Dear Deputy Governor Liu Shiyu, deputy mayor Mr. Tu, leaders, distinguished guests, ladies and gentlemen: 

 

Hello everybody morning! 

 

Thank you for participating in focus RMB interest rate swap clearing business conference. Liu thanked the governor, the mayor Tu passionate speech and certainly Shanghai Clearing work! Thank you for your concern and support for the Shanghai Clearing House!  RMB interest rate swap rates centralized clearing is the first developed by Shanghai Clearing derivatives central counterparty clearing business focus. Governors and mayors as Mrs Tu said, while centralized clearing RMB interest rate swap will effectively reduce the liquidation costs, improve market efficiency, mitigate systemic risk, interest rate reform services and support to build Shanghai into a global product pricing and RMB clearing center.

 

Shanghai Clearing focus on interest rate swap clearing business very seriously, business R & D in 2011, spent more than two years of preparation business and technical systems, approved by the People's Bank, today officially launched. RMB interest rate swap clearing business to focus without changing the existing trading patterns, the focus is Shanghai central counterparty clearing, centralized clearing and risk management, there are four characteristics. 

 

First, more than 90% of the interest rate swap transactions can be incorporated into centralized clearing, including contract duration in 5 days (inclusive) to 5 years (inclusive), and floating reference rate for the end SHIBOR overnight, SHIBOR three and seven-day repurchase fixing the interest rate and other three varieties. Meanwhile, the stock of contracts that meet the above criteria can also be incorporated into centralized clearing. 

 

Second, the existing interest rate swaps participating institutions are eligible to apply to participate in centralized clearing business. Currently, the agency's former business volume in the top 50, there are 42 organizations submitted a business application, the 21 agencies for completion of all formalities, other agencies will participate in batches centralized clearing of interest rate swaps. 

 

The third is to create a central clearing house to Shanghai centralized counterparty clearing mechanism, unified standard market risk exposure and interest calculations, an effective solution to the credit limit on the amount of bilateral clearing mode, to better guard against systemic risk in financial markets maintain financial market stability. 

 

Fourth is to generate daily interest rate swap market yield curve generally recognized, the effective realization of marking to market, accurate calculation of the contract value, market institutions can participate in this curve, the transaction pricing and product valuation services the interest rate market. 

 

After the introduction of interest rate swap clearing business focus, Shanghai Clearing House will do a solid job of business operations management, strengthen risk control, improve market services, and effectively protect business and system safe and stable operation. Meanwhile, the Shanghai Clearing House will accelerate the development of clearing agent, and the interest rate swap contract period of expansion, and strive business coverage to all market participants and all transaction types. On this basis, further establish and improve the foreign currency, multi-product, cross-market central counterparty clearing services centralized system to better support market discipline management, improve market transparency and guard against systemic risk, to service innovation and reform and development of financial markets, support the construction of Shanghai international financial center. 

 

Thank you!