HSBC has been mandated as the sole offshore RMB concentration bank for LME Clear, the clearing house for the London Metal Exchange (LME) market. This will facilitate LME Clear to accept RMB as eligible cash collateral from its members for margin cover purposes. HSBC has also been appointed as one of LME Clear’s RMB Settlement Banks.
Recently, LME Clear announced that it now accepts RMB as eligible cash collateral, following regulatory approval from the Bank of England. Previously, LME Clear only accepted USD, Euro, GBP and Japanese Yen as cash collateral.
Kee Joo Wong, HSBC’s Head of Payments and Cash Management in Asia Pacific, commented on the mandate: “This is a landmark deal which further showcases the extent to which RMB is becoming a truly global currency. This deal evidences HSBC’s strong understanding of RMB and the clearing processes in Hong Kong and the central counterparty (CCP) industry, as well as our long term relationship with the Hong Kong Exchanges and Clearing Limited and the value we can add to LME and its customers. Partnering with LME Clear in this concentration and settlement process is a natural development of our international RMB capabilities and cements our position as the leading international bank for RMB.”
HSBC is an associated broker clearing member of LME, whereby the Bank is entitled to issue LME contracts, and can trade on LME’s electronic platform, LMEselect, as well as the telephone market.
Trevor Spanner, CEO of LME Clear commented on HSBC’s appointment: “LME Clear is delighted to have HSBC on board as we respond to growing demand from members for renminbi-related services.”
HSBC has been a champion of RMB internationalisation since the beginning of its historic process. The Bank has established RMB trade capabilities in over 50 markets globally, was the first international bank to settle RMB trade in six continents, and has been at the forefront of the regulatory developments within and beyond China.