On the 13th, it was learned from the People's Bank of China that in order to further promote the coordinated development of the financial derivatives markets in mainland China and Hong Kong, the arrangement of the "Swap Connect" mechanism will be further optimized, and multiple measures will be launched in enriching product types and improving supporting functions. "Swap Connect" is the abbreviation for the interconnection and cooperation of interest rate swap markets between mainland China and Hong Kong. It was officially launched on May 15, 2023, and can provide convenient and efficient risk management tools for domestic and foreign investors to carry out RMB asset allocation. On the basis of fully summarizing the operational experience of the "Swap Connect" and carefully listening to the opinions and suggestions of domestic and foreign investors, the People's Bank of China, the Hong Kong Securities and Futures Commission, and the Hong Kong Monetary Authority have recently supported the further optimization of the "Swap Connect" mechanism arrangement and will launch various measures. In terms of enriching product types, "Swap Connect" will launch interest rate swap contracts with international currency market settlement days as payment cycles, aligning with mainstream international trading varieties, and meeting the diversified risk management needs of domestic and foreign investors. At the same time, "Swap Connect" continues to improve its supporting functions and will launch contract compression services and historical interest bearing contracts with supporting facilities, facilitating participation in institutional management of contract business scale, reducing capital occupation, and activating market transactions. In addition, the reporter learned that the National Interbank Funding Center, Interbank Market Clearing House Co., Ltd., and Hong Kong Off exchange Settlement Co., Ltd. will also simultaneously launch other system optimizations and preferential measures to reduce the participation costs of domestic and foreign investors. According to data from the People's Bank of China, as of the end of April 2024, more than 3600 RMB interest rate swap transactions have been completed between 20 domestic quoting firms and 58 foreign investors, with a total nominal principal of approximately RMB 1.77 trillion. The People's Bank of China stated that in the next step, regulatory authorities in mainland China and Hong Kong will guide financial market infrastructure institutions in the two regions to continue to steadily and orderly promote cooperation in the "Swap Connect" business, continuously improve various mechanism arrangements, help steadily expand China's financial market opening up to the outside world, and firmly enhance Hong Kong's position as an international financial center. (Lai Xin She)