HKMA's direct link with Euroclear goes live

Hong Kong took another step today (November 25) in strengthening its position as a securities settlement hub with the first live operation of the direct link from the Hong Kong Monetary Authority's Central Moneymarkets Unit (CMU) to Euroclear, the Brussels-based international central securities depository.

The fully automated, real-time CMU link to Euroclear enables Asian investors to hold and settle international debt securities through their CMU accounts.

This new link significantly improves Asian investors' access to international securities and counterparties in a secure, DVP (delivery-versus-payment) environment.

Such efficient, cost-effective and low-risk settlement of cross-border securities transactions also enables Asian investors to better manage their liquidity. The development is expected to enhance Hong Kong's role as a securities settlement hub in the region.

The new service supplements the existing link from Euroclear to the CMU, established in 1994, which enables Euroclear's clients to settle debt securities lodged with the CMU.

Commenting on the implementation of the link, the Chief Executive of the HKMA, Mr Joseph Yam, said: "This new link is an important addition to Hong Kong's financial infrastructure. It offers a highly efficient channel through which investors in Hong Kong and the region can access the huge pool of international securities lodged in Euroclear. It also provides further support to Hong Kong's role as an investment and fund management centre."

The Chief Executive Officer of Euroclear Bank, Mr Pierre Francotte, said the link demonstrated the bank's commitment to the Asian market by making it easier and less costly for Asian investors to settle a wide range of foreign securities in their own time zones, while offering access to an even broader range of trading counterparties.

End/Monday, November 25, 2002