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 Transaction, which is a typical OTC financial derivative, means that the option buyer acquires the right of buying or selling a certain volume of FX assets at an agreed exchange rate in the future by paying an option premium to the seller. 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.
SHCH is the first CCP offering OTC FX Option clearing service in the world, which symbolizes that China's construction of financial market infrastructures is well-ranked internationally. The launching of FX Option CCP clearing would be conducive to enhance the transparency of FX derivatives market, strengthen the risk monitor and control for FX transactions, effectively lower the cost of clearing participants, promote the margin use efficiency, and can further improve the clearing system in interbank FX market to enable FX market systemic risk prevention covering all active transaction products.
