HONG KONG – The People's Bank of China, the Securities and Futures Commission, and the Hong Kong Monetary Authority have announced a series of measures to enhance the mutual access arrangements between the Chinese mainland and Hong Kong interest rate swap markets.

Welcoming the decision, The Hong Kong Special Administrative Region government thanked the central government and relevant authorities for their strong support.

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“The newly announced measures further foster the collaborative development of the derivatives markets in the two places,” a spokesman for the SAR government said in a statement on Monday night.

The HKSAR government strives to deepen and expand mutual access between the mainland and Hong Kong financial markets, complementing our country's economic development strategy.

Spokesman, HKSAR Govt

The measures will expand the choice of products under Swap Connect, enhance the efficiency of the mechanism, and reduce participation costs, further addressing the diverse risk management needs of domestic and foreign investors as well as promoting trading, said the government.

“We will closely collaborate with the relevant mainland institutions and seek to implement the arrangements at full speed, sparing no effort in continuing to contribute to the development of our country as a financial powerhouse and consolidate Hong Kong's status as an international financial center,” reads the statement.

The measures announced Monday are the second batch of enhancements publicized within a month following the China Securities Regulatory Commission's announcement last month of the five measures to support the expansion of mutual access between the capital markets of the two places and the listing of leading mainland enterprises in Hong Kong.

The enhancement measures include accepting interest rate swap contracts with payment cycles based on the International Monetary Market dates for clearing; introducing compression service and the clearing of backdated swap contracts; and rolling out other system enhancements and incentive programs to reduce the participation costs of mainland and overseas investors.

“Since implementation in May 2023, Swap Connect has been operating smoothly with increasing investor participation,” reads the statement.

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As of April 2024, the average daily turnover calculated on a monthly basis had nearly tripled from the first month of its launch to over RMB 12 billion in notional amount, providing investors with a convenient and efficient risk management tool, it added.

“The mainland and Hong Kong regulators will guide the financial market infrastructure institutions in the two places to continue to promote business collaboration under Swap Connect in a steady and orderly manner, and improve the various operational arrangements,” said the spokesman.

The HKSAR government strives to deepen and expand mutual access between the mainland and Hong Kong financial markets, complementing our country's economic development strategy, the spokesman said.

READ MORE: HK's finance sector amped up in tandem with mainland's

The central government attaches importance to Hong Kong's financial market and actively promotes the concerted development of the financial markets of both places, providing solid policy protection and broad scope for Hong Kong to take forward the relevant work, added the spokesman.