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LCH and CMU OmniClear Partner to Enhance Global CNH Derivatives Clearing and Settlement
LCH Limited, an LSEG company, and CMU OmniClear Limited, a wholly-owned subsidiary of the Exchange Fund of Hong Kong, have signed a Memorandum of Understanding (MOU) to collaborate on advancing clearing and settlement solutions for CNH (offshore Chinese Yuan) derivatives. This strategic partnership aims to boost liquidity, capital efficiency, and risk management for international investors trading CNH-denominated instruments.
Under the terms of the MOU, LCH will extend its ForexClear service to include the clearing and settlement of CNH FX Options, Forwards, Swaps, and Spot transactions, leveraging Hong Kong’s Payment versus Payment (PvP) settlement infrastructure. This will enable full multilateral netting and guaranteed settlement, which is expected to remove significant barriers to increased trading activity in CNH products. Subject to regulatory approvals, the new CNH offering is anticipated to go live in the first half of 2026.
A key aspect of this collaboration also involves facilitating the acceptance of CNH-denominated Chinese government bonds (CGBs) held in custody through Hong Kong’s Central Moneymarkets Unit (CMU) as eligible collateral for LCH clearing members. This move will allow international investors to manage their CNH bond holdings more efficiently and is a significant step in promoting wider acceptance of Chinese bonds as eligible collateral in international markets. LCH had previously begun accepting USD and EUR-denominated CGBs.
The partnership underscores the growing demand from global investors for CNH-denominated debt securities and related risk management tools. It also reinforces Hong Kong’s role in Renminbi internationalization and supports LCH’s strategy to enhance margin and capital efficiency in the Asia-Pacific region. Both parties have also indicated a willingness to explore the inclusion of other currencies based on market adoption and demand.

Video courtesy of KDPW

Video courtesy of KDPW