KUALA LUMPUR (Aug 20): HSBC has been mandated as the sole offshore Chinese renminbi (RMB) concentration bank for LME Clear, the clearing house for the London Metal Exchange (LME) market.

In a statement today, the banking group said it has also been appointed as one of LME Clear's RMB settlement banks.

It added this will facilitate LME Clear to accept RMB as eligible cash collateral from its members for margin cover purposes.

LME Clear had recently announced it now accepts RMB as eligible cash collateral, following regulatory approval from the Bank of England.

Previously, LME Clear only accepted US Dollar (USD), Euro, pound sterling (GBP) and Japanese Yen (JPY) as cash collateral.

“This is a landmark deal which further showcases the extent to which RMB is becoming a truly global currency," said HSBC head of payments and cash management in Asia Pacific, Kee Joo Wong.
 
He said this deal evidences HSBC’s strong understanding of RMB and the clearing processes in Hong Kong, and the central counterparty (CCP) industry.

He said this also is an evidence of HSBC's long term relationship with the Hong Kong Exchanges and Clearing Ltd, and the value that the group can add to LME and its customers.

“Partnering with LME Clear in this concentration and settlement process is a natural development of our international RMB capabilities and cements our position as the leading international bank for RMB,” Kee said.

HSBC is an associated broker clearing member of LME, whereby the Bank is entitled to issue LME contracts, and can trade on LME’s electronic platform, LMEselect, as well as the telephone market.

Meanwhile, LME Clear's chief executive officer Trevor Spanner said, "LME Clear is delighted to have HSBC on board, as we respond to growing demand from members for renminbi-related services."

HSBC has been a champion of RMB internationalisation, since the beginning of its historic process and has established RMB trade capabilities in over 50 markets globally.

It was also the first international bank to settle RMB trade in six continents, and has been at the forefront of the regulatory developments within and beyond China, the statement further read.