On 18th Dec 2017, the Cross Border FX Seminar was successfully held in Shanghai by Shanghai Clearing House (SHCH), with two co-organizers, China Construction Bank (CCB) and UK FX E-trading platform R5FX. Mr. LI Jun, Deputy Director-General of Shanghai Financial Services Office delivered speech in the Seminar, and Mr. SHEN Wei, Deputy General Manager of SHCH, made a keynote speech.


Mr. LI Jun, Deputy Director-General of Shanghai Financial Service Office, made a presentation of the achievements of Shanghai international financial center construction and the exchanges and communication between Shanghai and London, appreciating the positive role SHCH plays in the progress of Shanghai international financial center construction. He pointed out that the cross-border FX clearing service promoted by SHCH could act as a bridge, helping domestic financial institutions in Shanghai to go abroad, deepening the depth and broadening the breadth of their involvement in the global market, and in the meanwhile, attracting overseas participants to come in, so as to further enrich the Shanghai financial elements market.


On the Seminar, SHCH Deputy General Manager SHEN Wei made a brief introduction of SHCH, a qualified CCP that always bears in its mind the international strategy and international standards, and explained in details about its future plan of the CCP clearing service for cross-border FX services, and addressed the questions of great interest to the market participants. He stated that given the acceleration of “bringing in” and “going out” of China’s financial market, cross-border FX clearing service provides a safe and efficient clearing channel to the market participants. He hoped that the cross-border FX clearing service would be popular in the global market, and through the business, Chinese and British financial markets as well as the global FX market can be further promoted.


The seminar focused on the CCP clearing service for cross-border FX transactions that SHCH is about to launch. Li Jun, General Manager of China Construction Bank Interbank Development Division, delivered a speech as a representative of the market institutions. He expressed his gratitude to SHCH for contribution in exploring the link between financial markets, and affirmed the role of cross-border FX clearing service in promoting Chinese institutions to participate in the global FX market. Representatives from SHCH, R5FX, CCB, United Overseas Bank, and Guotai Junan Securities made detailed introduction and discussion from the aspects of business procedures and participation models of the clearing service, and also addressed the questions of some market players. Over a hundred representatives from commercial banks, security firms and financial infrastructure operating institutions attended the Seminar.


The cross-border FX clearing service refers to receipt of certain cross-border FX transactions reached on R5FX, the UK-based platform and accordingly, the CCP clearing service provided by SHCH for these transactions. The participants include not only Chinese institutions, but also overseas commercial institutions with FX trading capacity. The initial products that are going to be released include three currency pairs, namely EUR/USD, GBP/USD and USD/HKD. In the future, more currency pairs and derivative products will be included at due time.


The Policy Outcomes of the 9th UK-China Economic and Financial Dialogue (EFD) which took place on 15th-16th Dec stated that, “Both sides welcome the agreement reached between Shanghai Clearing House and R5, a London based capital market Fintech enterprise, to reach agreement on creating a Cross Border FX Clearing Solution.” The cross-border FX clearing service is the latest practice of SHCH to implement the outcomes of EFD, and to explore the cross-border FX market for the domestic financial institutions. It facilitates the trading, clearing, settlement and risk management for the market participants at home and abroad by credit extention, real-time order-taking, margin management and connect of domestic Chinese and foreign settlement banks, which can further enhance the FX trading scale.