Hong Kong Exchanges to Start OTC Derivative Clearing Next Month
Hong Kong Exchanges & Clearing Ltd, the world’s second-biggest bourse operator by market value, will begin clearing over-the-counter derivatives in May, Chief Executive Charles Li said.
“The system is largely completed, ready to go,” Li said today after the bourse operator’s annual general meeting in Hong Kong. “The initial take up we expect to be reasonably moderate.”
Regulators worldwide are requiring more over-the-counter derivatives be cleared through central counterparties after they were blamed for exacerbating the 2008 global financial crisis. The Chinese bourse operator purchased the London Metal Exchange and is adding derivative products to offset falling equity volumes and slowed initial public offerings from China.
The company said earlier it planned to start the clearinghouse in April.
The clearinghouse “is a bit like a baby,” Li said. “It has to stand before it can walk and walk before it can run.”
Separately, directors John Strickland and Oscar Wong were reappointed. Former Chairman Ronald Arculli, who stepped down last year, today left his post as a government-appointed director. Margaret Leung Ko May-yee replaced him and is the only woman on the board.
Hong Kong’s government owns 5.5 percent of the bourse company, according to data compiled by Bloomberg. Six of the 12 non-executive directors are appointed by the government.
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