Swap Connect Plans to Include Standard Interest Rate Swaps and Standard Bond Forwards, Targeting 2028 Launch
nashnova research
China's foreign-exchange trading centre, Shanghai Clearing House and Hong Kong's OTC Clear are working to bring standardised interest-rate swaps and bond forwards into Swap Connect by 2028 — upgrading offshore hedging tools from bilateral quoting to anonymous central auction.
What is being added to Swap Connect?
Two new products: standardised interest-rate swaps (benchmarked to interbank NCD issuance rates) and standardised bond forwards (linked to liquid bonds issued by China Development Bank and Agricultural Development Bank of China).
Both use anonymous central auction matching, unlike the current model where counterparty identity is known before trading.
This means → offshore firms no longer need to sign bilateral credit-risk agreements with each counterparty — the access barrier drops sharply.
What is wrong with the current setup?
Today's Swap Connect supports only traditional OTC interest-rate swaps. Counterparties are identifiable pre-trade, and a bilateral credit-risk management agreement must be signed in advance.
In plain terms = the current model works like "one-on-one price negotiation" — every trade requires knowing who's on the other side and having paperwork in place first.
Standardised products shift to central counterparty clearing, moving credit risk from "do you trust the other firm" to "do you trust the clearing house" — in theory drawing more liquidity participants.
What do the numbers say — how fast are standardised products growing?
Shanghai Clearing House data: in 2025, traditional OTC IRS clearing volume rose 36% year-on-year to RMB 44 trillion.
Over the same period, standardised IRS clearing volume grew 2.3× to RMB 13.8 trillion — far outpacing the traditional segment.
This reflects a domestic market already voting with its feet — the liquidity advantage of standardised products is materialising fast.
Where does Swap Connect's overall volume stand?
Swap Connect launched in 2023. In Q2 this year, clearing volume hit RMB 1.7 trillion, up nearly 48% year-on-year.
This means → offshore demand to hedge renminbi fixed-income exposure is still accelerating, giving the expansion a real-world foundation.
Can this actually land — who decides?
HKEX, parent of Swap Connect's Hong Kong clearing arm, said in a written response it is "committed to working closely with regulators and market infrastructure partners to continuously enhance Swap Connect" — but confirmed no specific products or timeline.
The People's Bank of China and CFETS did not respond to Bloomberg's inquiry. Shanghai Clearing House declined to comment.
In plain terms = none of the three parties has formally confirmed the plan. The 2028 target remains a plan, not a commitment, and hinges on how regulatory approvals proceed.
市场有风险，内容仅供研究参考，不构成投资建议。