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Philip Hammond Announces R5-Shanghai Clearing House Link-Up

Posted on 9th January 2018 in R5FX Ltd

RichardHammond

Media Coverage – Philip Hammond Announcement

Updated 19 December, 2017

FT

https://www.ft.com/content/c9217794-e0f8-11e7-8f9f-de1c2175f5ce

Philip Hammond opens London forex markets to China banks

December 15

Chinese banks will have direct access to foreign exchange markets in London under plans that UK chancellor Philip Hammond will announce on Saturday during a two-day visit to Beijing.

The initiative is intended to open a new channel for trading the renminbi in London, supporting the internationalisation of the Chinese currency and bringing new business to London’s financial markets as they prepare for Brexit.

The UK government described Mr Hammond’s trip to Beijing as part of “a new phase in the Golden Era of UK-China relations”, with more than £1bn in trade and investment deals set to be agreed over the weekend. Mr Hammond is also due to sit down with Ma Kai, the Chinese vice-premier, during the visit.

The UK government said both sides would use the meeting to reaffirm their commitment to “a deeper trade and investment relationship as the UK builds an economy fit for the future”.

The foreign exchange initiative will give Chinese banks direct access to the “spot” foreign exchange market in London, with trades guaranteed by Shanghai Clearing House. The set-up will provide an alternative to current arrangements, where Chinese and foreign banks deal directly with each other on the “over-the-counter” market.

“The OTC market works perfectly well if you are a Commerzbank or a Credit Suisse trading with each other,” said Jon Vollemaere, chief executive of R5, the London-based fintech firm that will provide the trading platform for Chinese banks. “But if you are a rural Chinese bank, it doesn’t work.

“This creates a very big alternative for [Chinese banks] and will enable them to build relationships with multiple banks around the world,” he added.

Mr Vollemaere described giving Chinese banks direct access to foreign exchange markets in London as “currency connect”.

“Following Stock Connect and Bond Connect, which have worked nicely, this is the next stage,” he said, referring to previous initiatives that gave foreign investors access to China’s equity and bond markets.

The foreign exchange scheme, which will begin trading next week, will initially allow Chinese banks to trade the US dollar for sterling, the euro and the Hong Kong dollar. Eventually — subject to approval by the Chinese central bank — the scheme will allow trading of the offshore renminbi and other currencies.

Beijing’s efforts to establish the renminbi as an international currency have faltered in recent years, despite the Chinese government’s success last year in persuading the International Monetary Fund to add the renminbi to its special “drawing rights” basket, joining the dollar, euro, yen and pound.

Many analysts had expected the renminbi to become more widely used in trade and other transactions after the IMF’s move. But data from Swift, the global bank payment messaging network, show renminbi’s share of international payments fell to just 1.46 per cent in October, down from 1.92 per cent a year earlier, leaving it far behind the dollar, with 39.5 per cent of payments, and the euro, with 34 per cent.

Sue Trinh of RBC Capital Markets blamed Beijing’s “heavy-handed intervention across the financial markets” for eroding the renminbi’s international appeal. The Chinese government has stepped in to control capital flows and limit the supply of credit in China’s economy following a stock market crash in 2015.

FT

https://www.ft.com/content/07a05ac2-e238-11e7-97e2-916d4fbac0da

David Cameron takes senior role in China infrastructure fund

December 16
David Cameron is to take a leadership role in a $1bn investment fund set up to back China’s Belt and Road infrastructure initiative.

The state-endorsed fund will be led by private institutions in UK and China and employ the former UK prime minister in a leadership role that has yet to be defined.

The fund was announced among a raft of new investment agreements finalised during a two-day visit to Beijing by UK Chancellor Philip Hammond as part of efforts to boost global trade ties before the UK leaves the EU in 2019.

Mr Cameron revealed in September that he had discussed a UK-China fund with vice-premier Ma Kai during a trip to Beijing. Mr Cameron has kept a low profile since leaving office last July following the Brexit vote. He has not taken major commercial or diplomatic roles, instead opting to campaign on Alzheimer’s and chair a commission into the effectiveness of aid spending.

The fund and other investment agreements are intended to kick off what both countries called a new phase in the golden era of UK-China relations.

“The China-UK relationship is one of the most important bilateral relationships in the world,” said Mr Ma, part of reassurances from both sides intended to allay worries that ties between the two counties would diminish once the UK exits the EU in March 2019.

Mr Hammond said the UK had committed to avoiding a cliff edge when it leaves the EU. “We’re committed as a result of the agreement we’ve made this week to creating an environment which will effectively replicate the current status quo so businesses can continue trading as they do now, borders will operate as they do now, and financial services will carry on conducting business across the board as they do now,” he said.

The UK has been seeking greater engagement with Chinese financial institutions, and among the agreements announced on Saturday was a direct channel for trading China’s renminbi in London’s foreign exchange markets. R5, a London-based fintech firm, will provide the trading platform for Chinese banks.

There was no word from either side on a launch date for the Shanghai-London Stock Connect. When it was announced in 2015, the connect faced challenges on how to bridge the eight-hour time difference between China and the UK.

China and the UK had “accelerated final preparation” on the connect, said Mr Hammond, and the two countries would begin feasibility studies by allowing companies in each market to list depositary receipts in each other’s market.

The bulk of the trade agreements announced this weekend are pegged to Belt and Road infrastructure, a project to revamp Silk Road commerce between Asia and Europe. UK Export Finance, the export credit agency, will support up to £25bn in BRI projects across Asia.

The UK also unveiled a $50m matching contribution with China for the Asian Infrastructure Investment Bank to expand operations into less developed countries.

The $100bn AIIB was begun in 2015 as China’s equivalent to the World Bank, with the UK as the first western nation to pledge support.

Mr Hammond announced the appointment of Douglas Flint, the former group chairman of HSBC, as the UK Treasury’s Belt and Road envoy, as well as the establishment of as new UK-led BRI expert board to guide investment.

“China and the UK have a very close fit, where China has huge manufacturing and construction capability and huge pools of capital available,” Mr Hammond said. “Whereas UK has great expertise in project finance and legal skills.”

Sina

http://finance.sina.com.cn/roll/2017-12-16/doc-ifyptfcn1183434.shtml

Reports on Policy Outcomes – including R5 SHCH

Finextra

https://www.finextra.com/pressarticle/72008/uk-chancellor-announces-formation-of-r5-shch-connect-between-shanghai-and-london/wholesale

UK Chancellor announces formation of R5-SHCH Connect between Shanghai and London

The UK Chancellor of the Exchequer, Philip Hammond, has formally announced the formation of R5-SHCH Connect, a partnership between R5, the London FinTech leading the digital transformation of Emerging Markets Foreign Exchange trading, and the Shanghai Clearing House, the financial market infrastructure, established to clear and settle China’s financial products.

During last week’s UK-China Economic and Financial Dialogue, Chinese Vice-Premier Ma Kai met with the Chancellor in Beijing. At the conclusion of the meeting, a series of financial trade agreements were announced, including R5-SHCH Connect, a financial market infrastructure that connects banks in China directly with the London FX market. R5-SHCH Connect demonstrates the close cooperation that exists between the UK and China under the framework of the Belt and Road initiative, and is a direct result of the deepening economic ties between the two countries.

Mr Hammond commented, “As the Renminbi becomes increasingly international, and as China continues to drive forward hugely transformative initiatives, such as the Belt and Road project, I believe that Britain can be China’s natural partner in the West for delivering these ambitious projects.”

Jon Vollemaere, CEO of R5 commented, “R5-SHCH Connect is an infrastructure that enables banks in China to trade FX in London, the largest and most liquid FX market. It is a key component of RMB Internationalisation, and will cement London’s position as the leading global financial centre. This is a great example of the UK and China working in collaboration, with R5 and the Shanghai Clearing House providing complimentary services, and recognising the importance of a strong partnership, to deliver new and innovative services.”

R5-SHCH Connect is an electronic marketplace, which enables banks located in China to trade offshore RMB and other currencies in the London FX market. It acts as a high-speed link between China and London, which provides Chinese banks with increased access to FX trading, enhances liquidity in major currencies and advances the Internationalisation of the RMB.

R5-SHCH Connect reinforces London’s leading position in global FX, in RMB trading, and in FinTech. It reflects the rise of the RMB as a global currency, and demonstrates the next stage of China’s International financial reform, by introducing new financial innovation as part of the Belt and Road initiative.

To date, banks based in China have not been able to trade the offshore RMB easily, but R5-SHCH Connect allows them to access this market for the first time. Institutions already trading in the London market will benefit from additional counterparties and deeper liquidity, provided by new Chinese entrants.

R5-SHCH Connect will launch with 8 Chinese banks connecting to the London FX market, with further onshore Chinese banks being added in early 2018.

The UK government has published Policy Outcomes of the 9th UK-China Economic and Financial Dialogue, which makes further reference to R5-SHCH Connect and to the internationalisation of the RMB, as follows:

“Both sides welcome the agreement reached between Shanghai Clearing House and R5, the London based Capital Market Fintech, to create a Cross Border FX Clearing Solution.”

“Both sides welcome the internationalization of the RMB and recognize London’s vital role in supporting global use of the RMB and facilitating international access to China’s domestic capital market.”

“Both sides agree to continue to promote the China-UK cross-border RMB business and support the use of RMB as the settlement currency in bilateral trade and investment. Both sides support the UK RMB clearing banks to fulfil their role to promote the development of the off-shore RMB market in London.”

Mondo Visione

http://www.mondovisione.com/media-and-resources/news/uk-chancellor-of-the-exchequer-philip-hammond-announces-r5-shch-connect-new-se/

UK Chancellor of The Exchequer Philip Hammond Announces R5-SHCH Connect – New Service Will Connect Banks in China With London’s FX Market

The UK Chancellor of the Exchequer, Philip Hammond, has formally announced the formation of R5-SHCH Connect, a partnership between R5, the London FinTech leading the digital transformation of Emerging Markets Foreign Exchange trading, and the Shanghai Clearing House, the financial market infrastructure, established to clear and settle China’s financial products.

During last week’s UK-China Economic and Financial Dialogue, Chinese Vice-Premier Ma Kai met with the Chancellor in Beijing. At the conclusion of the meeting, a series of financial trade agreements were announced, including R5-SHCH Connect, a financial market infrastructure that connects banks in China directly with the London FX market. R5-SHCH Connect demonstrates the close cooperation that exists between the UK and China under the framework of the Belt and Road initiative, and is a direct result of the deepening economic ties between the two countries.

Mr Hammond commented, “As the Renminbi becomes increasingly international, and as China continues to drive forward hugely transformative initiatives, such as the Belt and Road project, I believe that Britain can be China’s natural partner in the West for delivering these ambitious projects.”

Jon Vollemaere, CEO of R5 commented, “R5-SHCH Connect is an infrastructure that enables banks in China to trade FX in London, the largest and most liquid FX market. It is a key component of RMB Internationalisation, and will cement London’s position as the leading global financial centre. This is a great example of the UK and China working in collaboration, with R5 and the Shanghai Clearing House providing complimentary services, and recognising the importance of a strong partnership, to deliver new and innovative services.”

R5-SHCH Connect is an electronic marketplace, which enables banks located in China to trade offshore RMB and other currencies in the London FX market. It acts as a high-speed link between China and London, which provides Chinese banks with increased access to FX trading, enhances liquidity in major currencies and advances the Internationalisation of the RMB.

R5-SHCH Connect reinforces London’s leading position in global FX, in RMB trading, and in FinTech. It reflects the rise of the RMB as a global currency, and demonstrates the next stage of China’s International financial reform, by introducing new financial innovation as part of the Belt and Road initiative.

To date, banks based in China have not been able to trade the offshore RMB easily, but R5-SHCH Connect allows them to access this market for the first time. Institutions already trading in the London market will benefit from additional counterparties and deeper liquidity, provided by new Chinese entrants.

R5-SHCH Connect will launch with 8 Chinese banks connecting to the London FX market, with further onshore Chinese banks being added in early 2018.

The UK government has published Policy Outcomes of the 9th UK-China Economic and Financial Dialogue, which makes further reference to R5-SHCH Connect and to the internationalisation of the RMB, as follows:

“Both sides welcome the agreement reached between Shanghai Clearing House and R5, the London based Capital Market Fintech, to create a Cross Border FX Clearing Solution.”

“Both sides welcome the internationalization of the RMB and recognize London’s vital role in supporting global use of the RMB and facilitating international access to China’s domestic capital market.”

“Both sides agree to continue to promote the China-UK cross-border RMB business and support the use of RMB as the settlement currency in bilateral trade and investment. Both sides support the UK RMB clearing banks to fulfil their role to promote the development of the off-shore RMB market in London.”

LeapRate

 

UK Chancellor announces R5-SHCH Connect, partnership between London R5 and Shanghai Clearing House

DECEMBER 18, 2017 —BY VALENTINA KIRILOVA

The UK Chancellor of the Exchequer, Philip Hammond, has formally announced the formation of R5-SHCH Connect, a partnership between R5, the London FinTech leading the digital transformation of Emerging Markets Foreign Exchange trading, and the Shanghai Clearing House, the financial market infrastructure, established to clear and settle China’s financial products.

During last week’s UK-China Economic and Financial Dialogue, Chinese Vice-Premier Ma Kai met with the Chancellor in Beijing. At the conclusion of the meeting, a series of financial trade agreements were announced, including R5-SHCH Connect, a financial market infrastructure that connects banks in China directly with the London FX market. R5-SHCH Connect demonstrates the close cooperation that exists between the UK and China under the framework of the Belt and Road initiative, and is a direct result of the deepening economic ties between the two countries.

Mr Hammond commented:

As the Renminbi becomes increasingly international, and as China continues to drive forward hugely transformative initiatives, such as the Belt and Road project, I believe that Britain can be China’s natural partner in the West for delivering these ambitious projects.

Jon Vollemaere, CEO of R5 added:

R5-SHCH Connect is an infrastructure that enables banks in China to trade FX in London, the largest and most liquid FX market. It is a key component of RMB Internationalisation, and will cement London’s position as the leading global financial centre. This is a great example of the UK and China working in collaboration, with R5 and the Shanghai Clearing House providing complimentary services, and recognising the importance of a strong partnership, to deliver new and innovative services.

R5-SHCH Connect is an electronic marketplace, which enables banks located in China to trade offshore RMB and other currencies in the London FX market. It acts as a high-speed link between China and London, which provides Chinese banks with increased access to FX trading, enhances liquidity in major currencies and advances the Internationalisation of the RMB.

R5-SHCH Connect reinforces London’s leading position in global FX, in RMB trading, and in FinTech. It reflects the rise of the RMB as a global currency, and demonstrates the next stage of China’s International financial reform, by introducing new financial innovation as part of the Belt and Road initiative.

To date, banks based in China have not been able to trade the offshore RMB easily, but R5-SHCH Connect allows them to access this market for the first time.

Institutions already trading in the London market will benefit from additional counterparties and deeper liquidity, provided by new Chinese entrants.

R5-SHCH Connect will launch with 8 Chinese banks connecting to the London FX market, with further onshore Chinese banks being added in early 2018.

The UK government has published Policy Outcomes of the 9th UK-China Economic and Financial Dialogue, which makes further reference to R5-SHCH Connect and to the internationalisation of the RMB, as follows:

Both sides welcome the agreement reached between Shanghai Clearing House and R5, the London based Capital Market Fintech, to create a Cross Border FX Clearing Solution.

Both sides welcome the internationalization of the RMB and recognize London’s vital role in supporting global use of the RMB and facilitating international access to China’s domestic capital market.

Both sides agree to continue to promote the China-UK cross-border RMB business and support the use of RMB as the settlement currency in bilateral trade and investment. Both sides support the UK RMB clearing banks to fulfil their role to promote the development of the off-shore RMB market in London.

FinTech Insider

https://fintechinsidernews.com/posts/3JbxqFqd2Nbi5R3C4/uk-chancellor-announces-formation-of-r5-shch-connect-between

UK Chancellor announces formation of R5-SHCH Connect between Shanghai and London

Same as Finextra

Military Technologies

http://www.military-technologies.net/2017/12/18/hong-kong-london-financial-services-forum-2017-with-photos/

Participants from London noted the UK was now responsible for 36 per cent of RMB foreign exchange payments conducted outside of China, and that 50 per cent of UK-based financial institutions were using the RMB to exchange payments with Mainland China and Hong Kong. Average daily RMB trading volumes stood at £50 billion by the end of June, and the UK welcomed the announcement this month of a connect partnership between R5FX and Shanghai Clearing House, committing both sides to launch an electronic spot trading platform in the near future. Both sides also welcomed the acceleration of preparations for the London-Shanghai Stock Connect, confirmation that it will utilise a depository receipt structure to facilitate two-way trading, launch of a feasibility study and working group regarding creation of a UK-China Bond Connect, and announcement of a feasibility study into the mutual recognition of funds between the UK and China.

Automated Trader

http://www.automatedtrader.net/news/at/158525/uk-chancellor-announces-r5_shch-connect-between-shanghai-and–london

UK Chancellor announces R5-SHCH Connect between Shanghai and London

First Published 18th December 2017

New service will connect banks in China with London’s FX market

The UK Chancellor of the Exchequer, Philip Hammond, has formally announced the formation of R5-SHCH Connect, a partnership between R5, the London FinTech leading the digital transformation of Emerging Markets Foreign Exchange trading, and the Shanghai Clearing House, the financial market infrastructure, established to clear and settle China’s financial products.

At the conclusion of last week’s UK-China Economic and Financial Dialogue a series of financial trade agreements were announced, including R5-SHCH Connect, a financial market infrastructure that connects banks in China directly with the London FX market.

Mr Hammond commented, “As the Renminbi becomes increasingly international, and as China continues to drive forward hugely transformative initiatives, such as the Belt and Road project, I believe that Britain can be China’s natural partner in the West for delivering these ambitious projects.”

R5-SHCH Connect will launch with 8 Chinese banks connecting to the London FX market, with further onshore Chinese banks being added in early 2018.

Further information – Policy Outcomes of the 9th UK-China Economic and Financial Dialogue

GlobalRMB

London-Shanghai FX link to bolster CNH liquidity

Offshore renminbi liquidity could get a shot in the arm as Shanghai Clearing House (SHCH) joins hands with R5, a London-based FX platform, to create a link between the FX markets in the UK and China. The move is also set to widen Chinese banks’ access to global currencies.

Reuters (Chinese)

https://cn.reuters.com/article/shanghai-clearing-r5fx-crossborder-fx-bu-idCNKBS1EC0TR

Also covered in Finet.HK – links to Finextra


Blog post on XRP CHAT

UK Chancellor Of The Exchequer Philip Hammond Announces R5-SHCH Connect – New Service Will Connect Banks In China With London’s FX Market

http://m.mondovisione.com/media-and-resources/news/uk-chancellor-of-the-exchequer-philip-hammond-announces-r5-shch-connect-new-se/