In 2016, SHCH launched three innovative CCP clearing services, i.e., FX Option CCP clearing in foreign exchange derivatives market, Shanghai Emission Allowance Forward (in trial operation) CCP Clearing and CNY Copper Swap CCP Clearing in commodity derivatives market, thereby having further strengthened the CCP clearing service system in OTC financial market. In 2016, the amount of clearing business reached 219.4 trillion yuan, among which the CCP clearing amount was 65.4 trillion yuan.
In 2016, SHCH further diversified financial products under its custody. On April 7th, SHCH completed the registration and custody of first non-financial enterprise green debt financing instrument, the Medium-term Notes 2016 (series 1) of Concord Wind Power Investment Co., Ltd, to continuously expand green industrial financing channel. On June 21st, SHCH completed the registration and custody of first trust-type asset backed note, the Trust-Type Asset Backed Notes 2016 (series 1) issued by Far Eastern Leasing, to broaden enterprise financing channel. On September 2, SHCH finished the registration of first SDR bond in China, the 2016 SDR Denominated Bonds (Series 1) issued by World Bank (International Bank for Reconstruction and Development), to help RMB internalization progress. On September 23rd, SHCH officially launched FTZ over-the-counter bond service, offering new asset configuration channel for FTZ investors and foreign investors. In 2016, SHCH had 20,900 newly added custody products with the amount of 18.35 trillion yuan, paid principal 14.58 trillion yuan. Custody balance by the end of 2016 was 14.42 trillion yuan for 15,100 products.
FX Option CCP Clearing
SHCH officially enrolled USD/CNY European Option with maturity within 1 year into CCP clearing on August 15, 2016, thereby becoming the first clearing institution offering CCP clearing service for
OTC FX Option across the world. FX Option CCP clearing is: FX Option Transaction executed between clearing participants, after being submitted to SHCH and having passed the relevant compliance and risk management check, is novated by SHCH; then, SHCH conducts risk management for FX Option Transaction, and finishes the netting and settlement for option premium and transactions or cash--flows generated by option exercising.
CNY Copper Swap CCP Clearing
SHCH officially launched CNY Copper Swap CCP clearing service on July 18, 2016. CNY Copper Swap (CUS) is an OTC commodity derivative with the Shanghai Metals Market (SMM)'s 1# Refined Copper price index as the underlying asset, settled in cash, and denominated, cleared and settled in CNY. CUS is a fundamental hedging tool for relevant enterprises in the real economy to mitigate market risks related to domestic copper price fluctuation.
Shanghai Emission Allowance Forward (SHEAF) CCP Clearing
On December 19, 2016, SHCH started the trail operation of Shanghai Emission Allowance Forward (SHEAF) CCP Clearing. Shanghai Emission Allowance Forward (SHEAF) is a forward agreement with the Shanghai Emission Allowance as the underlying asset, denominated, cleared and settled in CNY. It is the first which is green financial derivative product in China and fill the blank of China's green financial derivative market.
FTZ Over-the-counter Bond Services
On September 23, 2016, SHCH officially launched FTZ over-the-counter bond services, providing new asset configuration channel for FTZ and foreign investors. FTZ OTC Bond Service is an important component of FTZ cross-border RMB bond service. Recorded undertaking institutions may sell RMB bonds over-the-counter of its branches in FTZ to FTZ investors and foreign investors who have opened FTZ OTC bond accounts, and offer market making and secondary custody service. As the CSD, SHCH is responsible for general registration and daily monitoring.
Service Object
By the end of 2016, SHCH has 12 General Clearing Members. As for Client Clearing Services has been go-live by SHCH, there are 6 Bond General Clearing Members, 5 IRS General Clearing Members, 4 Standard Bond Forward General Clearing Members, 9 FX General Clearing Members, and 6 Commodity Derivatives General Clearing Members. There are 32 Class A members, 18 Class B members and 27 Class C members.
By the end of 2016, SHCH serves 4,084 issuers and 14,472 investors, including 3 policy banks, 1499 deposit financial institutions, 152 nonbanking financial institutions, 148 securities companies,18 fund management companies,106 insurance companies,103 corporate entities of non—financial institutions,120106 non-corporate products and 337 foreign investors.
