On Sep. 25, 2025, CHI CFETS established a dynamic adjustment mechanism for interchange link quoters and increased the daily quota of northbound trading of Swap Connect to RMB 45bn, effective from Oct. 13, 2025.
In Sep. 2025, HK Treasury welcomed CHI CB's financial measures, see #270587.
HK SFC, HKMA, CHI CB issued joint press release on Swap Connect enhancements.
HK Treasury said enhancements improve efficiency of the mechanism, reduce costs.
CHI CFETS published answers to reporters' questions regarding the enhancements.
Follows CHI CB , HK SFC, HKMA Jul. 2022 jointly announced swap connect, #142511.
Also follows HKEX, SSE, SZSE Apr. 2024 expanded scope of eligible ETFs, #209076.
Measures
Interest rate swap contracts with payment cycles based on the international monetary market dates will be accepted for clearing to align with global mainstream products.
Introduced compression service and the clearing of backdated swap contracts as the associated supporting arrangement, to facilitate participating institutions to manage the notional amount outstanding, lower capital costs, as well as foster active trading.
System Enhancements
CHI CFETS, SH Clear, HKEX introduced new clearable product features and services for standard northbound rates derivatives (Northbound swap), from May 20, 2024.
Includes solo compression that allows clearing members to compress trades with equal but opposite economics, backdated trades, international monetary market trades.
Applicable to Northbound swaps, with respect to floating rate options 7-day repo, SHIBOR 3-month and SHIBOR overnight, for both house and client clearing.
Fee Waiver
SH Clear extended Northbound Swap Connect preferential program for one year.
HKEX extended the fee holiday for Swap Connect, including registration fee and maintenance fee of northbound swaps, effective from May 15, 2024 to May 14, 2025.
May 20, 2024 Enhancement
On May 20, 2024, HKEX, CHI CFETS and SH Clear enhanced Swap Connect program.
3 key enhancements were introduced, including international monetary market (IMM) trades, to align with common practices in international interest rate swap markets.
Solo compression service allowing participants to unwind original cleared trades before maturity, reducing capital costs and increasing transaction settlement efficiency.
Introduced backdated trades, usable with solo compression for trade unwinding.
Also waived trading, clearing fees for 1 year, including initial compression service fee.
SH Clear also upgraded versions of its risk calculation platform for Northbound Swap Connect and the Bond Calculator 2.0, aimed at enhancing risk value-added services.
Bond Calculator 2.0 introduces iterative upgrades for functions such as interface attribute control, parameter settings, calculations; as well as new features like margin calculation, strategy monitoring, analysis, in order to better meet needs of participants.
Aug. 2024 De-Registration Fee
On Aug. 16, 2024, HKEX extended the existing HKD 250 deregistration fee to standard northbound rates derivatives contracts resulting from the solo compression service.
HKEX said HK SFC has approved amendments to clearing rules and the clearing procedures of OTC clear for the purpose of extending the de-registration fee above.
On the same day, HKEX informed clearing members of OTC clear of the revised rules.
The extension of fee holiday will be effective from Aug. 16, 2024 to May 14, 2025.
May 2025 Extension of Fee Holiday
On May 12, 2025, HKEX announced extension of fee holiday for 3 additional months.
The extension of fee holiday will be effective from May 15, 2025 to Aug. 15, 2025.
Starting from Aug. 15, 2025, clearing members will be charged registration fee for new standardnorthbound rates derivatives contracts cleared for house business or clients.
De-registration fee will apply to each successful solo compression of these contracts.
A maintenance fee will be imposed based on the prevailing outstanding notional amount before maturity, irrespective of the contract's registration date.
May 15, 2025 Product Enhancement
On May 15, 2025, HKMA, CHI CB, HK SFC issued joint press release on enrichment of product types of swap connect to facilitate opening-up of China's financial market.
On same day HKEX, CHI CFETS announced the swap connect enhancements.
First enhancement will extend the tenor of interest rate swap contracts to 30 years, addressing more diverse risk management needs; second enhancement will expand scope of products to include interest rate swaps referencing the loan prime rate (LPR).
Looking ahead, regulatory authorities will continue to provide guidance to the financial market infrastructure operators in both markets, continue enhancing arrangements.
Jun. 2025 Maximum Tenor Extended
On Jun. 27, 2025, HKMA, CHI CFETS said maximum tenor for Northbound swaps under Swap Connect has been extended to 30 years, effective from Jun. 30, 2025.
This extension applies to swaps referencing the 7-day repo (FR007) and SHIBOR 3-month floating rates and is available for both house as well as client clearing.
The updated 30-year tenor contracts, which support IMM contracts, backdated contracts, portfolio compression, detailed in art 5.1 of SH Clear Clearing guidelines.
Central clearing services for corresponding onshore contracts will be launched also.
CHI CFETS and SH Clear will extend full fee waivers for interest rate swap trading and clearing under Swap Connect by one year, with further notice to follow upon expiry.
SH Clear upgraded its client system to include new features such as bond transaction logging, batch queries for clearing contract tenors, and Swap Connect limit monitoring.
SH Clear will enable system permissions for clearing members’ administrators to configure access to new functions; an updated user manual is also provided.
Jun. 30, 2025 HKEX Press Release
On Jun. 30, 2025, HKEX announced launch of 30-year interest rate swaps under northbound Swap Connect, extending the previous maximum tenor from 10 years.
HKEX said it remains committed to working with CFETS, SH Clear, regulators, participants to further develop Swap Connect, support the internationalization of RMB.
In Jul. 2025, HKMA, HK SFC spoke at bond connect anniversary summit, see #261743.
Sep. 19, 2025 Enhancement
On Sep. 19, 2025, HKEX OTC Clear introduced 1-year loan prime rate (LPR1Y) as a reference rate for Northbound swaps under Swap Connect; the maximum residual term for CNY non-deliverable interest rate swaps (NDIRS) is extended to 11 years.
Set the liquidity risk multiplier for LPR1Y swaps at 1.00 for portfolio level.
Component level rises with exposure, from 1.24 above HKD 250mn initial margin up to 3.56 above HKD 5bn initial margin; the higher of the two add-ons applies.
The Clearing procedures are amended to formally incorporate the changes.
CHI CFETS and SH Clear issued press releases re introduction of LPR1Y.
Swap Connect will add LPR1Y-linked swaps with full central clearing, including international monetary market (IMM), backdated start, and compression functions.
Onshore RMB derivatives markets will also introduce central clearing of LPR1Y IMM swaps, broadening cross-border risk management tools.
The enhancement will be effective from Sep. 22, 2025.
On the same day, HKEX announced enhancement to OASIS reports, see #257562.
Sep. 22, 2025 Enhancement Implementation
On Sep. 22, 2025, HKEX, SH Clear said the enhancement of adding LPR 1Y into the floating reference rate options under northbound Swap Connect and the extension of the maximum tenor of CNY NDIRS to 11 years took effect on Sep. 22, 2025.
Sep. 25, 2025 CHI CFETS Enhancement
On Sep. 25, 2025, CHI CFETS established a dynamic adjustment mechanism for interchange link quoters and increased the daily quota of northbound trading of Swap Connect to RMB 45bn, effective from Oct. 13, 2025.
In Sep. 2025, HK Treasury welcomed CHI CB's financial measures, see #270587.
Regulators
CHI CB; CHI CFETS; HK SFC; HK Treasury; HKEX; HKMA; SH Clear
