The Hong Kong Securities and Futures Commission (SFC) welcomed broader bond collateral eligibility and lower charges at Hong Kong Exchanges and Clearing Limited’s (HKEX) listed derivatives clearing houses. HKFE Clearing Corporation Limited and The SEHK Options Clearing House Limited have begun accepting China Government Bonds and China policy bank bonds as margin collateral. Accommodation charges, the fees charged for using noncash margin collateral, have been reduced to 0.15% a year for clearing participants. Eligible bonds comprise onshore China Government Bonds and policy bank bonds held under Northbound Bond Connect, together with offshore China Government Bonds. The expansion follows HKEX’s OTC Clearing Hong Kong Limited beginning to accept onshore Bond Connect bonds in early 2025 and implements an initiative in the SFC’s September strategic action plan. It delivers the November extension outlined in October and is intended to lower funding costs while broadening the offshore use of Chinese bonds.
Hong Kong Securities and Futures Commission welcomes HKEX expansion of China bond collateral and fee cut to 0.15% a year
The Hong Kong Securities and Futures Commission welcomed the acceptance of China government and policy bank bonds as margin collateral at HKEX’s two listed derivatives clearing houses. Eligible assets include onshore bonds held through Northbound Bond Connect and offshore China Government Bonds, while charges for using noncash margin collateral have fallen to 0.15% annually. The expansion implements a previously outlined November initiative to broaden collateral use and lower participants’ funding costs.