Recently, the People's Bank of China issued the Announcement of the People's Bank of China (2023) No. 8. The announcement pointed out that in order to standardize the business related to the interconnection cooperation between the Mainland and Hong Kong interest rate swap market, protect the legitimate rights and interests of domestic and foreign investors, and maintain the order of the interest rate swap market, the People's Bank of China formulated the Interim Measures for the Administration of the Interconnection Cooperation between the Mainland and Hong Kong Interest Rate Swap Market (hereinafter referred to as the "Measures"), which will come into force on April 28, 2023.

According to the Measures, the "swap line" refers to the mechanism arrangement for domestic and foreign investors to participate in Hong Kong's financial derivatives market and the Mainland's interbank financial derivatives market through the connection between Hong Kong and Mainland infrastructure institutions.

These Measures apply to the "Northbound Swap Connect", that is, overseas investors in Hong Kong and other countries and regions participate in the Mainland's inter-bank financial derivatives market through the mechanism and arrangement of interconnection between Hong Kong and the Mainland's infrastructure institutions in terms of trading, clearing, settlement, etc. The relevant provisions on "Southbound Interchange Link" shall be formulated separately.

The initial tradable varieties of Northbound Swap Connect are interest rate swap products. The quotation, trading and settlement currency of the Northbound Swap Line interest rate swap is RMB. The "Northbound swap Connect" implements quota management and timely adjustments according to market conditions.

Managing Editor: Yang Xiting