "SCT" release ceremony held on the same day that on the basis of "Bond", the "Conversion Tong" of Hong Kong and the Mainland was launched. Foreign investors can participate in the financial market infrastructure of Hong Kong and the Mainland's financial markets to participate in the financial derivative market of Hong Kong and the Mainland, which is conducive to meeting investors' interest rate risk management needs. At the same time, this move will further improve the efficiency of the financial markets in Hong Kong and the Mainland, and consolidate the status of Hong Kong International Financial Center and offshore RMB business hubs.

The reporter learned from the People's Bank of China that the "swap" comprehensively borrowed from the mature experience and overall framework of the bond market openness to the outside world, connected the latest development trend of the overseas derivative market, and optimized the current with electronic transactions and central opponents' clearing as the core. There is a process that improves transaction liquidation efficiency. In order to ensure the order of transaction order and control the overall market risks of the market, the "swap" adopts the transaction model of the quotation agency to play the role of the quotation agency to stabilize the market. Prevent market risks while demand.

According to reports, the "Conversion" will continue to advance under the overall planning and deployment of China's financial market opening. At present, the People's Bank of China will jointly formulate institutional methods with the Hong Kong Securities Regulatory Commission, the Hong Kong HKMA and other departments, strengthen supervision and cooperation and information sharing, and guide relevant financial market infrastructure to prepare for rules, business, technology and other aspects, strengthen market communication Cultivate and guide market members to prepare before the transaction, and the project will be launched after 6 months.

[Editor in charge: Zhang Yongsu]

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