OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX) that provides clearing and settlement services for over-the-counter (OTC) derivative transactions, has launched a client clearing service following approval by the Securities and Futures Commission (SFC). Client clearing has been rolled out ahead of the effective date of the first phase of mandatory clearing in Hong Kong on 1 July 20171. The new service provides OTC derivative market participants that may prefer not to become Clearing Members of OTC Clear with the means to fulfil their mandated regulatory obligations along with the credit and capital efficiency benefits of central clearing through the establishment of a "client clearing" relationship with an existing Clearing Member of OTC Clear that will act as an intermediary, or "broker".