HKMA Reappoints SCBHK To Settle Euro Clearing In Hong Kong

by Mary Swire, Tax-News.com, Hong Kong

13 September 2007

The Hong Kong Monetary Authority (HKMA) announced on September 12 that it has re-appointed the Standard Chartered Bank (Hong Kong) Limited (SCBHK) as the Settlement Institution for the Euro clearing system in Hong Kong for a second five-year period.

SCBHK was appointed as the Settlement Institution for the Euro clearing system for a period of five years from March 2003 when the system was launched. According to the HKMA, the Euro clearing system, which facilitates the efficient real-time settlement of Euro transactions during Asian business hours, has been operating smoothly and effectively.

Through establishing linkages with the Hong Kong dollar and US dollar clearing systems in Hong Kong and with securities settlement systems, the Euro clearing system provides payment-versus-payment (PvP) settlement for foreign exchange transactions involving Euro and delivery-versus-payment (DvP) settlement of Euro denominated securities. Both arrangements help increase settlement efficiency and eliminate settlement risk.

The HKMA went on to add that the Euro clearing system has been an integral part of Hong Kong’s multi-currency and multi-dimensional clearing and settlement platform, and the re-appointment of SCBHK as the Settlement Institution for the five years commencing March 2008 takes account of the bank’s robust track record, and its commitment to the continued development of the financial infrastructure in Hong Kong.

In the second quarter of 2007, the Euro clearing system settled a monthly average of 3,152 transactions, and had an average monthly turnover of EUR27 billion (US$37.5 billion). Currently, the Euro clearing system has 28 Direct Participants and 21 Indirect CHATS Users.

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