MANILA, Philippines - The Hongkong and Shanghai Banking Corp. (HSBC) has been mandated as the sole offshore renminbi (RMB) concentration bank for LME Clear, the clearing house for the London Metal Exchange (LME) market.
This will facilitate LME Clear to accept RMB as eligible cash collateral from its members for margin cover purposes.
HSBC has also been appointed as one of LME Clear’s RMB Settlement Banks.
Recently, LME Clear accepts RMB as eligible cash collateral, following regulatory approval from the Bank of England.
Previously, LME Clear only accepted US dollar, Euro, GBP and Japanese yen as cash collateral.
Kee Joo Wong, HSBC’s Head of Payments and Cash Management in Asia Pacific, considered it a landmark deal, which further showcases the extent to which RMB is becoming a truly global currency.
“This deal evidences HSBC’s strong understanding of RMB and the clearing processes in Hong Kong and the central counterparty (CCP) industry, as well as the bank’s long term relationship with the Hong Kong Exchanges and Clearing Limited,” Kee said.
He added that partnering with LME Clear in this concentration and settlement process was a natural development of our international RMB capabilities and cements our position as the leading international bank for RMB.
HSBC is an associated broker clearing member of LME, where the bank is entitled to issue LME contracts, and can trade on LME’s electronic platform, LMEselect, as well as the telephone market.
HSBC has been a champion of RMB internationalization since the beginning of its historic process.
HSBC established RMB trade capabilities in over 50 markets globally, was the first international bank to settle RMB trade in six continents, and has been at the forefront of the regulatory developments within and beyond China.