Clearstream announced today that it will join the Hong Kong Exchanges and Clearing Limited (HKEx) Ecosystem initiative as a founding member.
The Ecosystem is an innovative approach to data management services that is designed to provide eligible participants from across the spectrum of financial and securities markets with access to HKEx market data, trading and clearing systems. Via this single connectivity hub, Ecosystem participants will also be able to connect more efficiently with each other within a secure and monitored environment.
Customers of Clearstream that are also participants at the HKEx will benefit from improved connectivity to the Clearstream systems once the Ecosystem goes live in the fourth quarter of 2012. Clearstream will be the first international central securities depository (ICSD) to participate in the Ecosystem initiative, offering HKEx participants global access for issuance, settlement and custody of securities, as well as investment fund services and global securities financing.
With its experience as a domestic central securities depository (CSD), an international central securities depository (ICSD) and its connections with both the Luxembourg CSD LuxCSD and as one of 10 joint venture partners in the CSD joint venture Link Up Markets, Clearstream has unique expertise to contribute to the development of post-trade infrastructures within the Asia-Pacific region. The agreement to participate in the HKEx's hosting services is part of Clearstream's Asia strategy to become the preferred international post-trade services provider in the region.
Clearstream has a long-standing presence in Asia: the company opened its first office in the region in Hong Kong in 1990. Clearstream also has representative offices in Dubai (since 1995) and Tokyo (since 2007) and a branch in Singapore (since 2009) - the company's operational hub for the region. Clearstream offers access to the following markets in Asia: Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand. About 20 percent of Clearstream's revenues currently come from Asia.
Clearstream has the largest settlement network amongst international central securities depositories (ICSDs) with settlement links to 52 domestic markets around the globe: 33 in Europe, 6 in the Americas, 10 in the Asia Pacific region and 3 in Middle-East and Africa. This network enables counterparties in local markets to efficiently settle eligible securities through Clearstream's operational hubs in Luxembourg and Singapore.
International central securities depositories such as Clearstream were set up in the 1970s to provide settlement and custody services for Eurobonds. In recent years, they have established settlement links to dozens of local markets and settlements of trades in domestic securities - primarily European government bonds - account today for a significant portion of the ICSD revenues. Settlement links enable ICSD participants to settle trades with other participants in the same ICSD, with participants in the other ICSDs, or with local market participants. Clearstream has evolved from being a pure Eurobond house to holding equity, funds, structured products and commodities.