OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx) that provides clearing services for over-the-counter, or OTC, derivatives, has welcomed Citibank, NA, Hong Kong Branch (Citi) as its first Clearing Member from the US.
"We are pleased to admit Citi as our first US Clearing Member following our receipt of No Action Relief from the US Commodity Futures Trading Commission (CFTC)," said Calvin Tai, HKEx's Head of Global Clearing (Asia). "We have submitted an application for exemption from the US's derivatives clearing organisation requirements, which will allow OTC Clear to provide inter-dealer clearing services to US banks.
"The RMB derivatives market is becoming increasingly significant to global banks from the US and other countries, and OTC Clears fast-expanding clearing membership reflects that trend."
"We are pleased to have become a clearing member of OTC Clear," said Paulus Mok, Head of Markets and Securities Services for Greater China and Country Treasurer for Hong Kong at Citi. "The membership will reinforce our role to help entrench Hong Kong's position as the premier offshore RMB centre and we look forward to further contribute to the development of the offshore RMB market here."
OTC Clear is a recognised clearing house under Section 37 of Hong Kong's Securities and Futures Ordinance. Overseas, in addition to its No Action Relief from the CFTC, it is recognised as a third country central counterparty (CCP) by the European Securities and Markets Authority, or ESMA, which allows CCPs located outside the European Union to offer clearing services to certain European financial institutions. OTC Clear is also recognised as a prescribed facility under the regime for mandatory central clearing of OTC derivatives in Australia.