The Mainland and Hong Kong regulators established mutual access arrangements between the interest rate swap markets of the two places (Swap Connect) in May 2023. For the first time, it introduces mutual access in the realm of derivatives products. Northbound trading has been launched in the initial phase of Swap Connect, facilitating international investors holding Mainland bonds to manage their interest rate risks. To further promote the co-ordinated development of financial derivatives markets in the Mainland and Hong Kong, measures were introduced to enhance Swap Connect in May 2024, which expand the choice of products under Swap Connect, enhance the efficiency of the mechanism and reduce participation costs, thereby further addressing the diverse risk management needs of domestic and foreign investors.
