LCH Limited, an LSEG business, has announced the signing of a Memorandum of Understanding (MoU) with CMU OmniClear Limited. CMU OmniClear is a wholly owned subsidiary of the Exchange Fund, managing the operations and business development activities of the Central Moneymarkets Unit (CMU) on behalf of the Hong Kong Monetary Authority (HKMA).
By leveraging Hong Kong’s Payment versus Payment (PvP) settlement solution, LCH Limited will extend its product scope to include the clearing and settlement of CNH FX Options, Forwards, Swaps and Spot transactions through its FX clearing service, ForexClear. The solution aims to enable full multilateral netting and guaranteed settlement, thereby removing a significant barrier to increased trading activity. Additionally, LCH ForexClear and CMU OmniClear Limited plan to explore the inclusion of other currencies based on initial market adoption and demand. The new offering is expected to be available in the first half of 2026, subject to regulatory approvals, and will allow settlement netting of trades executed in entities incorporated outside of Hong Kong.
These new initiatives are driven by market demand for additional CNH product offerings and are aligned with LCH’s objective of extending its services to market participants globally, allowing them to benefit from the enhanced risk management and margin efficiencies through clearing.
In response to customer demand, LCH Limited will also look to expand its range of eligible collateral in 2026 to include CNH-denominated Chinese Government Bonds (CGBs), which will be settled and held in the CMU, pending regulatory submission and approval. This initiative follows LCH Limited’s recent announcement that it had begun accepting USD and EUR-denominated CGBs, held in Euroclear Bank. With increasing participation from members and clients in the region, the eligibility of CGBs will facilitate their ability to meet initial margin requirements more efficiently.
LCH has consistently aimed to deliver capital and margin efficiencies to market participants trading within the Asian derivatives market. Acceptance of Singaporean Government Bonds and USD/EUR denominated CGBs as eligible collateral, and Malaysian Ringgit non-deliverable interest rate swaps clearing are some recent developments that have supported banks in growing their participation in global derivatives markets. This collaboration with CMU OmniClear Limited enables LCH Limited to deliver advanced risk management and capital efficient solutions to users of key CNH-denominated instruments.
Susi de Verdelon, CEO, LCH Limited, said:
"We are delighted to partner with CMU OmniClear, and our clearing member banks and customers, as we embark on our ambitious plans to expand our services to market participants who want to trade and settle deliverable CNH derivatives and debt securities globally. The APAC region continues to be a strategic focus for LCH, and we look forward to continued partnership as a greater number of financial institutions benefit from the margin, capital, and operational efficiencies that our services deliver.”
Stanley Chan, Chief Executive Officer, CMU OmniClear Limited, said:
"The collaboration between CMU OmniClear and LCH demonstrates the strong demand from global investors for CNH-denominated debt securities, derivatives and related risk management tools. It also highlights the unparalleled role of Hong Kong’s payment and settlement infrastructure in supporting investment in CNH-denominated debt securities by investors from all over the world. We are pleased that CGBs held in Hong Kong’s central securities depository infrastructure will, for the first time, be accepted as eligible collateral outside of Hong Kong. CMU OmniClear will continue to collaborate with market infrastructures, regulators and market participants to extend our service coverage, further consolidating Hong Kong’s role as the international financial centre for Renminbi-related business.”
Andrew Ng, Group Executive and Group Head of Global Financial Markets, DBS Bank, said:
“CNH volumes have grown exponentially in recent years as the currency becomes more internationalised. This is a major development which will support financial institutions across multiple jurisdictions who want to trade CNH derivatives and benefit from the risk and margin efficiencies of clearing. As a leader in Asian financial markets, DBS welcomes developments that strengthen the safety, resilience and depth of the derivatives markets in Singapore and the region. Further, LCH’s expansion of eligible collateral to include Chinese Government Bonds will be a particularly important step in the development of the CNH derivatives market.”
Cheuk Wong, Head of Markets and Securities Services, Hong Kong, HSBC, said:
"We are excited by LCH's new CNH clearing services, which we believe will significantly expand the use of CNH derivatives in international markets. This development marks an important step in market maturity and aligns with our commitment to enhance market liquidity while supporting the use of Chinese Government Bonds as collateral and CNH as an international funding currency. We expect our clients to welcome a more efficient CNH derivatives market as the internationalisation of the renminbi continues to gain momentum.”
Wang Huabin, Deputy Chief Executive, Bank of China (Hong Kong) (“BOCHK”), said:
“BOCHK welcomes LCH’s inclusion of offshore CNH government bonds as collateral and the introduction of the USD/CNH currency pair on LCH ForexClear. Since 2009, the Ministry of Finance of the People's Republic of China has been issuing CNH government bonds which have expanded the usage scenario for RMB. LCH’s initiatives enable investors to better utilise CNH bond holdings as collateral to improve trading and clearing efficiency, while the introduction of the USD/CNH currency pair will enhance netting benefits and reduce counterparty risk for trading FX products. As a Chinese clearing member of LCH, BOCHK looks forward to partnering with LCH on further innovations in RMB-denominated products, fostering a more integrated global financial landscape.”
Central clearing continues to be a key focus for financial institutions in the Asia-Pacific region. With significant increases in FX Options and FX Forwards trading volumes for the Chinese Yuan, LCH anticipates substantial demand among financial institutions to clear this currency, as they look to benefit from robust risk management and capital efficiencies. Furthermore, LCH has significantly expanded its presence in APAC across both its ForexClear and SwapClear services, with 24 direct members and over 180 clients, reflecting a 31% and 24% year-on-year growth in number of trades cleared in Q1, respectively.
Learn more about LCH here: LCH Post Trade Services | LSEG
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About LCH
LCH builds strong relationships with credit, digital asset derivatives, equity, fixed income, foreign exchange (FX) and rates market participants to help drive innovative performance and deliver best-in-class risk management.
As a clearing member or client, partnering with us helps you increase capital and operational efficiency, while navigating an expanding and complex set of cross-border regulations, thanks to our experience and expertise.
In partnership with our stakeholders, we have helped the market transition to central clearing and continue to introduce innovative enhancements. Choose from a variety of solutions such as compression; sponsored clearing; credit index options clearing; contracts for differences clearing; and digital asset derivatives clearing. Our focus on innovation and our uncompromising commitment to service delivery makes LCH, an LSEG business, the natural choice of some of the world’s leading market participants globally.
About LSEG
LSEG (London Stock Exchange Group) is a leading global financial markets infrastructure and data provider, playing a vital social and economic role in the world’s financial system.
With our open approach, trusted expertise and global scale, we enable the sustainable growth and stability of our customers and their communities. We are dedicated partners with extensive experience, deep knowledge and a worldwide presence in data and analytics; indices; capital formation; and trade execution, clearing and risk management across multiple asset classes.
LSEG is headquartered in the United Kingdom, with significant operations in 65 countries across EMEA, North America, Latin America and Asia Pacific. We employ over 26,000 people globally, more than half located in Asia Pacific.
LSEG’s ticker symbol is LSEG.
