HKEX to Enhance Swap Connect with Extended Tenor and New Rate Options

Hong Kong Exchanges and Clearing Limited (HKEX) has welcomed regulatory approvals to expand Swap Connect, a cross-border derivatives program linking Hong Kong and mainland China. The enhancements will allow international investors to better hedge interest rate risks on their RMB holdings.

OTC Clear, HKEX’s clearing arm, will collaborate with mainland counterparts to introduce 30-year interest rate swaps and add the 1-year Loan Prime Rate (LPR 1Y) as a floating reference option. These changes significantly broaden the risk management toolkit available through Northbound Swap Connect.

The MOVE signals deepening financial integration between Hong Kong and mainland markets, providing institutional investors with more sophisticated instruments to navigate China’s interest rate environment. Market participants anticipate the changes will increase foreign participation in China’s bond markets.