The Hong Kong Special Administrative Region government has pledged to drive high-quality development of the SAR’s financial market by building a diversified asset settlement platform that can facilitate cross-product, cross-market, and cross-sector collateral interoperability. This will help to attract global capital inflows to add depth to the domestic capital market and make it more comprehensive.

The Hong Kong SAR government on Wednesday announced that Hong Kong Exchanges and Clearing, the operator of the Hong Kong Stock Exchange, will become a strategic shareholder of CMU OmniClear Holdings by injecting more than HK$400 million ($51.2 million) into acquiring a 20 percent stake in the company, while the Hong Kong Monetary Authority will own the remaining 80 percent stake.

CMU OmniClear Holdings was established by the HKMA’s Exchange Fund in October this year and wholly owned CMU OmniClear. CMU OmniClear was set up in 2024 to carry out the operations and business development activities of Hong Kong's central securities depository infrastructure, the Central Moneymarkets Unit (CMU) system, on behalf of the HKMA.

Financial Secretary Paul Chan Mo-po, who attended the signing ceremony on Wednesday, said the cooperation will attract capital inflows into the local capital market. Global investors find the securities custody infrastructure supporting multiple asset classes and spanning multiple regions can enhance investment efficiency and flexibility, enabling them to achieve better returns.  

ALSO READ: HKEX sees record surge in listing applications

Also, by establishing comprehensive collateral platforms that help market participants better conduct hedging and risk management, the strategic cooperation will unlock liquidity, promote product innovation, and enhance Hong Kong's function as a risk management center, Chan said. The infrastructure will also reserve space for digital assets transactions and custody, such as tokenized bonds and stocks.

The finance chief said that an efficient and comprehensive platform helps lower the barriers and costs for international investors to hold and trade in renminbi assets, thereby encouraging more international capital to be allocated to Chinese assets and contributing to the steady and prudent advancement of renminbi internationalization.

By the end of September, the outstanding value of renminbi-denominated securities lodged with CMU rose to a record-high of around 1.3 trillion yuan ($182.6 billion). As of the second quarter, CMU’s market share in the dim sum bond market in terms of outstanding value was over 80 percent.

READ MORE: HKMA enhances RMB liquidity facilities to support offshore market

This partnership establishes a strong foundation for transforming CMU into a multi-asset class platform that provides investors with one-stop access to equity and debt securities while facilitating efficient two-way investment flows between the Chinese mainland, Hong Kong and international markets, said Eddie Yue Wai-man, chief executive of HKMA and chairperson of CMU OmniClear Holdings.

At the signing ceremony, Yue added that HKMA and HKEX will further explore expanding the securities held in custody by CMU, allowing them to be used as collateral at various clearing houses under the Hong Kong Stock Exchange, and increasing the variety of derivative products to improve risk management tools in the Hong Kong capital market.

The total value of Hong Kong securities and mainland securities under the Bond Connect and Stock Connect mechanisms under HKEX and CMU OmniClear custody exceeds $5 trillion, Chan said.

HKEX Chief Executive Officer Bonnie Chan Yiting noted that, as global investors' interest in Asian markets continues to increase, the Hong Kong Stock Exchange will continue to collaborate with regulators and market participants to enhance Hong Kong's competitiveness in bond fundraising, risk management, and renminbi business, which will strengthen Hong Kong's status as an international financial center.

Through the partnership, the HKMA and the HKEX will harness their combined resources, technology, talent, and market expertise to facilitate the development of Hong Kong's post-trade securities infrastructure into a major central securities depository (CSD) in the region.

This collaboration will also support the continued commercialization of CMU and the pursuit of business development initiatives in areas such as the expansion of its investor CSD services, asset classes coverage and collateral management services, with the goal of enhancing cross-asset class efficiency in Hong Kong.