Shanghai Clearing House

Shanghai Clearing House (SHCH), formally known as the Inter-bank Market Clearing House Co., Ltd., is a Chinese financial-market infrastructure institution headquartered in Shanghai. It was established on 28 November 2009 and operates as a central counterparty and central securities depository for parts of China's interbank financial markets. The institution was created with approval from, and recognition by, the People's Bank of China, reflecting the country's effort to strengthen centralized clearing, settlement, and risk management in the interbank market. SHCH's core role is to stand between counterparties in eligible transactions, helping reduce bilateral counterparty exposure and standardize the post-trade process. Its activities include central counterparty clearing, registration and custody, risk management, valuation, statistical information services, and financial knowledge dissemination. Its scope has included bond-market instruments and interest-rate derivatives, alongside other products and transactions handled through China's interbank market infrastructure. These services place SHCH alongside other specialized Chinese market institutions, including the China Foreign Exchange Trade System, China Central Depository & Clearing, and China Securities Depository and Clearing Corporation, although each organization has a distinct market mandate. The clearing house was founded with four institutional shareholders. China Foreign Exchange Trade System held 46.7 percent, China Central Depository & Clearing held 33.3 percent, China Banknote Printing and Minting Corporation held 10 percent, and China Gold Coin Inc. held 10 percent. This ownership structure links SHCH to important components of China's financial, monetary, and securities infrastructure rather than to a conventional commercial-financial-services group. SHCH has expanded its relevance beyond domestic operations through regulatory recognition and cross-border market access. In the European Union, the European Securities and Markets Authority recognized it as a third-country central counterparty on 3 October 2022. In the United States, it received an exemption from the Commodity Futures Trading Commission allowing it to clear swaps for the proprietary accounts of clearing members that are U.S. persons or affiliates of U.S. persons. The U.S. arrangement does not make SHCH a registered derivatives clearing organization. These developments indicate an effort to support international participation while operating within the regulatory frameworks of major financial jurisdictions. The institution is also a member of CCP Global, the international association of central counterparties and clearing houses. CCP Global was registered in Shanghai in 2015 and opened an office there in 2017, providing an additional connection between SHCH and the global clearing community. Available public figures illustrate the scale of its activity. In 2018, SHCH reported total clearing volume of approximately 4.6 million transactions, an increase of 31 percent from the previous year, with a total value of RMB 349.5 trillion, up 32 percent year on year. These figures describe clearing activity rather than commercial revenue. SHCH's positioning is therefore institutional and infrastructural: it is a market utility whose importance derives from settlement reliability, counterparty-risk reduction, data and valuation capabilities, and integration with domestic and international financial-market rules.

Shanghai Clearing House was established in Shanghai on 28 November 2009 as the Inter-bank Market Clearing House Co., Ltd. Its formation was part of the development of China's modern financial-market infrastructure and the expansion of centralized post-trade services in the interbank market. The People's Bank of China recognized the institution as a qualified central counterparty, giving it a formal role in managing clearing and counterparty risk for eligible transactions. The institution's founding shareholders were drawn from major Chinese financial and monetary-market organizations. China Foreign Exchange Trade System held 46.7 percent, China Central Depository & Clearing held 33.3 percent, China Banknote Printing and Minting Corporation held 10 percent, and China Gold Coin Inc. held 10 percent. This composition positioned SHCH as a public-infrastructure-oriented market institution rather than a conventional privately controlled financial company. Its operating responsibilities developed across several related areas. SHCH provides central counterparty clearing, registration and custody, risk management and valuation, statistical information, and financial knowledge dissemination. Its market coverage includes bond-related activity and interest-rate derivatives in China's interbank financial system. By centralizing these functions, the institution helps standardize transaction processing and reduce the risks associated with bilateral settlement between market participants. Publicly reported activity shows that SHCH became a high-volume market utility. In 2018, it handled about 4.6 million clearing transactions with an aggregate reported value of RMB 349.5 trillion. The transaction count rose 31 percent from the preceding year and the reported value rose 32 percent. These numbers represent clearing activity and are not equivalent to revenue or profit. SHCH has also developed an international regulatory presence. The European Securities and Markets Authority recognized it as a third-country central counterparty on 3 October 2022. In the United States, the Commodity Futures Trading Commission granted an exemption allowing SHCH to clear swaps for the proprietary accounts of clearing members that are U.S. persons or affiliates of U.S. persons. The exemption does not mean that SHCH is registered in the United States as a derivatives clearing organization. The clearing house is a member of CCP Global, an international association of clearing houses and central counterparties. The association was registered in Shanghai in 2015 and opened an office there in 2017. Through this relationship and its regulatory recognition in overseas jurisdictions, SHCH participates in the broader international network of post-trade and clearing institutions. Its continuing role is primarily infrastructural: supporting the functioning, risk control, custody, and settlement of China's interbank financial markets.

• 2022

  Recognized by ESMA as a third-country central counterparty

  [1]Shanghai Clearing House - Wikipediaen.wikipedia.org

  The European Securities and Markets Authority recognized SHCH as a third-country central counterparty on 3 October 2022.

• 2018

  Clearing activity reaches reported RMB 349.5 trillion

  [1]Shanghai Clearing House - Wikipediaen.wikipedia.org

  SHCH reported approximately 4.6 million clearing transactions valued at RMB 349.5 trillion, with year-on-year growth in both transaction count and value.

• 2017

  CCP Global opens Shanghai office

  [1]Shanghai Clearing House - Wikipediaen.wikipedia.org

  CCP Global opened an office in Shanghai, reinforcing the city's role in international clearing-industry cooperation.

• 2015

  CCP Global registered in Shanghai

  [1]Shanghai Clearing House - Wikipediaen.wikipedia.org

  CCP Global, an association of clearing houses and central counterparties of which SHCH is a member, was registered in Shanghai.

• 2009

  Shanghai Clearing House established

  [1]Shanghai Clearing House - Wikipediaen.wikipedia.org

  The Inter-bank Market Clearing House Co., Ltd. was established in Shanghai on 28 November 2009.

• 2009

  Recognized as a qualified central counterparty

  [1]Shanghai Clearing House - Wikipediaen.wikipedia.org

  The People's Bank of China recognized SHCH as a qualified central counterparty for eligible financial-market clearing activities.

A core component of China's interbank financial-market infrastructure, focused on centralized clearing, settlement, custody, and counterparty-risk management.

• Financial-market infrastructure · 2009

  Central counterparty clearing

  SHCH interposes itself between eligible counterparties during the clearing process, helping manage counterparty exposure and standardize obligations. This function is central to its role in China's interbank financial markets and supports more systematic risk controls than purely bilateral settlement arrangements.

• Fixed income

  Bond clearing and settlement

  The clearing house provides post-trade services for bond-market activity, including clearing-related processing, registration, and custody functions. These services support the operation of the Chinese interbank bond market and connect transaction processing with settlement and asset-record infrastructure.

• Derivatives

  Interest-rate derivatives clearing

  SHCH clears eligible interest-rate derivatives and related transactions, applying centralized risk-management and valuation processes. Its international regulatory permissions also include a U.S. exemption for specified swaps-clearing activity involving proprietary accounts of qualifying clearing members.

• Securities services

  Registration and custody

  Registration and custody services support the maintenance of records relating to eligible financial instruments and the safekeeping or administrative handling of securities within the relevant market infrastructure. These functions complement SHCH's clearing and settlement activities.

• Risk and data services

  Risk management and valuation

  SHCH provides risk-management and valuation capabilities associated with centrally cleared markets. These activities help determine obligations, monitor exposure, and support the orderly processing of transactions through the clearing house.

• 2021

  Two Shanghai Clearing House chairmen fall: Xu Zhen sentenced to 11 years, Xie Zhong removed

  Xu Zhen, first chairman of Shanghai Clearing House, was in 2021 expelled from the Communist Party and public office for embezzlement and bribery; the notice said the amount of public funds embezzled was huge, and he was later sentenced to 11 years at first instance. In January 2023, chairman Xie Zhong was removed from office and lost contact; media said he might be involved in the case of former PBOC Deputy Governor Fan Yifei. Xu Zhen was sentenced; Xie Zhong was removed and investigated.

  Source

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• 2022

  Pursued recognition in the European Union as a third-country central counterpartyStrategy

  Background

  Cross-border financial-market participation requires clearing institutions to obtain recognition or authorization under the regulatory systems of overseas jurisdictions.

  Action taken

  The European Securities and Markets Authority recognized Shanghai Clearing House as a third-country central counterparty on 3 October 2022.

  Aftermath

  The recognition strengthened SHCH's formal regulatory standing for relevant activities involving the European Union, although the available reference material does not specify the resulting transaction volumes or commercial impact.

  Source

• Obtained a U.S. swaps-clearing exemptionStrategy

  Background

  The U.S. Commodity Futures Trading Commission regulates derivatives clearing organizations and may provide exemptions for foreign clearing institutions under specified conditions.

  Action taken

  The CFTC granted SHCH an exemption to clear swaps for the proprietary accounts of clearing members that are U.S. persons or affiliates of U.S. persons.

  Aftermath

  SHCH gained a defined route to conduct the specified U.S.-related swaps-clearing activity without being registered as a derivatives clearing organization. The reference material does not provide the exemption date or subsequent volume data.

  Source

1. 1Shanghai Clearing House - Wikipediaen.wikipedia.org
2. 2上海清算所shclearing.com.cn
3. 3产品与业务shclearing.com.cn
4. 4official_website_pageshclearing.com.cn
5. 5official_website_pageshclearing.com.cn
6. 6Two Shanghai Clearing House chairmen fall: Xu Zhen sentenced to 11 years, Xie Zhong removednews.stcn.com
7. 7Two Shanghai Clearing House chairmen fall: Xu Zhen sentenced to 11 years, Xie Zhong removedwenews.caixin.com