Shanghai Clearing House, R5FX to Roll Out Central Counterparty Clearing Services for Cross-Border Forex Transactions
Tang Shihua
/SOURCE : Yicai
Shanghai Clearing House, R5FX to Roll Out Central Counterparty Clearing Services for Cross-Border Forex Transactions

(Yicai Global) Dec. 19 -- Shanghai Clearing House (SHCH) and the UK-based forex platform, R5FX, will jointly roll out central counterparty clearing services for cross-border forex transactions earlier next year, the Paper reported.

SHCH will provide central counterparty clearing services for cross-border foreign exchange transactions anonymously reached on R5FX by Chinese institutions and overseas commercial institutions with forex trading capabilities, Shen Wei, deputy general manager of SHCH, said yesterday.

SHCH will initially provide clearing services for spot transactions (T+2) in the US dollar against the Hong Kong dollar, the British pound against the greenback and the euro against the dollar. In the future, it will also offer services for transactions in derivatives and the yuan-related products when conditions are ripe.

"Through cross-border forex clearing, Chinese institutions can leverage their existing credit relationships with SHCH to trade with overseas counterparties under the precondition that counterparty risks are manageable. It can help Chinese firms establish credit ties with overseas banks at lower costs and improve their ability to participate in the international markets," Shen said.

The roll-out of the services is an achievement of the Ninth China-UK Economic and Financial Dialogue. R5FX specializes in emerging markets foreign exchange trading. R5 stands for Brazil's real, South Africa's rand, India's rupee, Russia's ruble and China's renminbi (yuan), representing currencies of BRICS countries.

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Keywords: Clearing Service , New Products , Cross-Border Currency Trade , Shanghai Clearing House