Core Insights - The Hong Kong Stock Exchange's OTC Clearing Company, in collaboration with the China Foreign Exchange Trade System and the Shanghai Clearing House, has launched interest rate swap contracts referencing the one-year Loan Prime Rate (LPR1Y) under the Northbound Swap Connect [1][2] - On the launch day, 31 domestic and foreign institutions participated, executing 53 trades with a nominal principal amount of 6.46 billion RMB, indicating strong market interest and operational efficiency [1] - The introduction of LPR interest rate swaps enhances the risk management tools available to foreign investors, supporting the internationalization of the RMB [1] Group 1 - The Northbound Swap Connect provides a convenient, efficient, and secure channel for domestic and foreign investors to participate in the financial derivatives market while maintaining regulatory and market structure integrity [2] - Since its launch on May 15, 2023, the Northbound Swap Connect has seen increasing trading activity, with 82 foreign financial institutions from 15 countries and regions executing over 15,000 RMB interest rate swap transactions totaling approximately 8.15 trillion RMB by the end of August 2025 [2] - The Hong Kong OTC Clearing Company has extended the maximum term of the existing CNY NDIRS contracts from 5.5 years to 11 years to better assist foreign investors in managing interest rate risks [2] Group 2 - The three-party infrastructure will continue to collaborate closely with market participants under the guidance of regulatory authorities to enrich the product offerings of the Northbound Swap Connect and enhance the risk management framework [2] - The initiative aims to promote the joint development of the financial markets in mainland China and Hong Kong, contributing to a high-standard opening of China's financial market [2]

Core Viewpoint - The article discusses the launch of interest rate swap contracts linked to the one-year Loan Prime Rate (LPR1Y) under the "Northbound Swap Connect," aimed at meeting the diverse risk management needs of overseas institutions [2][3]. Group 1: Introduction of LPR1Y Interest Rate Swaps - The People's Bank of China has approved the trading and centralized clearing of interest rate swap contracts linked to LPR1Y, effective immediately [2]. - Bloomberg has initiated support for the first day of trading for these LPR1Y-linked swap contracts [2]. Group 2: Bloomberg's Role and Enhancements - Bloomberg's IRS trading portal now supports various financial instruments in the onshore derivatives market, including the newly added LPR1Y interest rate swaps [2]. - Bloomberg has previously upgraded its "Swap Connect" solution to support IRS contracts with settlement dates aligned with the International Monetary Market (IMM) and to allow early exit from contracts through compression services [3]. - The integration of LPR1Y interest rate swaps into Bloomberg's existing "Swap Connect" solution provides investors with precise long-term investment matching tools without altering current workflows [3]. Group 3: RFQ Workflow - Authorized Bloomberg terminal users can initiate requests for quotes (RFQ) from a list of approved onshore dealers by the People's Bank of China, allowing them to receive pricing and necessary transaction execution information [6].