ASX today announces that it has launched a renminbi (RMB) securities depository service. The new service extends the portfolio of RMB services developed by ASX in cooperation with the Bank of China Limited, Sydney Branch (Bank of China) for Australia’s financial markets. ‘
The depository service enables issuers to issue RMB-denominated securities directly into Austraclear and for Austraclear participants to settle and hold RMB-denominated securities in Austraclear.
Austraclear, a wholly owned ASX subsidiary, is Australia’s settlement system and central securities depository for the wholesale debt market. Its systems provide customers with secure and guaranteed delivery of cash or securities, and efficient electronic registration and record-keeping of transactions.
Since July 2014, Austraclear has supported RMB cash settlement by providing real-time straight-through-processing links to Hong Kong (via CHATS RTGS), mainland China (via CNAPS) and the rest of the world (via CIPS). Now, Austraclear will provide full end-to-end support: the issuance, settlement and holding of RMB denominated securities as well as cash.
ASX CEO Mr. Dominic Stevens said Australia has a large and deepening trading and financial relationship with China, underpinned by the China-Australia Free Trade Agreement that came into force in December 2015:
“ASX is pleased to extend its RMB capabilities to match the growing importance of Australia as a financial hub for RMB in the Asia Pacific. The services support Australia’s extensive trading relationships with China and enable issuers to access the investor demand in Australia for RMB securities,” Mr Stevens said.
The Premier of New South Wales Mr. Mike Baird said the Government would promote Sydney’s RMB capabilities:
“I led the push for Sydney to become an offshore settlement hub for the Chinese currency and support this latest milestone that encourages Australian firms to do business with China,” Mr Baird said. “We have a goal for 20 per cent of the state’s goods trade with our largest trading partner to be settled in RMB by 2020 and this new service will assist in reaching that target.”
Bank of China General Manager and Country Head of Australia Mr. Shanjun Hu said:
“We are delighted to partner with ASX to continuously enhance the capability of RMB clearing and settlement for clients and counterparties in Australia. We believe this joint initiative provides issuers and Austraclear participants with a sophisticated depository service to capitalise on the benefits of the growing RMB market.” In November 2014, the Bank of China was appointed the official RMB clearing bank in Australia by China’s central bank and is active in providing RMB products to corporates and financial institutions.