The direct link from the HKMA’s Central Moneymarkets Unit (CMU) to Euroclear, the Brussels-based ICSD, commenced live operation today, says Euroclear.
“The fully automated, real-time CMU link to Euroclear enables Asian investors to hold and settle international debt securities through their CMU accounts. This new link significantly improves the access of Asian investors to international securities and counterparties in a secure, DVP (delivery-versus-payment) environment,” says Euroclear. “Such efficient, cost-effective and low-risk settlement of cross-border securities transactions also enables
investors to better manage their liquidity.
This development is expected to enhance Hong Kong’s role as a securities settlement hub in the region.”
The new service supplements the existing link from Euroclear to the CMU, established in 1994, which enables Euroclear clients to settle debt securities lodged with the CMU. Commenting on the implementation of the link, Joseph Yam, Chief Executive of the HKMA, said: “This new link is an important addition to Hong Kong’s financial infrastructure.
It offers a highly efficient channel through which investors in Hong Kong and the region can access the huge pool of international securities lodged in Euroclear. It also provides further support to Hong Kong’s role as an investment and fund management centre.”
Pierre Francotte, CEO of Euroclear Bank, added: “This link demonstrates our commitment to the Asian market by making it easier and less costly for Asian investors to settle a wide range of foreign securities in their own time zones, while offering access to an even broader range of trading counterparties to our clients.”