UBS and HSBC conduct first ever renminbi triparty repo
06 December 2012 Brussels and Hong Kong
Image: Shutterstock
UBS London and HSBC, Hong Kong have completed their first renminbi (RMB) triparty repo using Euroclear Bank and the Hong Kong Monetary Authority (HKMA) as collateral management agents.
The bilateral agreement between HKMA and Euroclear Bank has allowed the transfer of securities as collateral from UBS London鈥檚 account in Euroclear bank鈥攙ia Euroclear鈥檚 global collateral highway鈥攖o the HSBC Hong Kong branch鈥檚 account in HKMA to support the RMB repo.
The joint service has been initiated to enable international financial institutions to use securities held with Euroclear Bank as collateral in triparty repo transactions with members of the HKMA, to access liquidity from Hong Kong in renminbi and other currencies.
Justin Chan, deputy head of global markets APAC and head of Hong Kong trading, at HSBC, said: 鈥淗SBC estimates that by the end of 2015, the level of RMB deposits in Hong Kong will increase to a total of 30 percent from the current 9 percent of all Hong Kong deposits.鈥�
鈥淔irms that manage these growing RMB reserves will naturally seek to optimise their cash balances through the repo markets with an international counterparty base. It was easy and efficient to finalise the repo with UBS AG London, working through our local CSD account, operated by the HKMA.鈥�
Olivier Grimonpont, general manager and regional head, APAC, at Euroclear, said: 鈥淭he HKMA and Euroclear Bank are pleased to serve the needs of domestic and international market participants in managing their collateral for RMB and other types of repo and securities lending deals.鈥�
鈥淲orking successfully with HSBC and UBS to fulfil their collateral management requirements proves that together we can source and maintain collateral from Hong Kong, London or almost anywhere else to sustain vital liquidity channels.鈥�
The bilateral agreement between HKMA and Euroclear Bank has allowed the transfer of securities as collateral from UBS London鈥檚 account in Euroclear bank鈥攙ia Euroclear鈥檚 global collateral highway鈥攖o the HSBC Hong Kong branch鈥檚 account in HKMA to support the RMB repo.
The joint service has been initiated to enable international financial institutions to use securities held with Euroclear Bank as collateral in triparty repo transactions with members of the HKMA, to access liquidity from Hong Kong in renminbi and other currencies.
Justin Chan, deputy head of global markets APAC and head of Hong Kong trading, at HSBC, said: 鈥淗SBC estimates that by the end of 2015, the level of RMB deposits in Hong Kong will increase to a total of 30 percent from the current 9 percent of all Hong Kong deposits.鈥�
鈥淔irms that manage these growing RMB reserves will naturally seek to optimise their cash balances through the repo markets with an international counterparty base. It was easy and efficient to finalise the repo with UBS AG London, working through our local CSD account, operated by the HKMA.鈥�
Olivier Grimonpont, general manager and regional head, APAC, at Euroclear, said: 鈥淭he HKMA and Euroclear Bank are pleased to serve the needs of domestic and international market participants in managing their collateral for RMB and other types of repo and securities lending deals.鈥�
鈥淲orking successfully with HSBC and UBS to fulfil their collateral management requirements proves that together we can source and maintain collateral from Hong Kong, London or almost anywhere else to sustain vital liquidity channels.鈥�
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