CME Group To Accept Offshore Yuan As Collateral For Futures Trades
December 04 2011 - 9:39PM
Dow Jones News
CME Group Inc. (CME) will accept offshore Chinese yuan as
collateral on all futures products it clears, the exchange operator
said Monday.
CME said HSBC Hong Kong will serve as its first clearing
custodian in the Far East. CME customers will be able to hold yuan
traded offshore, also known as CNH, at HSBC and use those deposits
as collateral for futures trades.
"As our business in Asia grows, we are looking at ways to
provide services that fulfill the needs of our increasingly diverse
customer base," said Kim Taylor, president of CME Clearing.
It's the latest effort by Chicago-based CME, a major player in
commodities futures, to expand its presence in the $4
trillion-a-day currency markets. Yuan deposits in Hong Kong have
swelled over the past year as China has permitted greater yuan
trade offshore, but deposits shrank in October for the first time
in two years.
CME just weeks ago rolled out new yuan futures contracts modeled
on non-deliverable forward contracts traded among banks and
investment firms. The exchange operator is still in the process of
getting systems into place that will allow for automated trading of
those contracts, after which it expects volume to pick up, a CME
Group spokesman said.
-By Martin Vaughan, Dow Jones Newswires; +65 6415 4033;
martin.vaughan@dowjones.com
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