China to Expand Global Investors’ Access to Its Financial Derivatives Market

Authorities on the Chinese mainland and Hong Kong announced Monday that they will jointly launch a “Swap Connect” program in six months, to allow offshore investors a wider access to the mainland interest rate swap (IRS) market.

The plan comes as China bolsters efforts to further open up its financial market to overseas investors. As offshore investors become more active in trading Chinese bonds, their demand for derivatives to manage risks of fluctuating interest rates has grown.