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Clearing members seek better collateral rates from HKEX

Created at 23 Jul · 12:15 AM1 source
IN SHORT

Clearing members have welcomed recent changes by Hong Kong Exchanges and Clearing (HKEX) regarding rates paid on posted collateral. However, they argue that the central counterparty (CCP) still needs to improve its competitiveness compared to global peers.

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Who's Involved

HKEX
Hong Kong Exchanges and Clearing, a central counterparty (CCP)
Clearing members
Participants in the HKEX system seeking improved collateral rates
Head of Asia rates trading at a global bank
Commented on the positive step but noted a significant gap

↳ Why This Matters

Clearing members' satisfaction with collateral rates directly impacts the efficiency and cost-effectiveness of trading and clearing activities on the HKEX, influencing its overall competitiveness in the global financial market.

Key facts

  • HKEX has implemented changes to the rates it pays on posted collateral.
  • Clearing members acknowledge these changes as a positive development.
  • Despite the changes, a notable disparity persists when compared to international competitors.

Clearing members have expressed a desire for Hong Kong Exchanges and Clearing (HKEX) to offer more competitive rates on posted collateral. While acknowledging recent adjustments made by the central counterparty (CCP) late last year, industry participants feel that HKEX still lags behind its global peers in this regard.

A head of Asia rates trading at a global bank described the recent changes as a "positive step forward." However, they also pointed out that "there is still a significant gap compared with" what other international CCPs offer, indicating that further improvements are necessary to enhance HKEX's competitiveness in the market.

Frequently asked questions

HKEX made changes to the rates it pays on posted collateral late last year. The specific details of these changes are not elaborated upon in the provided text.

Clearing members believe that HKEX still offers less competitive rates on posted collateral compared to its global peers, despite recent positive adjustments.

A head of Asia rates trading at a global bank provided a comment, calling the changes a positive step but noting a significant gap remains.

What Happens Next

01Further discussions between HKEX and clearing members regarding collateral rates are anticipated.

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How It Developed

HKEX made changes to rates paid on posted collateral.
Clearing members view the changes as a positive step.
Clearing members believe a significant gap remains compared to global peers.

Sources

T1
Clearing members want more from HKEX on collateral ratesRisk.net

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