Pilot project to allow HK-Malaysia investment and settlement

PETALING JAYA: The Hong Kong Monetary Authority (HKMA), Bank Negara and Euroclear Bank has launched a pilot platform for cross-border investment and settlement of debt securities in a move to enhance efficiency and strenghten capacity for transactions in Asia.

Source from (The Star Online): http://biz.thestar.com.my/news/story.asp?file=/2012/3/14/business/10910279&sec=business
Published: March 14, 2012

The parties said in a joint press release that the platform, which would be operational from March 30, would strengthen foreign investment and cross-border issuance of local bonds in Hong Kong and Malaysia.

“Through the pilot platform, investors in Hong Kong and Malaysia can buy and hold foreign debt securities and settle cross-border transactions on a delivery-versus-payment (DvP) basis while local and international bond issuers can issue a wide range of debt securities,” they said, adding that the platform would include a comprehensive database of Asian debt securities maintained by Euroclear Bank.

HKMA chief executive Peter Pang said the alliance went beyond commercial cooperation and would bring about more significant benefits in fostering global and regional bond market development as well as promoting financial stability in the region.

“The HKMA will continue to collaborate with Bank Negara and Euroclear Bank to promote the pilot platform to other central banks and securities settlement systems in the region and implement additional services to meet market needs,” he said.

Bank Negara deputy governor Datuk Muhammad Ibrahim said the implementation of the platform would be an important step towards sustaining growth and development in a region of ongoing growth.

“The rollout of the pilot platform provides investors and market intermediaries an efficient and cost-effective cross-border access to the bond markets in Malaysia and Hong Kong,” he said.

Meanwhile, Euroclear managing director and head of business development Anso Thir said the bank had strong ties with the Asia-Pacific region and looked forward to working with other Asian markets on their settlement, collateral management and corporate action processing challenges.